German Super-Investor Shuns Porsche and BMW

Frank Williams
by Frank Williams
german super investor shuns porsche and bmw

Screw past performance. The most important factor in choosing a stock is… where the company does business. So says Jens Ehrhardt, Porsche-driving manager of Dr. Jens Ehrhardt Kapital AG, Germany's top international stock fund. Bloomberg reports Ehrhardt won't buy stock in the German automaker because about a third of its sales come from "debt-ridden Americans." He dropped almost all of his holdings in BMW because about one fourth of its sales come from the U.S., and dumped over half of his stock in ThyssenKrupp AG because they're putting a $4.2b steel plant in Alabama. Gunther Westen, head of asset allocation at at WestLB Mellon Asset Management in Dusseldorf disagrees: "I've heard doomsday scenarios on the U.S. since I've been in this business. I don't believe them." So where does Ehrhardt put his money? German companies doing business in China.

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  • Quasimondo Quasimondo on Sep 18, 2007

    Economists in the know have been screaming from the mountaintops about the average American's inclination to spend more and save less and the economic cliff we are teetering on because of it. If he was really worried about his investments tanking because of 'debt-ridden Americans' then he would've rid himself of these holdings a long time ago. Waiting until now when we're in the midst of a mortgage meltdown tells me that either he wasn't on the ball as an investor, is acting on Old World arrogance, or is using a combination of both. This is posturing at it's finest, and nothing more.

  • Brownie Brownie on Sep 18, 2007

    Oh, I don't think his investment (or divestment) rationale is valid. :) I just don't think Porsche sales are exclusively or even primarily attributable to people with significant assets relative to their income/spending.

  • Quasimondo Quasimondo on Sep 18, 2007

    With the lowest Porsche starting at ~$45K and quickly escalating from there, it's more than likely that anybody who purchases one of these cars has the income to insulate them from all but the most serious economic downturns. These cars are viewed as 'toys' so to speak, and more than likely, the person who buys one isn't going to make it their primary vehicle. If they have the money for two cars, then their debt/income ratio probably isn't something to worry about.

  • Redbarchetta Redbarchetta on Sep 18, 2007

    I used to see a lot of daily driver Boxster's when I lived in Atlanta and driven by people that weren't making huge amounts of money. The housing boom put a lot of people into Porsche's that probably shouldn't be in them. And when the free ride ends these exact people are going to be in a world of hurt. As much as I like those baby Porsche's I think it's going to come back to bite them in the ass bringing there prices so low and accessible to more of the masses. Who will keep buying all those cars when the recession hits hard.