Don't do anything! A good rule to use on the Exchange

Wednesday 12 August 2015

Old brokers on the exchange, have always known it: "following markets up and down, empties your wallet".

However, the broker on the stock exchange participates in many transactions.

Knowledgeable investors, however, are characterized by their prudent and calm manner. Following advice they rarely get to hear from bankers: don't do anything!

Warren Buffett (85 years) once said in Omaha: "There are times in the stock market, where the brilliant investor stands out by doing nothing".

And his partner Charlie Munger (91 years) from California said: "A really good share is one where you can sit on it for many years." This has nothing to do with a plea for laziness.

However, it is usually recognized that a fortune is not created overnight. It needs to grow. No coincidence that the magazine the “Economics Weekly” dubbed our long-term value fund - with the title "An English Park instead cut flowers" "ME Fund Special Values". And instead of nervously studying daily comments on the stock market, the prudent investor can do better things with his time: reading, listening to music or doing something for his health.

Building a fortune has nothing to do with activism. It requires a long-term strategy. It boils down to a simple formula: build resources which is not that hard, but quite boring. And there are still stocks which offer this long-term potential. Just check out the Fielmann AG shares. Over the past 11 years, their value has more than quintupled!

A childhood friend of my grandmother, Walter Beiler, in the economic miracle years was a well-known independent broker based on the stock exchanges in Frankfurt and Dusseldorf. He was described in the press as “A boar in a forest is like Walter Beiler operating in the market”

As a young man, I visited him in 1973 in his exchange office in the gallery of the Düsseldorf stock exchange hall. Slowly and quietly he pointed me to a colleague in the next office down the corridor, and said to me: "Look, that's a really big trader in shares. Very often he does not do anything at all",   At that time I wondered about this statement. Today, some 40 years later, I know and appreciate his advice.