Anyone who buys their shares according to ESG criteria and believes they are investing sustainably should think through Anton Voglmaier’s understanding of sustainability. The investor warns investors of big overnight losses.
Voglmaier founded the Deutsche Fondsgesellschaft, worked as a student on the Berlin Stock Exchange and wrote a financial bestseller. In his True Value Depot, he lists sustainable stocks that have little in common with conventional sustainability favourites.
In an interview, Voglmaier explains what he believes investors interested in sustainability should pay attention to and what tips he gives them based on his stock market experience.
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FOCUS online: Mr. Voglmaier, you lead sustainable stocks in your true value depot. Nevertheless, neither electric car nor solar cell manufacturers can be found there, but rather the Swiss chocolate company Lind
Anton Voglmaier: It is too short-sighted to only look at the conventional ESG criteria. The environment, social issues and good corporate governance are important, no question. But I would put something up front: the company’s finances, profits and key figures have to be right in the long term.
There is no point in investing money in a solar system manufacturer if it goes bankrupt in the coming year?
Voglmaier: The company needs a secure long-term perspective. Only then does it improve the world.
How do investors recognize sustainable values according to your understanding?
Voglmaier: The criteria of the True Value Depot make that clear: companies must have proven their market model on the market for at least 20 years, have a market capitalization of at least one billion euros and have an equity ratio of at least 50 percent. Profitable, hardly indebted companies that are not too small can also survive crises.
In addition, the stocks should be liquid, not tight. That means you must be able to buy and sell the value at any time. For example, if the company is in the hands of just one large investor, they can’t dump stock if the metrics deteriorate.
In addition, no oil companies, no weapons manufacturers. I also don’t store any values from the communist dictatorship in China. I think politics is questionable from a human and economic point of view. That too is not sustainable.
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Let’s take a prominent example: Is someone who buys Tesla shares investing their money sustainably? Until May 2022, Tesla was considered an ESG value, and today many investors still hold the company out of sustainability conviction.
Voglmaier: Elon Musk founded Tesla in 2004. The company has only been making real money for a little over a year. Tesla might as well have gone bankrupt for a long time. It almost went bankrupt a few times. Anyone who bought Tesla shares in 2004 did not invest sustainably. He speculated. That’s fine as long as you’re doing it with money you’ve written off. But if you save for retirement, you have to invest your money securely in the long term. Tesla is not a sustainable investment for this.
Do people underestimate the risk involved in investing in trending companies? Anyone who bought Google shares 20 years ago is rich today. But anyone who has invested in other trendy Internet companies has usually lost a lot. Very few people know in advance who the winners will be. That increases your risk immensely.
Voglmaier: Tesla is currently valued higher than BMW, Daimler and VW combined. Now you can say: “Well, the future belongs to Tesla almost alone.” But if things turn out differently, the price will be corrected significantly. That’s a risk I can’t ignore just because the company meets ESG criteria.
You’re addressing crises again. Should investors always think about emergencies?
Voglmaier: I don’t believe in prophets of doom. So much nonsense is said about money. There are conspiracy theorists, anti-Semites and other weirdos who fantasize about evil dark forces. All utter nonsense.
Nevertheless, there are of course always crises on the markets, such as the financial crisis of 2007/2008 and the energy crisis now. Investors must survive these crises. That’s why the True Value Depot not only has two or three shares, but currently 29 in the depot and 25 more on the waiting list. This allows investors to spread the risk.
Incidentally, 30 values are completely sufficient for diversification. Anything more than that is useless. A lot of people don’t know that.
Wouldn’t it be safest not to invest in stocks at all?
Voglmaier: Shares are productive capital. Companies perform important social functions; they do research, pay taxes, employ people. Gold, on the other hand, is a dead value that only sits in a vault. Because of this, companies will always create more value and solid stocks will outperform other investments. They are also the best protection against inflation.
In the case of currencies, I also see the danger that the function of storing value and the function of payment will collide over the long term. If people lose confidence in their money, major currency reform could follow in a few decades. Even then, solid equity investors are better off. I therefore consider equities to be an important investment vehicle.
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Keyword return: Since October 2014, your portfolio has increased by an average of eight percent per year. It just beats the MSCI World, but the NASDAQ 100 has increased significantly more at around 15 percent annually over the same period. So do investors with real values forego returns?
Voglmaier: Those who bought technology stocks in 2014 made incredible profits. That’s correct. But he also takes a big risk because these values keep falling significantly, as you have seen recently. True values deliver rock-solid investments that give investors peace of mind. You can’t compare that to the NASDAQ, which lists technology companies. If the depot had only performed at five percent, that would have been quite good.
Investors should rather aim for a safe eight percent annual return than risk larger losses in the hope of 15 percent?
Voglmaier: Definitely. I have no objection to speculation. The stock market also lives from it, otherwise there would be no trading at all. But people should be aware of the risk when buying speculative stocks. In the tech sector, it’s common for stocks to fall 30 percent overnight. I have to ask myself: can I stand it? can i still sleep Or do I panic sell and lose?
A strategy is only worthwhile if investors stick with it over the long term.
Voglmaier: I shouldn’t underestimate psychology for that. In the true value depot, we therefore keep stocks that don’t just slide into bankruptcy. If you hold them for 20 or 30 years, you’ll still make huge profits from compound interest.
That brings us to the investment horizon: How long should investors hold shares in their portfolio?
Voglmaier: The old saying comes to mind: “Back and forth empties your pockets.” Ideally, the shares in the True Value Depot will stay there permanently. That too is sustainable. It reduces losses from fees and emotion-driven sales.
The stocks come into the portfolio through an approach you call “controlled swarm intelligence”. How does this work?
Voglmaier: Swarm intelligence means that the users suggest the values. Controlled means that I choose what goes into the depot from the suggestions according to the criteria mentioned.
I’m often impressed by the pearls that emerge: Danaher, a US conglomerate, has been in existence for over 100 years, is a top company and meets all the criteria. I didn’t know the value beforehand. Now he is in the depot. The approach has proven itself.
Why not select values yourself based on your criteria?
Voglmaier: When I worked as a student at the stock exchange, I learned a lot. Among other things, I noticed how people fell in love with their decisions. That cannot happen in the True Value Depot. I have not suggested any of these stocks. This gives me distance from throwing a value out of the portfolio where the key figures are deteriorating. Investors should consider how to create a similar detachment from their investments.
So how should investors deal with their true value depot?
Voglmaier: The depot is not investment advice. It is aimed at people who are interested in the stock market. Investors with experience should go through the values and think at one point or another: “These companies sound interesting, I’ll take a look.” I’m also happy if they send in good suggestions.
