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Daniel Zurbrügg
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Daniel Zurbrügg is the Managing Partner of Swiss Infinity Global Investmetns GmbH(, a Swiss based independent asset management firm. The firm provides clients with independent investment research, asset management and asset protection services. With a global network... More
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Swiss Infinity Global Investments GmbH
  • ECHO FROM THE ALPS - Alpine Atlantic's Investment update.


    We are happy to provide you with our July 2009 update, “Echo from the Alps”. "Echo from the Alps” is a reference to the place we live and work: Switzerland. Our country is home to the Alps, one of the biggest mountain formations in the world. “Echo from the Alps”, because we understand ourselves as top-down “global macro” style investment managers, looking at economic developments from the top. Our focus is on structural changes in the global economy and the value drivers created thereof. Despite the currently difficult economic environment, we believe there are always good investment opportunities. Locating these opportunities today, however, requires a truly global view.  
    This “half-time” report comes at an ideal time. After seeing a relatively strong recovery from the March lows, market sentiment has lost a bit of momentum recently as the outlook for the global economy seems more uncertain than ever. However, the recovery of global markets has helped us to deliver a year-to-date performance of +12.14% (in USD) for our main strategy, the Alpine Atlantic Global Offshore Portfolio.
     Some people see the current environment as a huge long-term buying opportunity while others think this is just a “dead cat bounce” and things will only get worse from here. The market has not even made up its mind as to whether deflation or inflation will be the real danger in the next 12-18 months. I think the market often has a one dimensional view on things and the question ofwhether we should be worried about deflation or inflation can only be answered by having a two dimensional view. People who are following our newsletters know that we tend to be more worried about inflation longer-term and actually think we could see some very strong inflationary pressure developing in the next two years. In the short-term,  I think it is unlikely that we will see inflation and actually think that the current process of deleveraging and restructuring will have a deflationary impact. Yes, there was an enormous amount of liquidity pumped into the global financial system, but unless we see some increasing lending activity, we don’t think that inflation will be a concern near-term. However, the move from the currently mildly deflationary situation to the point where we are starting to see some serious inflationary pressures could be a relatively short one. We currently anticipate inflation to reemerge within the next 12-18 months. Our forecast has recently moved more to the back end of this estimate, but we think inflation will come and in a big way.
    Now that most financial institutions have restructured their balance sheets and reduced their leverage, their willingness to lend will increase soon. This seems especially likely when one considers the fact that many of the big banks are considered “too big to fail” and therefore do have access to easy capital if needed. Also, due to the fact that many banks can refinance themselves at very low rates, their interest rate margins have risen strongly. However, once the velocity factor of the money flow starts to increase and the economy is showing further signs of recovery, then I think we will see a huge spike in yields, especially at the longer-end of the curve. Text book economics tell us that in an environment of slow economic growth and very low capacity utilization it is almost impossible for inflation to emerge. However, in today’s world, global factors play a crucial role. We feel global economic growth will reemerge, lead by Asia, but that the recovery in the U.S. will be much slower than elsewhere. We expect commodity and energy prices to rise sharply over the next 12-18 months and therefore to add external inflation pressure on the U.S. at a time that could not be worse. Corporate earnings will be very weak for the time being, although we might see some positive surprises as well. The uncertainty and volatility that remains in the remains in the markets will nevertheless make it almost impossible for P/E valuations to expand further in coming months. So, if the multiples are not rising and corporate earnings remain weak, it is unlikely that most major equity markets will recover much further short-term. In our May newsletter we projected global equity markets to recover by 10%-20% until the end of the year. We stick with our forecast made back in May, however, part of the projected price increases have occurred already but a 10% (for most major markets) to 15% performance (especially emerging markets) is still possible.
    Our forecasts are as follows:
    • Global equity markets to recover a further 5-15% until the end of the year
    • Global recovery will be lead by emerging market countries
    • Further, possibly significant devaluation of the U.S. Dollar
    • Increasing growth signals out of Asia, eventually spreading globally
    • Positive fundamentals for “commodity backed” and “surplus” currencies
    • Yield curves to remain very low at short end, but rising at long end
    • Oil prices to move towards $100 again bythe end of the year
    • Commodity prices to rise again after temporary consolidation
    • Gold to break the $1,000 mark and movetowards $1,300 in the next 12 months
    Jul 23 3:53 AM | Link | Comment!
  • Changing Regulatory Framework


    While we are overall relatively optimistic on the recovery of global growth in the coming two years, we are more worried about the longer-term implications of the changes going on politically and especially geopolitically. People should make governments and not the other way around, but, in times of crisis people will always look for guidance and support from leaders that’s where the game gets dangerous. The recent battle against offshore financial centers has almost become a “holy war” for many governments. They are holding the “tax oasis” (as they are called in Europe) responsible for just about anything they can think of in an attempt to shift attention away from the real problems. People only start to notice an oasis when all of the rest around it is plain desert. The recent war against tax havens is not addressing the real problems that many governments have, most of them are unable to deal with the challenges that globalization brings. Every country in the world is free to make its own policies, be it in the area of banking secrecy, tax system or other questions. Unfortunately, the witch hunt that is happening now is not fixing the real problems. Governments increasingly using and abusing their growing influence and power to undermine the privacy and self-responsible behavior of its people in an attempt to create a fair and social system for everybody. Much to our surprise, the U.S. is about to take a leading role in this development. The increased taxation of corporations and the middle class combined with a series of regulatory measures are totally against the original values and principles the U.S. was built on. Government officials have stated again and again that they have an interest in a strong currency. We simply cannot believe thatto be true. With the country carrying such a huge debt burden it would be foolish to wish for a stronger currency. This would make the real value of debt even higher. The devaluation and the stronger inflationary pressure might actually be a blessing for the U.S. because it allows for an orderly reduction of its debt. No one in government can say that officially, however, as it would drive even more investors away and/or increase the required rate of return.
    It is obvious that the current developments will only result in an even faster shift of economic power towards Asia, which is going to become the world’s main economic hub in the next two decades, resulting in a truly multi-polar world.
    Tags: us economics
    May 19 9:01 AM | Link | Comment!
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  • Latest Investment update "Echo from the Alps" out now...
    Dec 10, 2012
  • Expect more consolidation in stocks during next 2-3 weeks, however 2013 could see positive surprises once the global sentiment is improving
    Nov 15, 2012
  • Very interesting opportunities in Asia, Parkway just got a higher offer this morning...
    Jul 26, 2010
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