Germany: Farewell

Neuschwanstein Castle

With my last name of Hessenthaler, many people correctly assume that my ancestral heritage ties back to Germany.  In fact, my paternal grandfather immigrated to the U.S. in the early 1900’s.  I never met my grandfather (my direct connection to Germany), I don’t speak German, I don’t have any family to speak of in Germany, I’ve only visited Germany a few times… and yet, I’m proud of my German heritage and I’m quick to claim it as another home.

My love for the U.S. runs deep, but after spending some additional time in Germany, I come away with a renewed sense of pride for my German roots.  The traits and characteristics that describe my experience with the Germans I interacted with during the trek include: smart, motivated, organized, driven, creative, and precise.  Stereotypical… I know… but stereotypes often exist for a reason, and that reason is because they’re largely true.

As I’ve travelled around the world, I’ve visited cathedrals, temples, shrines, mosques, churches, and houses of worship of all sorts.  Germany has its fair share of picturesque churches and cathedrals, but I had the opportunity to visit a “cathedral” of a different sort on the outskirts of Munich – the BMW Welt.  This impressive complex is home to BMW and includes a massive showroom, museum, factory tour, test track, and design studios.  In short, it’s pretty much the greatest place on earth for BMW lovers, and an unbelievably cool place for almost everyone else, regardless of your automobile brand preferences.

Everything about the BMW Welt is impressive.  The building itself is an architect’s playground.  Someone dreamed it up on paper and then a motivated team of engineers and builders figured out how to make it a reality.  The cars on display throughout the facility are amazing.  They have the latest and greatest models for visitors to sit in and dream about.  How anyone walks out of there without a serious case of BMW-itis is beyond me.  And if BMW isn’t your style, you can move up or down the scale within the family of brands, from Mini to Rolls Royce.

Automobiles are serious business in Germany.  The automotive industry is considered the driving force of the German economy.  Germany is the fourth-largest producer of automobiles worldwide, after Japan, the U.S., and China.  The industry employs over 750,000 people and many of the jobs are highly skilled and highly technical positions requiring advanced education and training.  Automobiles are the number one export for Germany, with three-fourths of all German-produced cars being exported.

Source: http://www.make-it-in-germany.com/en/for-qualified-professionals/working/industry-profiles/automotive-engineering

I’ve included a German automotive industry overview below for your reference.  I recognize this isn’t an investment prospectus, factsheet, or economic statistic bundle related to the investment climate in Germany… but given the important role automobiles play in the German economy, I found the information interesting just the same.

I went from dreaming about Ferraris and Lamborghinis in Italy to drooling over BMWs, Audis, and Porsches in Germany.  I keep telling myself I’m not a “car guy,” but the evidence seems to suggest otherwise.  I’m reminded of my unanticipated response when I heard some lucky souls racing Lamborghinis in Abu Dubai a few years back.  I was just giddy with excitement; like a kid in a candy store.  I like to believe I’m far too practical to actually end-up owning such a beautiful piece of engineering and art… but the more I see ‘em, the more I want ‘em.  I guess we’ll see how it plays out.  My gut tells me my practical nature will continue to win out.  Besides, Ferraris and Utah snow don’t go all that well together.  The all-wheel drive on the German offerings, however… food for thought.

In addition to the non-stop car show on the roads, it’s clear there is significant wealth and prosperity in Germany (or at least in the portions I visited).  Germany is an important player in the global economy and one that we pay close attention to.  Germany is often seen as a proxy for broader Europe.  While this may be a convenient way to get a sense of Europe, Germany has opportunities and challenges that are its own.

Our Select Country Rotation strategy is granular enough to take on specific exposures to Germany when appropriate, and just as importantly, to avoid Germany when the investment climate is less favorable.  The German in me loves the objective, rules-based approach we use to take advantage of tactical opportunities.  The investor in me loves the adaptive, risk-aware nature of the strategy.  It’s not quite as beautiful as a BMW or Audi, but the strategy is a form of beauty in its own right.

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