EUCOM Economic Analysis - Part I

[Firn]

This thread has certainly gone quiet without the imput of other guys. Maybe most are just too tired about the economic mess in which large parts of Europe are still in.

The swiss Masseneinwanderungsinitiative has caused quite some reactions within and across Europe. It was very close indeed, caught many big players in the industry and politics by surprise and will cause the Switzerland very considerable issues. The EU and neighbours are certainly not amused and even if the will of 50,x of the voters will get respected it will have consequences.

The relative liberal and economy-focused NZZ has analyzed the voting patterns, the reaction and the possible consequences. Needless to say that there are quite a few paradoxes:

Die Skepsis der Bevlkerung gegenber der Zuwanderung ist nicht dort am grssten, wo sie am strksten sprbar ist. Kantone mit einem Auslnderanteil, der unter dem nationalen Schnitt liegt, haben nmlich der Masseneinwanderungsinitiative der SVP zugestimmt. Aus diesem Muster fallen nur die Kantone Tessin und Schaffhausen, die trotz berdurchschnittlicher Auslnderquote im Ja-Lager sind. Vor allem im Tessin ist der durch die Grenzgnger aus Italien ausgelste Druck gross. Der Ausreisser auf der anderen Seite ist der Kanton Jura, der die Initiative bei vergleichsweise wenigen Auslndern ablehnt.

Eine hnlich paradoxe Situation zeigt sich beim vieldiskutierten Dichtestress. Dieser msste in grossen Stdten und in Regionen mit hohen Wachstumsraten (Bevlkerung, Bruttoinlandprodukt) am strksten wahrnehmbar sein. Doch eine von der Firma Microgis aufbereitete Grafik zeigt eindrcklich, wie vorab in der Deutschschweiz die Ablehnung der Initiative mit dem Grad der Urbanisierung steigt. Je mehr Menschen auf engem Raum leben, desto geringer fiel also die Zustimmung aus. Ausnahmen bilden auch hier die Kantone Tessin und Schaffhausen. Erstaunlich auch, dass die Diskussionen in der Westschweiz und vor allem im Arc lmanique ber knappen Wohnraum und hohe Immobilienpreise nicht in eine hhere Zustimmung zur Initiative mndeten.

So in general the Kantone with a higher share share of EU-citiziens, higher density and higher economic growth have say 'No' to the initiative.


P.S: It is always interesting to quickly check what you have written some months ago. In terms of stocks every single one that I bought and mentioned here in the last year has considerably outperformed the market. ENEL and Telecom Italia were simply so cheap compared to the value that sooner or later they had to rise, roughly 40% and 50% compared to the roughly 15% of the Eurostoxx 50. Apple and VW gained roughly 30% compared to the E50's ~15% in their timeframe. The last two actually lost a considerable amount in the last month. In Apples case I bought new stock at around 510$ because the fundamentals are still good enough IMHO and the financial guys did the right thing and bought back stock big time. See my orginal reasoning a year ago.

I hoped before the shareholder meeting that Apple would drastically increase their buybacks for those very reasons and they did announce pretty much that. Doing it with bonds, the capital of others, with such a low yield for such long periods is brilliant from the two angles called equity and taxes. Sadly the stock price went up so quickly, now those buy backs will cost more. At 400 $ the EPS would have went up over 30% for the shareholder even if the earnings had stayed (inflation-adjusted) flat...

P.P.S: I now went back further and it is good to see that in the the short term I was completely wrong about the two big Telecom companies of Germany and France. Orange looked much more attractive but gained only a bit over 10% (the dividend yield was of course a lot higher then the E50 average) while Deutsche did almost make 50%. I did sell a third of my Orange stock at ~25% months ago to lower the overall ratio of shares. I actually threw out the little DT I had over a year ago, and personally I would even more eagerly sell it now. While overall Orange earned for me a bit more then the E50, one has to consider that as a underperformer. So it is not 4/4 but for 4/5 which outperformed the Eurostoxx50 benchmark.