The Music of Stillness

"Where are the songs of spring? Ay, Where are they? / Think not of them, thou hast thy music too." Keats' celebration of autumn's quiet richness came to mind when I returned from August vacation.

Well, initially I had thought of a Goethe poem that captures similar tranquility in German, but poetry loses its power crossing languages. AI suggested Keats. He embraces seasonal change with acceptance rather than alarm - perhaps too peacefully for our current market situation, where record-breaking calm should make us more watchful, not less.

The numbers confirm this unusual stillness. The MOVE Index - our seismograph for expected bond yield fluctuations - sits at three-year lows. Stock volatility has hit its lowest level since January. Even the VIX fear gauge signals investors expect continued tranquility.

I hope you enjoyed an active summer. The weekly Gutmann Perspective resumes actively too - hard to believe I've written over 220 newsletters since June 2020.

When it gets too quiet

I'm wired differently than many investors: the calmer markets become, the more nervous I grow. Nobody knows the future, and performance disclaimers warn us for good reason: past performance is not a reliable indicator of future developments.

This is precisely when we must ask critical questions. What exactly do I own? Have concentration risks built unnoticed? What happens if world-changing AI doesn't deliver profitable business models as quickly as hoped?

We’ve researched thoroughly and found convincing answers for our positioning. Japanese equities performed particularly well in our portfolio during August - though upward volatility never bothers anyone. Thematically diversified with solid business models, we view the future optimistically.