What We Do Not Do

Gutmann does not buy thousands of stocks from the global investment universe. We deliberately do not even select more bonds. Now and then we are asked why. Talking about what we consider sensible and what we want to avoid is good, but if we are asked for concrete reasons why we do not invest in a particular security, it triggers a mental block in me, as we will never be able to discuss in depth about the things we don't do. And we don't want to spend time on it either.

It is better to talk about the 50 stocks in our Gutmann core equity strategy and the 6 themes that stand above them. This is what all of us at Gutmann - above all, of course, the equities team - have been working on intensively. The colleagues follow their business models, quarterly reports, company presentations and management decisions, curious about any new information that might reveal a facet that we have not yet considered.

It becomes problematic when topics and titles emerge from the sea of investment options and business models and move into the consciousness of the general public. One day it's a cryptocurrency, then a lithium producer and another day a certificate on electricity. It's best to take it as a good occasion to talk about sensible, long-term investing and not speculation fueled by a short-term imbalance in supply and demand. Usually, the situation clears up unexpectedly fast and prices fall as fast as they rose before.

Investing versus speculating

It is not always easy to answer the “why not” question. It comes across as friendly and innocent on the surface, but the real aspect lies deeper. This one is: “Why am I not profiting?”

And maybe: “My neighbor is getting rich!” Because often there is a person in one's own environment who brags about high profits in a marginal investment theme or a single stock. However, one rarely hears about the losses that follow shortly after. Among thousands of investment opportunities, there is always something that has soared over the last 12 months. Sometimes it's something so fringy that no one really expects to have it in their portfolio. But sometimes the issue is much broader and on everyone's mind. Just think about the electricity prices after the Russian invasion of Ukraine. “How can I profit from this?” This is a fair and permissible question. However, it quickly becomes apparent that a direct investment in the price of electricity is not easy to implement. In addition, it would not have been an investment, but a speculation, which could have led to high losses.

If we at Gutmann were constantly asked why we don't do this and that, that would be an indication. Namely, that the other person doesn't know what we do and what we stand for. I am grateful that we rarely hear this question. That said, we always focus on being clear about our values in investing. We, and especially I, as Chief Investment Officer. Now you know one of my projects for 2023.

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