• Klaus Meitinger

Review - A lot has happened...

Rueckblick aufmacherPerfect followers.

In issue 01/18, private wealth reported on the investment idea of "search funds". In this model, outstanding university graduates try to find an established medium-sized company with a succession problem that they can buy - in order to continue running it themselves. Investors support this process, securing a stake in interesting companies if the search is successful.

The only reason this brilliant idea hasn't really taken off so far is because there's been a lack of graduates with guts. Now two searchers - Alexander Hansen and Christopher King - are giving it a go. "To be entrepreneurial.To be able to do what we are convinced of without rigid structures and to take responsibility for it - that's how we imagine the future." SMEs are therefore something of a natural target, he says: "The long-term orientation, the special bond with the employees, the deep roots in the community - all that has always excited us."

There are more than enough potential target companies in Germany. According to a study by KfW, 62 percent of owners in the SME sector are older than 50. "We offer everyone who doesn't have children of their own a second-best option for passing on their business because we take a similar approach to a successor within the family. We want to continue the life's work for the long term and according to the founder's principles. We offer a fair price. And we are very flexible. The entrepreneur can leave.Or work with us even longer. We would actually be very happy about that," Hansen and King list the advantages of their model.

The conditions for them to succeed with it are good. The two have digital know-how. They have complementary skills - Hansen brings expertise in finance and accounting, King has gained operational experience in an international corporate environment. And they have been able to attract the "who's who" of the European search funds scene as investors and advisory board members. Now all that is missing is the right company.

Big comeback.

Since 2010, private wealth has been watching Harpreet Singh, founder of the biotech company Immatics, pursue his goal of beating cancer. The method: he looks for structures on the surface of cancer cells by which the body's own immune cells recognize it, so that they can then fight it.

After a few setbacks, Singh now seems to be back on track. In the summer of 2020, the company went public via a SPAC.With more than 250 million dollars in cash, Immatics now has enough capital to push ahead with its developments.

And they look promising. In February 2021, the company published very good clinical data. It seems Singh can now more accurately distinguish tumor tissue from normal tissue. If most T cells then actually turn against tumors, that would be a breakthrough. Investors should not lose sight of the stock.

  • Klaus Meitinger

Full throttle.

Dear Readers,

Despite rising infection figures, the economic recovery in the German economy is continuing with increased momentum. The upswing scenario established since July 2020 has thus been further consolidated. This is underlined by the latest surveys of the ifo Institute on the business climate and export expectations. In March, these even rose to their highest level since January 2011!

Particularly impressive is the development in industry, whose expectations are an important indicator for the private-wealth stock market indicator. There, things are moving steeply upwards at a rapid pace. The ifo Institute reports that demand has picked up noticeably in all industrial sectors. Expectations are now as optimistic as they were last in November 2010.

That looks good. But the absolute highlight of the latest Ifo Business Climate report for us is that the Munich-based researchers have just recalibrated their economic clock. We have already presented this chart to you many times in this space. It shows at a glance which economic phase the German economy is in - recovery, boom, slowdown or crisis.

In the last few months, the message of the clock has been a little difficult to interpret. For example, the economic clock had already reached the boom sector again in September 2020, which was difficult to reconcile with the actual reports from companies at the time.

The reason can be found in the calculation method. To determine the balance of company reports on the business situation and business expectations, the percentage of negative responses is subtracted from the percentage of positive ones. If these balance out, the balance is zero. A balance of zero was therefore previously defined as the mathematical normal state of the economy and therefore corresponded to the crosshairs of the Ifo clock.

However, analyses by the Ifo Institute show that the long-term mean - i.e. the true normal state of the economy - was always reached in the past at balances well above zero. In order to be able to depict the true situation of the economy on the business cycle clock, the crosshairs had to be adjusted to the actual normal state and shifted accordingly. This is exactly what the ifo Institute has now done. You can see the difference in the figures below - on the left you see the "old" business cycle clock from February, on the right the "new" one from March. In fact, the crosshairs of the new business cycle indicator have been shifted upwards to the right by the respective mean values.

210330 pw online NadR Volle Pulle

We think the new form of presentation - the basic data have not changed - shows better where the economy is. According to it, Germany has just left the crisis quadrant and is now in the recovery phase. It also makes it easier to understand the idea of the private-wealth stock market indicator. We want to be invested when the economy moves from the bottom left (crisis) to the recovery to the top right (boom) on the ifo clock. And we tend to want to be on the sidelines when it moves from top right (boom) through downturn to bottom left (crisis).

The current message for investors is that there is still a long way to go before the boom quadrant overheats. The economic component in the private-wealth stock market indicator, taken in isolation, could indicate a green light for equity investing for a long time to come.


As the Ifo economic indicator continues to be positive and the seismograph has also been unchanged for months, an overweighting of equities seems advisable. Currently, the "green" probability, which suggests a calm market with a positive trend, and the "yellow" probability of a turbulent market with a positive expectation roughly balance each other out. "Red" - turbulent market with negative expectation - continues to play no role. "Green" probability has actually gained share recently. This is positive and strengthens the recommendation that has been valid for a long time: clear overweighting," summarizes Oliver Schlick, who as managing director of Secaro GmbH calculates the probabilities and links them to investment recommendations.

A month ago, we pointed out that the concrete shape of the equity weighting depends on whether the narrative of an economic boom and significantly rising corporate earnings combined with persistently low interest rates remains valid.

In concrete terms, we therefore calculate two scenarios for you. In the first case, to which we ourselves currently attach greater probability, the assumption is that the "zero interest rate era" of the major central banks will continue for a long time (we assume ten years for the calculation). Nevertheless, corporate earnings are rising in line with the trend of recent years. Then the private-wealth stock market indicator would advise an equity allocation in the corridor between 90 and 120 percent of the capital earmarked for equity investments. And since the seismograph considers an overweight to be prudent, the specific equity allocation of the stock market indicator would be 110 percent.

Those who believe in the "old" world, where interest rates rise along with the economy, must be more cautious given the high valuation in the markets. In this case, an equity quota of 90 percent of the capital earmarked for equities is currently indicated.


Klaus Meitinger

Note: Despite careful selection of sources, no liability can be accepted for the accuracy of the content. The information provided in private wealth is for information purposes only and does not constitute an invitation to buy or sell securities.

  • Klaus Meitinger

On Track.

ifo Indizes Mar2021

Dear Readers,

In February, the ifo business climate made up for the dip in January. The positive development in industry, which is also decisive for the private wealth stock market indicator, was particularly impressive. The assessment of the situation there has now returned to the level of summer 2019 - so the Corona slump has been more than made up for. And business expectations are also pointing upwards again.

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  • Klaus Meitinger

Will 2021 be a top stock year?

0802 BullenDear Readers,

Over the past month, we have virtually visited a dozen annual outlooks from banks and asset managers. The bottom line is clear: this year, the augurs expect a massive economic recovery, rising inflation rates and yet continued ultra-expansionary monetary policy. What does this mean for investment strategy?

At the beginning of his 2021 Annual Outlook each year, Neuberger Berman asks the audience which asset class will perform best in the coming year. This time, the answer was clear. 74 percent - more than at any time in the past five years - chose stocks.

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  • Klaus Meitinger

Is inflation coming back?

Inflation AdobeStock 71088009 smallDear Readers,

Over the past month, we have virtually visited a dozen annual outlooks from banks and asset managers. The bottom line is clear: this year, the forecasters expect a massive economic recovery. This raises the intriguing question: Will inflation rates also rise? And will this force the central banks to step on the brakes sooner than expected?

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