Time, Carved Into Form

The way we measure, symbolize and imagine time has long fascinated artist Arnold Reinthaler. Visiting his studio as part of the "Grätzl Art Open" in the Nibelungen quarter of Vienna's 15th district prompted me to reflect. After all, for us investors, time is an important element when it comes to investing our money. 

In his works, the artist visualizes everyday actions, including through the ritualized extraction out of specific cubes from a pre-milled panel of white marble. 

Rituals of value development

At Gutmann Portfolio Management, we are no strangers to rituals. Every day, we automatically capture the performance of all portfolios and a binary code records it in the digital world. Over time, this results in a time series of value development. 

What concerns me most is the absolute performance over a multi-year period. What happens day to day and week to week is almost meaningless, simply noise without signal. Only across the span of years does a meaningful pattern emerge. However, that’s not to say one shouldn’t regularly review one’s portfolio! 

This brings us to the second most important factor: the perception of risk. It depends heavily on how often the investor stops to gauge performance. The investor who measures daily will perceive the risk as higher than someone who only examines the change in value every few months. 

Together through the dark valley

I vividly recall the 2008/2009 financial crisis when a client confided in me that she compiled a report every day and was already dreading having to suffer another decline in her asset performance. “Suffering” was the apt word, as she was visibly distressed. I audaciously forbade her to produce daily reports and advised her to take breaks exceeding a month.

Together, we persevered through this difficult time. Her portfolio made it through the dark valley, and subsequently, she experienced new highs in her wealth, which she and her husband had worked hard to build up. 

At Gutmann Portfolio Management, we produce a report every three months. I consider this is a sensible frequency to stay sufficiently “on top of things”. You can find the report for the 1st quarter of 2024 here.