Espresso with Experience

During the Covid lockdown, I missed one thing above all: a really good espresso. Not the frothy version from the fully automatic machine that often ends up in the cup as a pale imitation of the real thing. But the genuine, strong espresso from a portafilter machine. With dense crema as the result of proper extraction.

My Arte Di Vittoria I bought back then – a machine from the year 2004 – doesn’t give up that dense foam so easily. It took me weeks to get the hang of it. Bean quality, grinder, grind size, amount of coffee, temperature and tamping – everything has to be just right. And even then, the outcome varies. A professional barista would still find too much spread in my results.

Good investing isn’t about reading the coffee grounds

What surprises me: many investors base their decisions on economic forecasts. Yet the economy is a complex machine with hundreds of variables. Even a good espresso takes a lot of experience. So who could reliably forecast GDP growth?
In the US, estimates for real growth usually range between 1.5 and 2.0 percent. But once a crisis or a pandemic hits, all predictions go out the window. So why rely on them in the first place?

Stir gently, don’t reshuffle in panic

At Gutmann, we focus on what we can actually assess: sustainable business models, quality, and long-term development. Of course, our portfolios won’t be immune in a crisis. But we don’t have to panic and reshuffle just because we were betting on hyped-up promises that never materialize.

So instead of staring wide-eyed at the screen, we prefer to calmly make ourselves a good espresso. If you’re well-prepared, you can afford to do just that.