Germany is out shopping!

Today I took once again a long walk on one of the shopping streets here and I must say that I was astonished by the quantity of people out shopping!

I did not manage to register specifically where people went but I did see plenty of shopping bags from Hollister, Primark, H&M, Subdued, Lindner was full, Saturn and Mediamarkt were full. Karstadt were stuffed with people.

Plenty of people were sitting on cafés drinking beer and eating. All the ice cream places were full. Generally a very good shopping day. It was bustling with so much life that I thought I was back in Gdansk in Poland again.

Is there an explanation for why? Do we need one? Only thing I can come up with is that maybe they had saved money for going on their three to four weeks of summer vacation. Were they had saved and calculated also money for food, restaurant etc. When they got back they realised that One: I got a salary while I was gone and since i did not go to restaurant, cinema, pub, drove my car or even went to the supermarket then I Two: Have extra money to now go shopping for.

I hope that my interpretation is wrong and that the general economy in Germany is so good that people simply buy more things. Still they should decrease that and try to save more in stocks! Which we saw in a previous article how little of that they had they had.

Dalal Street: Mohnish Pabrai Q2 2013

From SEC it was once again possible to take a look at what Mohnish Pabrai has been up to during the second quarter of 2013. And what could be seen was that he has made, in stocks, a very small addition to his energy company Chesapeake and a significant increase into Horseheads Corporation that are a zinc producer and zinc recycler.

German inside trading: August 2013

I´m not so happy with what I have seen in the inside trading for Deutsche Bank here in August 2013. Several people in the management or leading group have sold off stocks.

The active people have been:

Dr. Christian Klaus Ricken sold - 6,750 shares
Colin Grassie sold - 32,655 shares
Fabrizio Campelli sold - 14,757 shares
Jacques Brand sold - 29,971 shares
Werner Steinmüller sold - 70,000 shares

Total shares sold: 154,133 to a value of around 5.12 million €.

From this I assume that the Deutsche Banks stock will probably continue further down. I will continue to hold my stocks.

The good news for me is that the management/board in both Commerzbank as well as K+S have bought stocks so at least they still believe in their company.

Analysis of Investor AB

Company: Investor AB

Business: A Swedish investment company with focus on Nordic high quality company with international business. To see the entire list of companies that they are shareholders in the please check that out here. This company was started by the Wallenberg family which is a strong investment family in Sweden. They love to be in power and therefor make sure to get the A stocks in the Swedish companies since this give you much more voting power. It has existed in Sweden for a long while as a cheap way for a few people to remain in power of the companies even though financially they have a very little part of it.

Active: In the Nordic country with world expansion through their investments.

P/E: 6.1

Berkshire Hathaway: Warren Buffett Q2 2013

The activity by Warren Buffett in Berkshire Hathaway has not been that high last quarter. I guess that one reason for this was that they bought Heinz with their Brazilian buddy so they had to use all the money to bring down that big elephant.

Still they did bring in one new company:

Dish Network Corp - this company is working with satellite TV and all the available technology for providing customers with the customized TV experience either on the TV, the laptop or the tablet/iPad.

The Germans financial situation

By reading other blogs especially in other countries one gets good ideas for articles that can be written and then especially with Germany in focus. As mentioned before I like the German governmental page for statistics and now there was an excellent moment to go and visit them again actually due to two reasons. One was based on the blogger in Sweden that wrote about the financial assets for Swedish people please read the article that is in Swedish here. The second thing was that during spring / early summer there were plenty of articles talking about how the wealth in Germany was very low in comparison to many countries in the south. Here is one such article that can be read that summaries it with:

Analysis of Deutsche Beteiligungs AG (DBAG)

Company: Deutsche Beteiligungs AG

Business: A German investment company that invest in successful companies whose products and services have gained them outstanding positions in their markets. The focus is on growth-driven, profitable, internationally operating companies.

Active: Mainly active in Germany but also in other European countries. The company they invest in are however active globally. For the full list please look here.

P/E: 5.6

K+S report Q2 2013

The hated, on the stock market, company K+S came out with their report which can be found here. Hated is probably a too strong word but the market is definitely scared of then insecurity which is at least in my opinion just plain silly which is why I bought the stock.

Here are the points that the CEO found of importance:

E.On. report Q2 2013

Also E.ON SE arrived with their half year report for 2013 and it was according to the plan. The report can be found here.

The CEO mentioned some things that he found of importance and they were that:

• E.ON’s earnings performance in the first half of 2013 was as planned.
• First-half EBITDA declined by 15% year on year to €5.7 billion.
• Underlying net income by 42% to €1.9 billion.
• Although our business and regulatory environment remains difficult, we continue to expect that our full-year 2013 EBITDA will be between €9.2 and €9.8 billion and our full-year underlying net income between €2.2 and €2.6 billion.

New stock bought: K+S

Well, well, well... I did not manage to keep my fingers away from K+S when they dropped as much as they did so I bought K+S at unfortunately a higher price then what I could have gotten it for but still the price that I paid was very cheap for a good dividend paying company on DAX and I am not worried about the future. I bought 50 shares with fees for 21.26€ per share. If the stock remains lower then I will most likely try to buy more shares next month which seems to be the final investment for this year for me due to previously mentioned complications.

For the K+S analysis please take a look here and the stock will be added to my Stock Portfolio at the end of the month when I update that.

Asian Bamboo report Q2 2013

Last week Asian Bamboo came out with their half year report for 2013 and it can be found here. The market did not appreciate it much and the stock fell significantly. What is a bit sad is that this was the first quarter after they decided to implement the turnaround strategy meaning they have had less than three months to see an effect of the strategy. I doubt that the turnaround strategy will start working already the first year however one could be negative that it took them over two years to start to implement a turnaround strategy even though they saw the problem rising. Still... as a shareholder one must give them more than three months to accomplish their new targets.

Here are the points that the CEO found of importance:

Analysis of Adler Real Estate AG

Company: Adler Real Estate AG

Business: This German real estate company is focused on developing a strong and profitable real estate portfolio via acquisition and management of residential properties. They are also actively creating added value by developing existing residential properties through improvements, structural alterations and renovations, as well as developing residential construction sites and new residential properties for its own account or together with partners.

Active: Only in Germany

P/E: 75.0

This was the final real estate company for this time unless some requests turn up but I doubt it since there seem to have been a very low interest for this type of stocks. I can fully understand that especially since the P/Es are in most cases very insane. One thing that I have found very interesting is that all the real estate companies I have seen have been country based. That must be very stupid of them since usually when you have a property bubble you have that in the entire country due to interest rates, ease of credit etc. which can be completely different in another country. Just look at Europe! The real estate bubble in Spain and Ireland exploded but nothing happened in several other countries including for instance Italy. If the real estate companies would have been spread out in more countries they would have brought in protection and stability via diversification.

Analysis of Immofinanz

Company: Immofinanz

  

Business: An Austrian real estate company were the activities are concentrated on prime properties both residential as well as commercial in four core segments: retail, office, logistics and residential.

Active: In eight core countries in both Western and Eastern Europe by this they ensure a balanced risk diversification. The countries are Austria, Russia, Poland, Czech Republic, Slovakia, Hungary and Romania. They claim diversification... I claim too much focus towards East.

P/E: 32.4

Analysis of AIMCO

Company: AIMCO

Business: This American real estate company have four businesses: Property Operations, Redevelopment, Acquisitions/Dispositions and finally Retail Leasing. The biggest part is the property operations since they are the biggest landowner and operators of apartment communities in the US.

Active: Only in the US and more specifically Atlanta, Boston, Chicago, Denver, Los Angeles, Manhattan, Miami, Orange County, Philadelphia, Phoenix, San Diego, San Francisco, Seattle, Suburban New York, New Jersey and Washington DC

P/E: 51.1

Analysis of Ariston

Company: Ariston Real Estate AG (sorry their homepage is only in German)

Business: A German real estate company that are making money via four fields:
1. Income from the property management which is commercial property  2. Investment income of daughter companies, 3. Income from sale of properties and finally income from opportunistic real estate investments.

Active: Only in Germany, they have 137000 m2 on six locations in eight real estates.

P/E: 4.8

Analysis of Boston Property

Company: Boston Property

Business: This American company real estate company acquires, develops and manages its properties through full-service regional offices. Its property portfolio is comprised primarily of Class A office properties and also includes one hotel, three residential properties and four retail properties.

Active: Only in the US and more specifically in five markets: Boston, New York, Princeton, San Francisco and Washington, DC.

P/E: 55.0

Analysis of Alstria

Company: Alstria

Business: This German real estate company are focused on acquiring, owning and managing office real estate. Their portfolio contains 84 properties for commercial usage.

Active: Only in Germany

P/E: 17.9

Analysis of DIC Asset

Company: DIC Asset

Business: DIC Asset AG specialises in commercial real estate, particularly office property and are active in two segments: Commercial portfolio with contains the real estate held as inventory on a long-term basis with stable, attractive rental yields and the Co-Investments segment which involves fund investments, joint-venture investments, and interests in development projects.

Active: In Germany

P/E: 30.2

Analysis of Gagfah

Company: Gagfah

Business: The core business of this Luxembourg company is the ownership and management of a geographically diversified and well maintained residential property portfolio containing approximately 145,000 apartments.

Active: Only in Germany

P/E: 43.7

Real estate stocks bubbling?

I have in a previous article talked about the housing bubble that we currently have in especially Berlin but also to a certain extent in the rest of Germany also. For this reason I found it of interest to take a look at some of the real estate and rental companies in the German speaking part of Europe that we in Germany can easily become shareholders in.

The analysis of the companies will follow in the next couple of days but the P/E of the companies seems to be very high at a first glance. I am not surprised because I can imagine that some investors that did not want to buy real estate themselves decided to put their money into those types of companies instead. Generally not a bad idea but one always have to be careful with the P/E when it deviates too far from what is normal and that it has now. So I would even claim that the rental and real estate companies are in a bubble and the worst thing there is that for the companies it is two fold. If the real estate prices would drop by 20-30% they get pounded twice due to that they must write down the value and then investors would probably try to run away very quickly especially since the P/Es are so high as they are.

If you have any further suggestions for “immobilien” companies that I should analyse then please just let me know here.

Warren Buffett baseball metaphor

To be honest I prefer to listen to Charlie Munger in comparison to Warren Buffett. The reason being that Warren can calculate quickly and make very fast judgements on if a deal is good or not but to listen to him talk about investment I do not find interesting at all. His brain works fast, he talks fast and does not have a teachers ability to bring out his knowledge. When he writes such as the letters to the shareholders in Berkshire Hathaway then it is very different and one can learn a lot by his written words. And I must admit myself that in my scientific field I have understood a lot of things for myself and I know how to apply and use that knowledge but to even try to explain it verbally to another person would be impossible. It is just a matter of how one is wired I guess.

Commerzbank report Q2 2013

Yesterday one of mine as well as my nephews stocks (I give them shares for their birthdays) came out with their Q2 report and it can be found here. The market found it very exciting and the stock directly jumped in the morning by 9% and it finished the day with over 15% plus. There was only one thing that I found exciting in this report and that was that they actually reported the specific result for Q2 and did not hide the result by combining it directly with Q1 which they have previously used to do. So that part of the report I found great but I assume the market cares very little about such a detail.

Analysis of Agroton

Company: Agroton

Business: An agricultural Ukrainian company that is a diversified with the core business being crop production which means principally sunflower seeds and wheat, they also have the processing, storage and sale of such crops. In addition, the Group is engaged in livestock (chicken, beef, pork) and food processing (milk, cheese, bread etc.).

Active: Ukraine where they have 140000 acres of harvest area.

P/E: 1.3

Münchener Rückversicherung report Q2 2013

MüRe came out with their half year report yesterday and it was not well accepted by the market. The report can be found here on their home page. The second quarter looks bad for two reasons: The first one is because it is so much worse then Q1 in 2013 and secondly it is because it is also much worse then Q2 in 2012.

There are some things that should be not be forgotten before I go any further here and that is that 2012 was an excellent, excellent year for MüRe since they were forced to pay out very little due to catastrophes  and almost all the segments did well also Q1 in 2013 was outstanding. From my point of view the market are therefore comparing a good profit period (Q2 2013) with two outstanding ones (Q2 2012 and Q1 2013). No wonder they are upset about the outcome. I am however not very upset.