Presentation - Frouzback

[frouzback]

Hello everyone,

Having been a regular reader of this site's contributions for about 6 months, I have decided to speak out.

Thirty-something Frenchman living in the canton of Bern (in Bienne) for almost 10 years. I have a charming wife and two little girls who have only lived in Switzerland.

I particularly appreciate the contributions of Jérome and Dividinde, whether on lifestyle issues (the article "le temps") or on financial analyses. I recognize myself in many of these analyses.

My wife and I are ants who work a lot (100% both of us) and spend very little; not especially out of stinginess (we really like nice family vacations); but simply because of simple tastes. No iPhone X, we drive a Dacia (it does the job), very few restaurants (we prefer to cook for ourselves).

What I am looking for, without admitting it to anyone (hence this pseudonym – which amuses me a lot – that I created just for this site), is that these savings allow me to buy of time. Time to work less and give more space to leisure.

My wife and I started by buying a fairly standard apartment (3 bedrooms), but nice, which we paid off in full in 5 years (!!!) knowing that we had contributed a good part of the sum initially. Now the question of how to allocate our savings arises. At the same time, and without saying too much, I managed to reduce my working hours to around 90% without lowering my salary, which is good. My wife would like to go to 80%, but her employer is less accommodating. The quest for time is progressing, and to make it progress further, we will have to properly allocate the future savings flow.

For the moment, the assets are a home and cash in CHF to invest (not much, for the moment). The idea was to open an Interactive brokers account, and to invest in the very very long term, that is to say, to do absolutely nothing once you are invested. So the growing dividend is a serious option. I like Warren Buffet's little phrases, especially these:

“I don’t know when to buy, but I know what to buy”

"If you're not comfortable holding a stock for 10 years, don't even think about holding it for 10 minutes" (or something like that).

I have experience in financial markets and a "math" background (but not "accounting"); and I have a strong pessimistic and "risk adverse" bias. The market seems to me to be very much like a falling knife, as Jérome likes to say, and so for the moment I am waiting a little stupidly with my cash, which is not necessarily a good idea. I console myself by telling myself that it is in any case a fairly small amount in cash.

Among Swiss stocks, I am monitoring Geberit and Swatch Group (in my opinion attractive for a long investment. With the desire to let it sleep). In the US, I will also buy Google for sure, one day (but neither Apple nor Amazon). Feel free to share your opinions on this review 🙂

There you go, I've already talked a lot 🙂 I think I'll mainly contribute by posting in the comments now.
See you soon,

Frouzback

 

[Jerome]

Ah ah, frouzback, what a nice nickname 😉

thank you for your diligence. You seem to be well on your way to financial independence and I congratulate you.

It's always good to hear the opinions of French readers, who also live in Switzerland. I've often heard French people say that in their country, financial culture is not very well developed, and that financial skills are therefore lacking. This is apparently not the case with you. Nor do you seem to me to be a follower of the welfare state, as there are many in your beautiful country. You've taken matters into your own hands and you've already been able to significantly improve your condition as a forced worker-consumer (improvement meaning, of course, liberation).

Some aspects of your speech remind us, and this is something I've already pointed out a few times, that it's one thing to achieve a certain financial affluence, but quite another to be able to translate it into a real improvement in quality of life, notably, and perhaps above all, by saving time. It's as if Western life has to remind us every day, every hour and every minute that we have responsibilities and tasks to perform. Employers' resistance to part-time work is a blatant example of this, even though Switzerland is paradoxically one of the world's best performers in this area. Personally, I've had to fight very hard to reduce my working hours again and again. Today, I'm still constantly on the lookout for new strategies to further reduce it. Almost everything pushes our employers in exactly the opposite direction. The only argument is almost always the financial gain they can make by paying less.

Like you, I'm math-oriented, not accounting-oriented. I'm intuitive, not factual. I think this is paradoxically an advantage in the stock market. You have to keep an eye on the big picture, step back and look at the big trends.

Like you, I too have a pessimistic side, which isn't part of my personality, but rather my experience of the stock market, since I started in 2000. This has taught me to be extremely cautious.

All the best to you and looking forward to reading you again.

 

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[frouzback]

It is always a pleasure to have the opinion of French readers who also live in Switzerland. I have often had the remark of some French people who consider that in their country the financial culture is only very little developed and that therefore the financial skills themselves are lacking. This is apparently not your case. Likewise, you do not seem to me to be a follower of the Welfare State, as there are many in your beautiful country.

No, actually... but my opinions are very marginal in France anyway. In 10 years I have become more pro-Swiss than the Swiss themselves I think. 🙂 especially with regard to Swiss democracy.
The French do not only have faults, however, when it comes to finance: they are generally very economical and savers. But these savings are directed towards the acquisition of a main residence (which is good) and then... towards 'life insurance' type funds (which is much less good). Rarely are shares purchased directly, in fact...

Certain aspects of your intervention remind us, and this is something that I have already mentioned a few times, that achieving a certain financial comfort is one thing, but it is another to be able to translate it into a real improvement in the quality of life, in particular, and perhaps above all, by saving time.

Yes, for me there is a double objective to saving.
– manage to work for less than 100% while maintaining a good level of income that allows more savings. We are counting on the snowball effect of savings, since in our world money generates money.

– be calm at the end of your career to stop working completely or almost completely. My wife and I's pension funds offer a conversion rate of 5% on 2nd pillar assets, which is a big joke when you know that this rate will certainly drop again and that the age to be able to claim it (65 years) will probably increase. The only valid solution I see is to create your own lifelong pension to stop working much earlier (who wants to work until 65? 67 years? ...).
And, the cherry on the cake: the capital saved and its income are passed on to the children (unlike the second pillar capital which – in addition to bringing in epsilon for a potentially short period – disappears upon death). This point is VERY important to me because I want my daughters to have a better life than mine; and I am convinced that income from capital will allow them to be less enslaved by the need to have income from work. In short, they will be able to work less and flourish more.

Okay, I know I'm preaching to the converted here.

Like you, I also have a pessimistic side, which is not part of my personality, but rather my experience in the stock market, due to the fact that I started in 2000. This taught me to become extremely cautious.

The internet bubble was something. My personal 'pessimistic' experience is that I was still working in the trading room in 2007, 2008, 2009. I haven't been there for a long time now and I'm lucky enough to no longer work in the finance sector at all in fact 🙂
But, suddenly, it is clear that I would NEVER invest in a banking giant like UBS, BNP Paribas or whatever. Never. It will be a good choice at times, and a missed opportunity at times…

But my plan is actually very simple: invest in companies that will still be doing the same business serenely in 20 years, that will maintain their dividend and will not resort to capital increases for aggressive acquisitions.

Invest — and once you’ve made the decision — don’t touch anything. No selling. Keep it for life.
I don't intend to worry much about the price movement. I just want a return, not a high one, but a recurring one. If the stocks I buy triple without changing the dividend - that would obviously be news, but on the other hand I couldn't buy more without penalizing my return.
If it loses 50% without a capital increase and a drop in dividends (it will happen...), well I will not consider having made a mistake... (be careful though with regard to the temptation to strengthen).

On the other hand, if the dividend falls, then we can talk about a mistake. I quote Buffet:
“I don’t know when to buy, but I know what to buy”

Buffet is right: I have no idea when to buy. I don't really know what to buy either, but I know what I won't buy. My Interactive Brokers account is open, and I plan to start smoothing out some purchases (buying gradually, every month, for a constant CHF amount), which should reduce the impact of my incompetence on 'when to buy'.
For 'what to buy', we will focus for the moment on

– Switzerland, nothing but Switzerland. Not a definitive choice. The US and Japan are in the range of possibilities. Anything denominated in Euros, on the other hand, no. We will reconsider when the Euro has disappeared 🙂
– The sectors that I consider safe and promising in Switzerland, and in which I am not totally incompetent. Pharma/old, watchmaking/luxury, tourism.

'In there, I really appreciated the analyses on the companies operating ski lifts like Jungfrau, Titlis, Zermatt... I will take a position (to never sell), but I don't know yet if it will be on all of them or just some.
'The watch industry has suffered greatly from fears about China. If there is one thing I am optimistic about in the very long term: it is China. The trade war is in the prices. Trump and his tweets create a lot of noise, but I see this as opportunities. I will gradually take a position. Prices are ultra volatile in the short term, but if we look at the price a little it seems OK to me.
'Swiss pharmas are beautiful. But they are expensive. The other type of business that I would like is things to sell to our Swiss seniors. I had seen analyses on this site, I will reread that...
'And I'm also looking for other Swiss business ideas to buy 'for life'. No cantonal banks though even though I know you like them on this site 🙂

[frouzback]

And I have not yet thanked the contributors to this site for their work and their welcome, which is a serious mistake.
So Jerome, thank you and all the best too!
Dividinde, if you are reading this: thank you very much!

I might start posting a bit in the comments section of the different analyses :)

[Jerome]

Hello again,

Thanks for your encouragement, it's always a pleasure. A few words about your post:

– LPP: well, we agree, this is the biggest organized collective theft in Switzerland, maybe even worse than the AVS. A real scandal. We have to take advantage of getting this s… out while we can.

– Banks: I understand your point of view very well. I know that many investors have become totally resistant to it. Nevertheless, I think that this is precisely why there are some good moves to be made. Contrary to what is happening elsewhere, bank valuations are still quite attractive, even for quality stocks.

– buy & hold: following a dividend strategy, this is indeed most of the time the correct approach. However, there are a few cases where selling can make sense. I have already written about this several times on the blog or in my e-book, and I will come back to this topic very soon in a new article.

– the Swiss market: it’s a quality market, with some nice little gems. Dividinde won’t say otherwise. However, I find it too expensive overall at the moment. Not dividinde, the market of course 😉

– pharma/watchmaking: I am obviously more of a fan of the former, because it can practically be considered a “basic necessity”. For me, I put this sector in the same category as food, beverages, clothing, retail, alcohol and tobacco. These are generally very good providers of sustainable dividends. Watchmaking is necessarily more cyclical.

Good luck and I look forward to reading you in the comments, or here.

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