At Some Point Germany Has to Become an Appealing Investment

While we’ve had a quite serious correction in domestic markets, Europe has been crushed the past few months – for obvious reason. As I was looking over the charts last night, it was stunning to see a country like Germany, the fourth largest economy in the world, mangled to the tune of a 33%+ loss in under two months. No matter the outcome of this crisis (and fact the Eurozone is probably headed for recession anew), this is a very dynamic economy which has probably melded the best parts of ‘capitalism’ and ‘socialism’ (I hate the labels) to create an export machine with a high standard of living. I’d argue (frankly I don’t see any solid counter argument) that these policies have created a much better recovery for ‘Main Street’ Germany than the ‘recovery’ in the U.S. the past few years. Of course Germany is being weighed down by the anchors in the region, but ironically as the euro finally gets hit, this will actually help their exports.

The DAX has now given back 2 years of gains, and now sits at levels last seen in summer 2009. Granted it could get ‘worse’, but at some point here this country full of multinationals (the elite standard in a globalized world), has to become a very appealing long term investment.

Here is the ETF for iShares Germany (EWG) – very top heavy with those multinationals; thankfully mostly industrial rather than ‘financial’:

Top 10 Holdings

SIEMENS AG-REG 10.49%
BASF SE 8.09%
BAYER AG 6.58%
SAP AG 6.20%
DAIMLER AG-REGISTERED SHARES 6.05%
ALLIANZ SE-REG 5.78%
E.ON AG 4.87%
DEUTSCHE BANK AG-REGISTERED 4.66%
DEUTSCHE TELEKOM AG-REG 4.39%
BAYERISCHE MOTOREN WERKE AG 3.31%
Total 60.42%

No position

About Mark Hanna 543 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

Follow Mark on Twitter @fundmyfund.

Visit: Market Montage

Be the first to comment

Leave a Reply

Your email address will not be published.


*