No-Brainers

Davos-Klosters, Switzerland – A complete rearrangement of the world is the official motto of the 2,500 guests currently visiting the World Economic Forum (WEF) in Davos. The list of attendees is impressive. Billionaires, heads of state, politicians and Hollywood stars can presently be found in the Graubünden canton. The entire area in a 35 km radius has been cordoned off for their safety. In 43 years the WEF has become the major gathering of the world’s high society.

Golden Egg
A luxury taxi ride from Zürich to Davos-Klosters will cost CHF 2,500 nowadays. By helicopter, the journey will cost CHF 9,000. The gathering is in the brand-new $ 170 million Intercontinental in Davos, which recently opened. Already the management is under pressure, as I noticed when I visited the Nuts & Co in the Intercontinental.

Peaceful Iran
The forum is all about the panels, discussions and speed dates. Perhaps the informal atmosphere will get Iran and Israel round the table. It’s a start. Where diplomats have failed for decades, the Zürich air-traffic controllers succeeded in a heartbeat. The Iranian and Israeli airplanes are standing cheek by jowl. Iranian President Mr Hassan Rouhani is trying to tell the world Iran is a peaceful nation. Finding new investors is his mission.

Inefficiency
Over the last few days I have regularly been asked what is the 2014 financial sector no-brainer. For me, the no-brainer of 2013 was to buy Apple at around $400. On June 25, we bought the share and then on December 30 we sold for profit with good reason. Currently, many investors are trading in a risk-averse manner. My estimate is that this behaviour by the general public will begin to change completely between mid-2015 and 2016. Of course, I am taking these factors into account. It is clear there are inefficiencies in the markets and we are very fond of them.

Breaking Deflation
On Wednesday, the President of Japan, Shinzo Abe, spoke in Davos. Abe’s only goal is to break the hold of deflation in his country. As you may know, deflation plagued Japan for many decades and Abe has had enough. Furthermore, Abe is trying to develop fiscal policies that make it more attractive for foreign parties to invest in Japan. For a variety of specific reasons, we do not invest directly in Japan. However, Japan might actually be the no-brainer of 2014. Long the Nikkei and short the Yen is the simple recipe. Abe will shortly be printing more Yen, causing a flight to Japanese equities.

Today I will be visiting Davos-Klosters. If this yields any interesting information from an investment perspective, I will report them to you.

It remains for me to wish you a good weekend.


Jan Dwarshuis is a senior asset manager at Thirteen Asset Management AG, where he is responsible for the Thirteen Diversified Fund. Dwarshuis writes his columns in a personal capacity and is not paid for them. Nor is he paying for his columns to be placed. Professionally, he holds positions in major European, American and Russian stock funds. The information in his columns is not intended as professional investment advice or a recommendation to make certain investments. At the time of writing, he has no position in the above shares and has no intention of doing so in the next 72 hours.