Input 19.03.2017

Good afternoon

http://us-presidents.insidegov.com/compare/13-134/Ronald-Reagan-vs-Donald-Trump gives an interesting overview – and «food for thoughts». Trumponomics could result into to a positive delevopment of US growth. Tax cuts will be supportive to earnings, key is though, that the price for USD remains close to current levels versus global currencies.

Next focus in Europe after the dutch election, is on centrist candidate Emmanuel Macron, who has taken the lead for the first time in polling before the French presidential election, beating the far right’s Marine Le Pen in the initial round. As Prime Minister he would defend France’s middle classes and claims both the outgoing Socialist government under President Francois Hollande – in which he served – and their right- wing opponents had let down the middle classes, assailed by job cuts and an increasing tax burden. Italy just introduced a flat tax for wealthy foreigners in a bid to compete with similar incentives offered in Britain and Spain, which have successfully attracted a slew of rich footballers and entertainers.

Last week I did have the chance to attend the Geneva Car Show. Global car sales are hitting new records, and the trend continues towards fuel efficiency. VOLVO plans to roll out its first self-driving car in just four years. In other words, the company’s first self-driving car won’t require a human to supervise it at all while the car is in control. The driver will be able to do another activity while the car does all the driving: http:// www.volvocars.com/intl/about/our-innovation-brands/intellisafe/autonomous-driving/drive-me Influence of «industry 4.0» and the impact of companies as GOOGLE and INTEL is an inevitable fact. DAIMLER – social contrasts became visible, not only as illustrated on my favourite page http://www.gapminder.org/tools/#_ locale_id=en;&chart-type=bubbles. Take a look at https://www.mercedes-benz.com/de/mercedes-benz/ fahrzeuge/personenwagen/g-klasse/der-neue-mercedes-maybach-g-650-landaulet/ – a special Maybach edition, at a price tag of CHF 815’000, was sold out after 2 days at the fair.

Money supply M2 measures the total amount of money in circulation in a country or group of countries in a monetary union. It is scary to monitor the development of how the European Central Bank did expand the amount of EUR lately:

Taking a closer look at interest rate since 2008 – EUR LIBOR Months did cost 5% p.a. at the time, we find ourselves today with negative interest rates of -0,35% p.a Nevertheless we are facing an ongoing inflati- on. It’s a question of time until interest rates will start to increase again. Consequently risk reward ratios on fixed income investments are not attractive.

The European Central Bank, which has left rates unchanged, confirmed that its quantitative easing (QE) program will continue at a rate 60 billion from April to December, but the policy may change if the scenario worsens. It said QE will, no matter what, proceed until inflation starts getting close to a 2% target.

According to Mr Draghi, President of ECB:

  • Eurozone growth risks are oriented downwards because of global factors.
  • the conditions of loans for households and businesses continue to benefit from ECB measures.
  • inflation had risen recently due to energy prices and it is expected to rise again in the short term but underlying inflation pressures remain «modest» and a «convincing upwards trend» is not expected.
  • as the recovery consolidates, rates too will rise, we have to be patient.

As asset manager we continue to promote single stock oriented longterm investing, with focus on dividend yields and solid balance sheets. https://www.dai.de/en/what-we-offer/studies-and-statistics/return-tri- angles.html explains and illustrats clearly that longterm investing does pay out, despite all historical volatility on financial markets.

Hopefully there will be a chance to reflect and exchange your view on markets and global politics very soon personally.

Best wishes Bjoern

Input 15.01.2017

Good afteroon

Hopefully you did have a healthy start into 2017.

During the first days of the fresh year we took the opportunity to collect various personal impresssions and economic inputs.

Risks we filter for the coming months are themes such as:

The outgoing president, François Hollande, has decided not to run for re-election. Had he ran, he would have been the only potential candidate predicted to lose if he were to face the far right’s Marine Le Pen in the second round of the election. To the surprise of many, François Fillon has won a landslide victory to become the right-wing candidate for France’s 2017 presidential election. The polls failed to see Fillon coming and it is at least conceivable that Le Pen will do much better in the election than they predict.

We’ve seen that the rules of the game can change. Recent events in Britain and the US are proof that it is perfectly possible.

Angela Merkel could continue as Chancellor, but her power will be diminished. Her standing is odd. In regular times, she’d be seen as a fairly dull centre-right politician. But the leftwing achievements of the SPD, her coalition partner from 2005 to 2009 and again from 2013, mean that she is seen as cuddlier than she is, while her decision to allow a million refugees into Germany has made her a hate figure on the uglier parts of the right.

Thereas May will set out a 12-point plan for Brexit as she vows that the UK will not have «partial» membership of the EU «that leaves us half-in, half-out».March 31, 2017 is the deadline set for invoking Article 50 by notifying the European Council of Britain’s intention to leave the EU. In May 2019 Britain formally would exit the EU, following ratification of Brexit by all other member states

President-elect Donald Trump wants to lower taxes for corporations, from 35 percent to 15 percent. When companies pay lower taxes, the thinking goes, they have more money to spend on research and development, hiring, and producing things — all of which can lead to growth and supportive to corporate earnings. The question though is, if the US can keep up with their strong currency.

Forecast: GDP growth 2016 in % Yo Y

Forecast: GDP growth 2017 in % Yo Y

We fully share the expectation, that the big picture on global organic growth, vide CS graph above, remains sustainable also for 2017. Based on the present low interest rate environement and the risk for bond prices to collapse with upcoming rate increases our prefered asset class is focussed on dividend yielding equity for the time being. We implement through our single stock selection based approach.

On the currencies remain constructive for EUR, cautious on USD and negative for CHF.

We are interested to learning your view on 2017 – please share it with us! I do also look forward to meet with you personally very soon.

Best wishes Bjoern

Input 15.12.2016

Good morning

Our present key reflections for 2017+ are themes such as global organic growth expectations, upcoming inflation and increasing cybercrime as new threat.

Following Opecs production cut this week a surging oil price and the commitment from prospective US Treasury secretary Steven Mnuchin to boost economic growth intensified the flight from sovereign bonds. Investors grew increasingly anxious that president-elect Donald Trumps ambition to return the US economy to growth of 3-4 per cent would mark the end of declining interest rates.

U.S. home prices have climbed back above the record reached more than a decade ago, bringing to a close the worst period for the housing market since the Great Depression and stoking optimism for a more sustainable expansion. http://us.spindices.com/indices/real-estate/sp-corelogic-case-shiller-us-national- home-price-nsa-index does illustrate this very well.

We have your private data. Send us $300 or well destroy all of it. Thats not a message you ever want to receive. In the past few years, hundreds and thousands of users have fallen victim to anonymous cyber- ransom attacks that have resulted in millions of stolen dollars.

In late 2013, a Trojan known as CryptoLocker C also known as the nastiest malware ever C began to spread across Windows computers. Once infected, the victims private files would be encrypted and locked with a key only known to the attackers…

According to research from the security firm CHECK POINT SOFTWARE malicious software, has seized control of more than one million GOOGLE accounts since August 2016 to take control of devices and install other apps and ad-spewing software without permission. Some of the unauthorized apps also used the victims user name and password to post fake reviews.

http://www.hackmageddon.com/category/security/cyber-attacks-statistics/ is giving a broad overview on motiviations of these devastating attacks; the scary part is that they are more prevalent and more effective now than ever before.

Victims are offered to decrypt the files in exchange for payment made in https://en.wikipedia.org/wiki/Bit- coin, a new cryptic currency system founded in 2008. Latest public case occured to a bank in Liechtenstein http://www.theregister.co.uk/2016/11/29/liechtenstein_bank_breaches/

Please be aware that BITCOINS are though not a criminal currency, and there are predictions that an electronic currency such as Bitcoin will replace paper cash within a decade. Digital currency will have an influence on the fiat currency, systems of the world, which are established as money by government regulation or law. The way anonymous Bitcoins travel across international borders is a challenge for money laundering, causing new legal decisions and regulations.

Member of the Almira Group

Global Outlook for Gross Domestic Growth rates, 2016-2026

Note: Projections are based on trend growth estimates, which – for the period 2017-2021 – are adjusted for outpast gaps. Color ramp is based on GDP growth rates in 2017. Source: The Conference Board Global Economic Outlook 2017.

We remain positive for global GDP growth, areas according to the chart above. Businesses have to prepare for more disruptions from geopolitical tensions, policy uncertainty, financial market volatility, and rapid changes in technology, but they also need to stay focused on leveraging the qualitative sources of growth with investment in technology and business productivity. As investment strategy 2017+ we therefore suggest to focus ongoingly on a dividend yielding Single Stock Selection oriented strategies and to avoid fixed income, where possible.

For the upcoming holidays we wish you a peaceful time together with your family and friends, followed by a healty start into a prosperous and lucky 2017.

Best wishes Bjoern

Input 29.09.2016

«Intelligence is the ability to adapt to change». Stephen Hawking

Good morning.

A good way to illustrate changes within the industry is the following graph:

«Industry 4.0, is the fourth industrial revolution, [1] is the current trend of automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the Internet of things and cloud computing. [2][3][4] Industry 4.0 creates what has been called a «smart factory». Within the modular structured smart factories, cyber-physical systems monitor physical processes, create a virtual copy of the physical world

and make decentralized decisions. Over the Internet of Things, cyber-physical systems communicate and cooperate with each other and with humans in real time, and via the Internet of Services, both internal and cross-organizational services are offered and used by participants of the value chain.[2]» Source https://en.wikipedia.org/wiki/Industry_4.0

Present development of internet and all underlying services does support an easier access on many aspects. In our input 30.05.2016, vide download on www.jacotinvestmentmanagement.ch/en/news/, we did refer to «GAFA».

Better logistics make a better world. Consequently all participants within our ecosystem must satisfy basic needs of humans before the perceive themselves. We will experience smart and greener solutions through innovation. Applicating algorithms within various sectors will be key. Interesting is, how most of us connected through a broad variety of Apps, on our APPLE IPhones and iPads, and Androids.

ALIBABA GROUP, the world’s largest crossborder e-commerce company by gross merchandise volume (GMV), has its roots in China but its aspirations are global. Alibaba makes it easier for companies in the U.S. and elsewhere to leverage technology to sell to China’s rising middle class, which is already the size of the U.S. population and is expected to double in seven years.

This week I was attending http://www.iaa.de/en/ and learned through various company and booth visits, at companies. https://en.wikipedia.org/wiki/Telematics will help us to optimize movements and processes. New connected services will provide optimization of fuel consumption, GPS tracking, driving behaviour, maintenance management, traffic information, etc. The European Commission has passed a law that requires Tire Pressure Monitoring Systems on all new models as of 2012 and on all new cars as of 2014 – as is already the case in the US. These systems will make their data available to other vehicle systems –

the braking system, for example. CONTINENTAL did develop a leading system to cover this law.

An MIT spinout is preparing to commercialize a novel rechargable lithium metal battery that offers double the energy capacity of the lithium ion batteries that power many of today’s consumer electronics. My concern though is access to rare earth metals. Honda started looking to reduce the use of heavy rare earth metals 10 years ago, but a spike in prices around 2011 prompted the tie-up with Daido, the company said. This technology will lower costs and reduce our exposure to price fluctuations. The redesigned motor still uses the light rare earth element neodymium, which is found in North America and Australia, as well as China. Honda is aiming for new-energy vehicles, including gasoline-electric hybrids, plug-in hybrids,

battery-electric and fuel cell vehicles to account for two thirds of its line-up by 2030, from around 5 percent now.

Despite upcoming US elections, http://elections.huffingtonpost.com/pollster/2016-general-electi-

on-trump-vs-clinton, and ongoing politicial unrest around the globe, but market environment remains with negative interest rates in Europe, versus average Dividend Yields larger than 3% we suggest to hold on to a liquid & equity oriented investment strategy. Single Stock Selection is our choice.

Fixed Income risk-reward ratios are not attractive and we question, why investors are prepared to lend money at such low rates to governements and corporations. As seen this week, German airline DEUTSCHE LUFTHANSA pulled a €500 million ($562 million) debt sale in an unusual move that signals limits to the European Central Bank asset buying program that has turbocharged Europe’s bond market. The retreat is the first major misstep for a European blue chip company raising debt since the ECB announced in March that it would buy corporate bonds. That buying has helped push down yields across Europe, allowing companies to raise funds at ultralow rates and unleashing a flurry of debt issuance.

Saudi Arabia has ended its flirtation with free oil markets. It took the kingdom’s new oil minister, Khalid Al-Falih, just six months to blink, ending the country’s two-year policy of pump-at-will. The decision at

this week’s meeting of the Organization of Petroleum Exporting Countries in Algiers to cut production was necessitated by Saudi Arabia’s tattered finances. The kingdom has the highest budget deficit among the world’s 20 biggest economies, may delay its first international bond issue and now faces fresh legal uncertainty after the U.S. Congress voted Wednesday to allow Americans to sue the country for its involvement in 9/11. Oil prices will most probably recover and we sense that it a question of time until global interest start to increasing again.

As always I am glad receive your feedback and learn about your personal view. Hopefully we will be able to catch up soon!

Best wishes Bjoern

Input 16. 08. 2016

Hopefully you did spend a good summer as well!?

We took the chance for selective family travelling and did meet with many inspiring personalities, plus that I could collect various subjective impressions on consumer behaviour in the US and in Germany and Sweden.

As the Olympic games in Rio approach their halfway point, it seems inevitable that America will finish with the most gold medals – again. It has only been beaten once in the past 20 years, when the Chinese triumphed in Beijing. Thanks to swimmer Michael Phelps and gymnast Simone Biles, Team USA was five golds ahead of its nearest rivals after day six. China has been less dominant in the swimming and diving, and has fewer medals than it did at the same point in 2012. Russia has done roughly as well as it did in 2012, but will suffer in the track-and- field events, because most of its athletes have been barred for doping. Australia and Japan have improved greatly, while the French and South Africans have struggled in the pool. And spare a thought for the North Koreans, who have yet to win a gold: their underperforming weightlifters can expect a frosty reception at home. Who will win medals in global economy?

My personal impressions in the US were very positive, eventhough the increasing social gap is visible. Mrs Clinton would definitely be the better choice to succeed President Obama in the White House after November 8th. http://elections.huffingtonpost.com/pollster/2016-general-election-trump-vs-clinton does indicate the present combination of polls – how precise the ever may we did experience in the UK in mid-June…

Brexit may be delayed. Weaker demand, slower growth, faster inflation – that’s the U.K. economy that the Bank of England sees in its crystal ball after the nation voted for Brexit. Now the first hard numbers are on the way.The U.K. could remain in the EU until the end of 2019, about a year longer than predicted, The Sunday Times, http://www.thetimes.co.uk/article/brexit-will-be-delayed-until-end-of-2019-6kxb7sgrr- reported, citing unidentified ministers. New departments set up to handle the transition won’t be ready to act should PM Theresa May invoke Article 50 in January, and the situation is «chaotic.»

The latest Deutsche Bundesbank report mentioned «The German economy should continue to growin» the third quarter in line with the robust underlying cyclical upthrust. The mood in German industry has improved distinctly. Notwithstanding the intense public discussion about the economic implications of the UK’s announced departure from the EU, German firms have so far only slightly moderated their positive expectations. This supports the assessment that the economic consequences of the Brexit vote for Germany are likely to be very limited in scope, at least in the short term. German firms’ positive expectations regarding foreign sales suggest that exports, too, will grow solidly in the third quarter. Overall, production by industrial firms should once again make a stronger contribution to aggregate growth in the third quarter. Given that capacity utilisation is already above its average level, this should also mean more investment in machinery and equipment. Construction investment should also provide a greater impetus in the third quarter after the effects of the weather- related second- quarter rebound in building activity have petered out. In addition, private consumption should once more be a significant driver of domestic economic growth after faltering in the first quarter. Both employees’ income prospects and the labourmarket situation remain favourable, and the preceding rise in crude oil prices has reversed.

http://www.economist.com/news/europe/21701803-russian-aggression-pushing-finland-and-sweden-towards-nato-just-visiting – this article does reflect parts of our concerns on latest developments in Russia. Mr Ivanov’s firing marks a major shake-up within the Kremlin, and comes at a sensitive time. Parliamentary elections loom in mid-September, at a time when the economy is under strain. And tension with Ukraine is escalating over Russian claims that Ukraine attempted to stage a terrorist attack in Crimea; Russia deployed powerful S-400 air defence systems to Crimea, while Dmitry Medvedev, the prime minister, warned that diplomatic relations with Ukraine could be severed.

Euro-area equities, «trapped» in a long-term bearish trend, are testing levels that they have struggled to hold for nearly a year, but did luckily erase losses spurred by the U.K.’s decision to leave the European Union. Our single stock selection strategies , are outperforming global indices and I am fully convinced, that value can be added through a consistent approach. We remain constructive for global equity markets and prefer strategic cash to bonds.

http://en.wikipedia.org/wiki/Financial_technology services which I did experience this summer were Swish, http://www.apple.com/apple-pay, and http://en.wikipedia.org/wiki/PayPal, whereas I noticed, that payment services trough ordinary orders or netbanking are a pattern of the past. As much as many Americans started to use those technologies the tiping policy, up to 25%, in cash does create the impression of «second currency» which can be deposited on accounts in Delaware http://www.finews.com/news/ english-news/24039-us-barack-obama-jack-lew-taxevasion-offshore-cdd-final-rule-ubs-panama-papers.

Should you wish to read our previous comments, you will find them downloaded on http://jacotinvestment- management.ch/en/news/

I do look forward to reflect views at any times, but am especially looking forward to seeing you personally very soon again.

Best regards Bjoern

Input 13. 07. 2016

Good morning

An interesting article on was published in New York Times by Paul Krugman «cheap money talks». http://www.nytimes.com/2016/07/11/opinion/cheap-money-talks.html?_r=0

Despite the Brexit shock and rumours & speculations around the italian banking system markets did start to recover, and so does the GBP gradually, based on the news, that Mrs Theresa May is taking over as first female PM in 26 years.

German companies continue to deliver solid returns and based on our factfinding with managements and local economits and investment professiionals the outlook is positive.

In Japan PM Abe did introduce another stimulus program with the promise support the local economy. NINTENDO seems to be back versus SONY. To me it’s a classical example of how a stockprice is being boos- ted on projected earnings, in this case related to the popularity of https://en.wikipedia.org/wiki/Pokémon_Go ; the value surged by USD 7 billions on this news. With our investment into YUKI JAPAN REBOUNDING GROWTH FUND we feel most confident.

The upcoming US election’s outcome is difficult to tell. Nevertheless we see good corporate results, and record low jobless rates could result into further positive development of constructive consumer behaviour. Healthcare and technology stocks are offering attractive valuations.

A high demand of SUV’s in China did give car sales a lift, http://www.bloomberg.com/news/articles/ 2016-07-08/china-auto-sales-grow-at-faster-pace-on-suv-electric-car-demand

This fact does reflect to us, that middle class of a 1.4 biilion population is on the move. Organic growth for goods & services will remain superior in comparison to Western economies. This pattern does also apply for smaller economies as Vietnam, where we expect a strong potential and rising stock prices.

We continue to question why investors in the present environement should lend money to governements at rates of close & below zero percent, especially if at present there are good alternatives with dividend generating equity. The sustainable value principles of Benjamin Graham, https://en.wikipedia.org/wiki/ The_Intelligent_Investor, are key for our investment strategy and therefore we stay focussed on our single stock selection based approach. Despite a temporary negative yield it is never wrong to integrate/hold some strategic cash though.

With respect to the currency allocation we ongoingly suggest to underweight CHF and remain in opposite positive for EUR and USD.

May we refer to our updated website www.jimag.ch, where we offer access to

  • our investments track records on our daily tradeable strategies CALANCA, CRISTALINA, VERDE SPLUGA and SAN BERNADINO
  • and soon to come the historical mailings, respectively our comments and references to developments of global markets.

Please do not hesitate to contacting us in order to share your personal view and reflections. Best summer-wishes Bjoern

Input 27. 06. 2016

Good morning

Please let me share a comment reveived today.

«The UK took its decision. The political ramifications of the referendum on the island might be entertaining to watch but they are not relevant for the markets. In fact it’s a one-off event. From a market perspective the key issue to focus on is the political cohesion of the continent. I am pretty optimistic that the impact from the UK‘s departure is manageable as the tone of the Brexit debate was so divisive and directed against the European neighbours that, in the end, even UK allies such as Sweden didn’t show much sympathy with the UK. Only the far-right parties cheered across countries but they are not pivotal. In fact, PM Cameron had been harshly criticised for the negative tone of his referendum strategy. In this context the EU summits today in Berlin and on Tuesday and Wednesday in Brussels are important.

The European heads of states are going to discuss the strategy and timeline for the final negotiations with the UK. Furthermore, they will underpin and foster the unity of the union. Most importantly, young

people in several European countries reacted as if the referendum had been a wake-up call to reflect about the achievements of the EU. If this process intensifies, the UK referendum may have some positive effects, eventually. Far-right parties will continue to fight hard and very noisy against the EU but their political weight is still moderate. Furthermore, new parties in Italy and Spain mainly focus on more socialist or regional policy elements instead of aiming for a different development path outside the Euro area or the EU. There is no UKIP in Spain, Italy or Portugal.

Spain’s election result confirms that major parties remain in the driving seat. Yes, the influence of smaller parties especially regional ones increases and new coalition governments will emerge but they don’t question the Euro or EU membership of Spain. This is really good news. Again, this was not an election about economic and political freedom but about a better social policy to manage the high unemployment rate. Due to reforms after the financial crisis economic growth re-accelerated to 3.4% in the last three quarters but the unemployment rate is still very hight at 21%. (youth unemployment at around 45%). So, Spain certainly doesn’t pose a challenge that is similar to the UK. In fact, this problem is far easier to solve and the EU is already doing that by giving the member states far more fiscal leeway.

In terms of economic data it’s important to highlight that Germany’s ifo Business Climate confirmed a stable growth momentum and a robust outlook. The UK departure may have an impact but it is not going to change the overall positive sentiment among German corporates. Today’s latest ECB lending statistics may back our view that more monetary stimulus will be needed probably by autumn. The key leading indicators for the US such as the Chicago PMI and the ISM are expected to confirm very moderate growth. This gives Janet Yellen the flexibility to postpone the next rate hike further. After the Brexit vote the timing for the next step is very unclear. It depends on the market dynamics in the coming months.»

Another interesting comment is published on http://uk.businessinsider.com/green-eu-referendum-not-le- gally-binding-brexit-2016-6, refering to the conclusion that a really crucial detail about the upcoming EU referendum has gone virtually unmentioned, and it is probably the most crucial detail: Parlament doesn‘t actually have to bring Britain out of the EU if the public votes for it. That is because the result of the June 23 referendum on Britain‘s EU membership is not legally binding. Instead, it is merely advisory, and, in theory, could be totally ignored by the UK government.

Personally I agree with the comments that markets will return back to normalization, and that last Friday’s downturn was a strong overreaction. Of course it will take time to recover from the damage occurred, but the general environement of low interest rates has not changed, and superior organic growth remains fact for economies such India or China. Dividend oriented strategies will ongoingly be adding value.

Interesting in the context of market recovery is to monitor recent the price behaviour of RECKITT BENCKISER GROUP, www.rb.com, a solid company which manufactures & distributes a wide range of products, vis a vis the example of CREDIT SUISSE; we ongoingly recommend to avoid bank shares.

We are monitoring the markets daily, prefer not to sell out, but shall also to wait before adding additional market risk.

Please do not hesitate to contacting us at any times to share your view and comments. Kind regards


Input 30.05.2016

Good morning

«The stock market is filled with individuals who know the price of everything, but the value of nothing» – Phillip Fisher

Please let me share our value adding strategies CALANCA (European DividendSelection), CRISTALINA (US Single Stock Selection), VERDE SPLUGA (Trading), which quarterly updates can be reviewed and followed via our webpage log-in http://jacotinvestmentmanagement.ch/en/track-record/Daily liquidity & trading does apply for all strategies.

We are glad to report that the strategies recovered well and arev performing ahead of the major compara- tive indices. On CALANCA and CRISTALINA we remain consitent with single stock selection, stay away from banks and prefer companies with strong emphasys on low deb, shareholder oriented distribution of free cashflow, attractive valuations and reliable management. VERDE SPLUGA is a «sporty» trading approach created on special demand of high risk oriented investors within our http://www.almira-amg.ch/index. php?page=almira-home network.

As far as I can remember personally, 2016 was the most challenging start so far. Collapse of oil & global commodity prices, plunging Chinese stockmarket, global growth concerns and «GDP guessing», negative yields on fixed income, etc caused dark clouds over the global markets through the months of January and February. One thing all can agree on about China’s economy is that the gap between official data and market perceptions is misleading.

Oil prices are back to almost USD 50/barrel, after headlines in media did predict prices below USD 20/barrel at the beginning of February – worries over record high crude stockpiles were some of the arguments. Fact is, that global demand for oil did not decrease https://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?- tid=5&pid=5&aid=2&cid=regions,&syid=2010&eyid=2014&unit=TBPD

In mid February markets managed to start their recovery where Chinese authorities rouled out a devaluta- tion of the Yuan, then Mr Draghi (President of the European Central Bank) suggested the ECB would act if market turmoil continues. We are almost back to normal, which of course implies that risks remain.

Interesting is, how many European companies are being aquired by Chinese capital – latest news is on SGL CARBON http://www.reuters.com/article/us-sgl-m-a-chemchina-idUSKCN0YI0SG

My personal biggest concern is how IS is spreading their global presence and influence http://www.econo- mist.com/news/middle-east-and-africa/21656690-islamic-state-making-itself-felt-ever-more-countries-how- much-influence, were as my optimistic attitude («glass is half-full») is based on expectations global organic growth, triggering ongoing demand for water, nutrition, housing, consumer goods, etc. http://www.gapmin- der.org, does illustrate this fact well. Furthermore GAFA (GOOGLE; APPLE, FACEBOOK; AMAZON) themes as digitalization, cybersecurity do create potential for postive considerations. https://www.fireeye.com is one of our latest investment into the CRISTALINA strategy.

Nobody (especially not the hedge fund managers.) can claim to have the crystal ball for economic and political developments, such as the outcome of Brexit, US elections as popular examples in global media.

IT might affext market short term. Fact is, that longterm oriendted investing does add sustainable value to strategies. Warren Buffet was mentioned related to this fact in http://fortune.com/2016/05/11/warren-buf- fett-hedge-fund-bet/

I do look forward to having a personal exchange of ideas & views with you during the next weeks to come – you are always warm welcomed to visit us in Zurich!

Best wishes for a relaxing weekend Bjoern

Input 18.04.2016

Good morning

«A ship in harbour is safe, but that is not what ships are built for» Wiliam G.T. Shedd

This week I have been travelling & collecting various impressions in Japan, including the wonderful cherry blossom and this night an wake up by a short earthquake in Osaka, which felt like to be on a ship in stormy waters.

Overall I am more positive towards global economic developments and consequent organic growth than ever, plus fully convinced that to remain invested in global single companies with solid balance sheets, management and owners with good attitude and shareholder oriented dividend payouts. A second conclusion is to stay away from bonds, CDS and other debt oriented vehicles.

The start of equity markets into 2016 was most volatile, but looking back, it is worth to holding on to the longterm oriented conviction of transparent long only single stock selection.

Unfortunately there is no crystal ball to read markets, nor annual %-GDP growth of an economy, which some of the hedge fund managers and «smart economist» claim to have. Same with currencies, but I expect the Swiss Franc to soften versus major global currencies. Australian Dollar, Norwegian Krona could benefit from the recovery of oil and commodity prices, USD and GBP are paying interest, so strategic cash can at least be placed with some interest rates.

China keeps to create their own patterns and M&A activity – just lately with focus on taking over SYNGENTA, SHARP and GATEGOURMET, and more to come. Here in Japan I learned that Chinese capital also buys into real estate and that tourist are supporting retail turnover.

Speed trains, as the http://english.jr-central.co.jp/shinkansen/ which was introduced in 1964 already, appear to be the global future connection between cities. Between Tokyo and Osaka there isa train every 20minutes. ALSTOM is a company covering parts of this potential demand. Public transportation is well established here, and most of the taxis are operated on liquid petroleum gas (LPG)

Monitoring the private car traffic, I noticed that the majority is driving the well known japanese brands, small fuel efficent cars as DAIHATSU and MAZDA, but also prestige oriented European brands BMW, AUDI, PORSCHE & DAIMLER BENZ. Global consumption on oil and gas will continue, and companies as STATOIL, BP, TOTAL are well positioned for this assumption.

Technology – G OOGLE A PPLE F ACEBOOK A MAZON, is being fully lived up by the Japanese consumers. Sitting in Tokyo metro wagons, hotel lobbies, walking the streets, and finally connecting myself through all the time zones with my devices, the fact is confimed; we definitely arrived in the future of global communi- cation and digitalization. Supermarkets are selling a broad selection of goods, in comparsion to Europe at reasonable prices, and basic consumption keeps going on. Global brands as NESTLE, RECKITTBENCKISER, PROCTER GAMBLE can be found in the shelves.

Restaurants are not overpriced, and I noticed that most of the restaurants showed high occupancy. By the way, my favourite «equalizer-hideway» after all delicious sushi, & tempura is STARBUCKS, which is always full of consuming clients, willing to pay a high price for a good cup of coffee.

Water – TOTO is a commom water closet, and my suscpiction is, that those are not key to water consumpti- on reduction, which must take place globally if we wish to preserve the «blue gold». Systems of GEBERIT or KURITA are key players to follow a sustainable route to reduce global water footprint.

Healthcare – shifting demographic pattern towards the silver generation is no secret, and healthy food only does not prevent all challenges of human being. Companies as SAWAl, GILEAD, and are key players for the next years to come. ADAMANT, a Zurich based fund does a great selection of generica oriented investments.

At any times I am glad to exchange and learn other opinions. Let’s meet personally very soon again! Best wishes for a relaxing weekend