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27.10.2008 Message of the Management to our Clients

Farseeing strategic approach pays off during disastrous crisis or how to face successfully the Black Swan (see below)

 

Since 1991 we have been pursuing an investment method in which a safety oriented approach as well as the quality and liquidity of the investments is our focus. In this manner we can get close to the goal formulated by trading master Kostolany, to “eat well AND to sleep well”.

We never would have thought that our conservative and security oriented approach would pay off in this radical fashion. Near meltdowns and most recently nationalizations in the banking sector, which mean a capitulation of the financial industry to the free market, as well as huge price falls have made it clear to every investor that a good risk management is required. It is just in times like this that the quality of an investment manager is shown: when he has relatively good results not just in a few sectors, but in the entire portfolio of those assets entrusted to him during difficult and stormy times. As our customer you already have mainly those things in your portfolio which everyone else is presently trying for: secure government bonds and relatively highly hedged stocks. The Sunday papers from October 26 give us a fine example of this.

Through our investment approach you can calmly watch events unfold, you retain freedom of movement in your decisions and are not in a paralyzed situation, hoping desperately for improvement. The most important part of the approach is confirmed: through the G&W approach and its disciplined execution you are in a position to stick to your long term investment goals and portfolio allocations. Strategic goals must not be sacrificed to tactical considerations which can make long term goals impossible. Every investor knows the experience of having to leave the market because he cannot take the losses any more, and then later at the wrong moment entering the market as it is running again. Our system increases “by itself” e.g. the stock positions without emotion and in a series of steps when the trend is pointing upwards. Since stocks are without doubt important and irreplaceable portfolio building blocks for the long term, a risk-reducing approach must be given a high priority for times of crisis.

At this time we would like to thank you for your trust over the years. This is a harvest time for you. Together with you we are pleased over the long term success.