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Alpenrose Wealth an interview with Partner Pierre Gabris

1. Please give us a brief introduction about yourself and your firm.

Pierre Gabris: The Alpenrose group is made of two main companies called Alpenrose
Wealth Management AG and Alpenrose Wealth Management International AG. We are a
Swiss independent money management firms that serves primarily wealthy individuals
and help them in their financial affairs.
Pierre Gabris, is one of the founders of the firm. A trained engineer, he worked at various
banks (UBS and Lombard Odier) before founding Alpenrose. He has been traveling
around the world and advises clients from over 30 countries.

2. I know your business is very international and you also travel around the
world on a regular basis for business. What do you see or hear right now
from your clients and people you work with that you think are important to
share with us?
Pierre Gabris: There is a general understanding that things are doing better around the
world in general, with however some serious question marks about various issues:
-How will the massive money printing of the Western central banks end up, how will the
bubbles that we are currently creating remain under control.
-How will the Western currencies be affected by this money printing, will the USD lose its
status of reserve currency
-How will the geopolitical situation evolve with a number of countries in total chaos: Irak,
Syria, Lybia, Ukraine, etc.

3. Since you are based in Europe, lets first talk about the European market. In
the last few years, we have seen a lot of turmoil in Europe. Some people still
think the worst is to come while others feel the valuations in European
market is very attractive now. What is your view about European economy
and market in general? Any countries you like particularly in 2014?
Pierre Gabris: While some European countries like Germany, Ireland and Spain have
shown signs of recovery, most countries of the Eurozone are still lagging behind. France
and Italy are showing negative growth numbers and are technically in recession. Even
more worrisome is the fact that these large economies like Italy and France have not
engaged in any of the structural reforms that are needed. Therefore we think Europe will
hardly grow this year, which will likely prompt Mario Draghi to enforce more quantitative
easing measures through 2014.

4. Despite a plethora of worries throughout 2013, the US market seemed to

plow right through, with the Dow and the S&P 500 setting record highs and
2013 turned out to be one of the best performing years for US stocks since
the 1920s. This market advance occurred in spite of a sense of disbelief by
many investors. There are a lot of talk about an energy and manufacturing
renaissance in the US. Many analysts believe that he US is better-positioned
long term than any other country despite its ongoing fiscal problems. As the
Fed started tapering, what is your outlook of the US market in 2014?
Pierre Gabris: The economy in the US is showing signs of improvements and the FED
will continue with its tapering through 2014, we believe the market will likely want to see
yields on the 10-Y to be around 3.5% within the next 12 months. On the back of the
economic recovery and QE we remain very bullish on US equities in general. Especially

the energy sector is offering great investment opportunities. The US is going to export oil
and gas, which will require some massive infrastructure investments that will benefit lots
of US firms.

5. In the last few year, while the US market moved up significantly, the
Emerging market was left behind and valuations in many emerging market
countries including China are at a much lower lever compared with that in
the US market. What is your view on Emerging Market in 2014? Any
countries you like particularly? If you want to invest in Emerging Market
now, how are you going to invest?
Pierre Gabris: Most Emerging Markets struggled after the first hints of tapering by the
FED and were among the main losers in 2013. We avoided most of the EM markets
recently and remain careful with EM markets, especially in China, at least until we see
results from the leadership change in China. We would much rather focus on smaller
economies like Singapore, where we in particular focus on REITs which are offering good

6. What are the most important issues or events you are watching for that could
potentially change your outlook of the global market in 2014?
Pierre Gabris: We are not watching for single events but are careful and will be following
closely the interest rates on government bonds. We believe that the current asset price
increase will come to an end the day yields on government bonds start to rise and reach
levels in the 3-4% range. Lots of Western countries will face difficulties to finance their
debt if interest rates reach these levels and we will want to make sure that we cut our risk
exposure if we get there.

7. For many investors, the biggest factor in determining long-term success has
been asset allocation. That is also what you do for living. If you have
$100,000, where will you put your money in 2014? Which currencies do you
like? What will you avoid putting money into?
Pierre Gabris: We definitely like equities, especially US equities and focus primarily on
high quality, capital-efficient stocks using various investment vehicles such as single
stocks, sector ETFs or Funds. We are also convinced that M&A activity will do well in in
the coming years. On the bond side we are comfortable with high quality corporate bonds
with a rather short duration of 3.5-5 years, as we expect rising interest rates going
forward. On the currency side we favor currencies of countries with stable financials like
the Swiss franc, the Norwegian crown, the Singapore Dollar and to some extent the New
Zealand dollar. We are rather bearish on the EUR as the recovery in the EU zone is
expected to remain subdued which will likely lead the ECB to further weaken the EUR.
Last but not least, we do like to have some gold in the portfolios to provide some
protection against market volatility and geopolitical shocks.

8. As you have been in asset management business for many years, what is the
most important investment advice you could give to your clients and our
readers? Why do you think it is so important?
Pierre Gabris: Liquidity is likely one of the most important factors to watch. You want to
primarily invest in securities that are easily tradable, so that you can eventually sell if
things turn bad. Leverage is also a factor to watch, especially if volatility is increasing.
Going forward, we feel that the right mix of currencies will be important as we expect to
see some large currency devaluation in the future. Finally, we always want to be sure that

the banks where our clients assets are deposited are safe so that there is no risk to lose
the nominal.