3/10/23 7:00 AM - Lesezeit

Identify investment opportunities

Robert Karas

Chief Investment Officer, Partner

The Last Drink. The End of An Idea.

Spring is just coming and I have already destroyed a beloved idea, namely, that alcohol is a positive part of our culture and even supports health when consumed moderately. A glass of wine or beer a day is good for the heart, for the circulatory system and helps against depression. That is what we learned in Austria.  Unfortunately, current studies speak against this (see links at the end of the newsletter.*).

"Any year that you don't destroy one of your best-loved ideas is probably a wasted year," says Charlie Munger (born 1924), longtime business partner of Warren Buffett and Vice Chairman of the successful U.S. company Berkshire Hathaway. Why? Because those who cling to convictions for too long close their minds to new insights. Nothing is more dangerous for investors as this statement. 

The thought of Charlie Munger is extremely powerful. Although the quote has been with me for a long time, I have only recently realized the power behind it. Hooray, my year 2023 is saved because I have changed my perspective.

Critical distance to our own theses

A thesis is not carved in stone. Rather, it must repeatedly be measured against  reality. Those who invest are subject to cognitive biases. The field of behavioral finance theory is concerned with this phenomenon. It is now scientifically proven that we are emotional beings (hear, hear!) and do not just agents of perfect rationality. Those who cannot drop formed opinions anchor them permanently (anchoring). In addition, we only select information that confirms our own expectations (confirmation bias).

Anyone who invests a lot of time and energy in analyzing securities is particularly at risk. The deep involvement with the business model sometimes reduces the critical distance and turns the analyst into a true fan. Too little do we realize that fan is short for fanatic. This is exactly the opposite attitude of the idea-destroyer. The fanatic holds on to ideas and ideologies unconditionally. These gum up his brain and are not a good way to recognize the next investment opportunity. 

So please do not scold us analysts when we change our minds. Rather, encourage us to do so more often. 

* Information on recent studies on alcohol consumption:

The Lancet
New York Times
World Health Organization


Disclaimer: This is a marketing communication. Investments in financial instruments are exposed to market risks. Past performance does not predict future returns. Forecasts are not a reliable indicator of future performance. Tax treatment depends on each client's personal circumstances and may change in the future. Bank Gutmann AG hereby explicitly points out that this document is intended solely for personal use and for information only. Publishing, copying or transfer shall not be permitted without the consent of Bank Gutmann AG. The contents of this document have not been designed to meet the specific requirements of individual investors (desired return, tax situation, risk tolerance, etc.) but are of a general nature and reflect the current knowledge of the persons responsible for compiling the materials at the copy deadline. This document does not constitute an offer to buy or sell or a solicitation of an offer to buy or sell securities. 
The required data for disclosure in accordance with Section 25 Media Act is available on the following website: https://www.gutmann.at/en/imprint

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