Good Investing Is Watching Paint Dry

What could be more exciting than watching a football match you’ve bet money on? With sports betting, one's expertise is on the line with one’s cash. Being able to rattle off all the scores of your own team back to the 1970s must have some value after all. 

I'm dead boring in that respect. I neither follow nor bet on sports events. However, I do not judge people with a different attitude at all. Everyone may and should spend their money on whatever they want. I was fascinated by the futures markets in my 20s. During my speculative activities in stock and bond futures, my blood pressure and endogenous hormone cocktail showed a level of excitement comparable of being in a casino.

Those seeking an adrenaline rush in investing, will always find it. Not long ago, cryptocurrencies were a popular playground. In the meantime, the betting addicts have moved on. Possibly to complex financial products like 0DTE options that expire the same day. Feel what it’s like to live as an ephemeral mayfly! These options are the financial market equivalent. 

Not only the emotions of buying and selling resemble a visit to the casino - , also the distribution of profits is similar. Or rather, the losses. Because it is the lost amounts of the option players that end up as the casino’s – ooh, pardon me – the broker’s profits. It is the brokers, market makers, trading platforms and trading venues that divide up the spoils.

Solid investment, in contrast, is boring. Activities follow clear discipline, not spontaneous emotions. 

Doing nothing is not an alternative 

Little visible activity doesn't mean we’re bored at Gutmann, twiddling thumbs all day. The Chief Investment Office steers the investments with a steady hand. Always with a long-term investment horizon. Ideally, our clients also have at least 3 to 5 years in mind. 

Every Gutmann asset management mandate involves many individual investments. Our teams stay well informed about these. Each quarterly result of a company contributes to the mosaic of information. Do growth and margins meet expectations? If there are deviations from the outlined path, what are the reasons? Is the stock still attractive relative to that? The bond composition in the portfolio changes more than stocks because they mature and must be reinvested. Dividends and coupons also get reinvested. 

For a year now, Gutmann portfolio management mandates have been overweight in equities. The portfolio from back then has changed noticeably compared to today. We have not built up any additional risks, but we continue to be well positioned in terms of opportunities for our clients.