Swiss Portfolio Update

by | Jan 1, 2005 | Archives

This is a time of extreme danger.

There is a warning from our eClub advisor in Zurich below.

A message prior to 911quoted top value investment manager Jeremy Granthamwho said, “My near-term forecast is that the market will rally on an economic recovery. Anytime now, there will be a fairly decent broad pickup, led by the consumer because of the tax cuts and because of the many interest-rate cuts. I feel it probably will be a decent recovery and in this kind of knee-jerk stock market, at the first sign of a healthy economy the stock market will kick up 10% at minimum, 20% at best. (see

I feel that 911 slightly altered the dynamics and timing of this rally but that this is what we are seeing now. Swiss portfolio manager (and eClub advisor) Andy Kaegi agrees in his monthly update below as he shares a warning and gives us some value shares to consider.

I do not believe the bear market is over by any means. This rally is likely to be short lived and the war makes it even more tentative. This is the time to unload speculative shares and shift into value or more safety oriented shares, foreign shares (which have already been devalued) or foreign debt (which has been reduced as well).

Here is Andy's warning:

“Despite of the strong technical readings in the present liquidity driven market recovery we feel that markets and many individual equities are moving too high now, too far away from a fair value reflecting the current state of world economy. The upside potential in our opinion is limited and the risk/reward ratio is not in favour of buying heavily now. As long as we do not see any signs of a significant earnings recovery and with a minimal growth outlook for 2002 (in some countries even negative; i.e. acontraction) we keep our prudent stance towards equity investments. Existingholdings should be protected with trailing stop loss limits or call writestrategies; outright sales for later repurchase or the purchase of puts canbe applied alternatively.Opportunities with a fair value are around too and our enclosed list alsocontains buy possibilities.

Best regards


Until next message, good investing!