This morning, I received a newsletter from Wirtschaftswoche (economic week). A magazine about economics and business. For visitors, who understand German, here’s the link to the newletter
For all others, I have asked my translation AI, Deepl, to translate:
(Monday, 11 November 2024)
Dear Mr van Linda,
When you think of flourishing stock exchange landscapes, the Netherlands probably doesn’t immediately spring to mind. Quite wrongly! For one thing, the Dutch stock exchange has a long tradition – the longest in the world, in fact. The first ever stock exchange was founded in Amsterdam in 1602 to trade the securities of the Dutch East India Company.
But the Netherlands has also had a lot to offer investors in recent times. Over the past twenty years, Dutch equities, as measured by the MSCI index for the Netherlands, have actually outperformed American stocks most of the time. This is despite the fact that the US market has benefited enormously from strong tech stocks, leaving the European market far behind.
The Dutch stock market is being dragged down by another stock market heavyweight: the semiconductor supplier ASML. This company is still worth a good 250 billion euros, even after its sharp fall in recent months. Its complex lithography systems are unique in the world and at the same time indispensable for the production of modern chips. The group is based in Eindhoven and used to belong to Philips.
Its monopoly brings high profits and, over the years, returns that are mainly known from the US tech giants.
But the list of attractive companies does not end with ASML. With ING, the small country has a much more valuable bank to offer than Germany. ING is currently worth a good 48 billion euros on the stock exchange, Deutsche Bank only 31 billion and Commerzbank just 19 billion, despite the takeover fantasy that has been fuelling it since the entry of the Italian bank Unicredit.
The comparison is less clear if the leading index of the Netherlands is used instead of the MSCI index. In the past, the AEX 25 did not perform as well as the American S&P 500, but still much better than the Euro Stoxx 50. However, the AEX 25 is not really meaningful. Almost a third of it is made up of the consumer goods manufacturer Unilever and the oil company Shell. Both companies have Dutch roots, but are now based in the UK.
The Amsterdam stock exchange also offers an innovative payment processor. Adyen is successful worldwide, worth a good 43 billion euros and did not even have to go to America for its IPO, but instead raised capital on Euronext Amsterdam. Ebay, Uber and Booking.com all rely on Adyen’s technology.
The healthy Dutch stock exchange also benefits from a strong economy. Spain’s economy is just 42 per cent larger than that of the Netherlands, even though the southern Europeans have almost three times as many inhabitants. The gross domestic product per capita in the Netherlands is a fifth higher than in Germany.
Investors can only invest broadly in the stock market with ETFs that track the leading index AEX or the small cap index AMX. Neither of these is an ideal solution for covering the local market. However, anyone interested in individual shares should take a look around. The Netherlands has exciting stocks to offer, today as it did 400 years ago.
And every time, I read about the success of my country, I wonder why German is not able to be like we. But I have an AI assistant đ His name is ChatGPT, but I prefer ChatBuddy đ
I would like to share this chat with you, based on sharing the article.
ChatBuddy: Thanks for sharing, Rob! The newsletter presents such an interesting perspective on the Dutch stock exchange. Itâs fascinating that despite the tech dominance in the US, Dutch stocks have consistently outperformed over the years, and ASMLâs unique positioning with its lithography systems is quite impressive.
The newsletter highlights how the Netherlands has quietly established a robust economy and stock market, even competing with American and broader European markets. It’s incredible that Adyen chose Euronext Amsterdam for its IPO instead of heading to the U.S.âa testament to the strength and appeal of the Dutch market.
Let me know if youâd like to discuss or explore any part of it further!
Me: I often wonder, why Germany isn’t able to perform like we do. We re living in dangerous times, made of threats like Trump, Musk, North Korea, Putin and Brics all together
ChatBuddy: Germany, Europe’s largest economy, is currently grappling with several challenges that have hindered its economic performance, especially when compared to the Netherlands. Key factors include:
1. Energy Transition and Industrial Dependence: Germany’s significant reliance on manufacturing sectors, such as automotive and chemicals, has made its economy vulnerable to global shifts and energy price fluctuations. The transition towards renewable energy, while essential, has introduced complexities and costs that impact industrial competitiveness. https://www.socialeurope.eu/germanys-true-economic-disease
2. Demographic Shifts: An aging population has led to a shrinking workforce, increasing the strain on social welfare systems and reducing the labor pool available for economic activities. https://www.imf.org/en/News/Articles/2024/03/27/germanys-real-challenges-are-aging-underinvestment-and-too-much-red-tape
3. Political Instability: Recent political upheavals, including the collapse of the coalition government, have created uncertainties that affect investor confidence and economic planning. https://invezz.com/news/2024/11/07/german-economy-faces-mounting-challenges-amid-government-crisis/
4. Global Economic Pressures: Geopolitical tensions and global economic shifts, such as trade disputes and the rise of emerging economies, have disrupted traditional trade relationships and supply chains, posing additional challenges to Germany’s export-driven economy. https://www.lemonde.fr/en/opinion/article/2024/09/13/germany-s-major-economic-error-is-taking-all-of-europe-down-with-it_6725919_23.html?utm_source=chatgpt.com
In contrast, the Netherlands has maintained a more diversified economy with a strong emphasis on services and technology sectors, which has provided resilience against similar global pressures. Additionally, the Dutch economy benefits from a robust financial sector and strategic investments in innovation and infrastructure.
Addressing these challenges requires Germany to implement structural reforms, invest in innovation, and adapt to the evolving global economic landscape to regain its economic momentum.
Me: I have a problem working in Germany as a Dutchman. Example. I am an expert in Agility, Digitalisation and Innovation. When AI became a global topic, I was thinking about combining AI with Agility.
Of course, there are a lot of “free” workshops at the moment. I like to call them Instagram Marketing.. I started my, as I lke to name it, Professional Skill Transformation ;), when I was 54 and I am still learning and collecting Micro Credentials on Udemy and Coursera.
This is regarded as not normal in Germany
ChatBuddy: Your dedication to continuously evolving and adapting is impressive, especially in fields that are constantly transforming, like AI, Agility, and Digitalisation. Germanyâs cultural perception of lifelong learningâespecially at a stage when many professionals might have “settled” into their expertiseâdoes seem more conservative compared to the Dutch perspective. In your case, combining AI with Agility was forward-thinking, yet the resistance you encounter reflects the broader challenge of a risk-averse, traditional mindset in many German workplaces.
It sounds like a great opportunity for you to introduce this âProfessional Skill Transformationâ concept as a path for others, especially those willing to adapt and innovate. Your openness could inspire those around you to consider continuous learning as a strength rather than something âabnormal.â
Me: But is this mindeset nor dangerous for Germany?
ChatBuddy: Absolutely, this mindset can indeed be dangerous for Germany, especially in todayâs rapidly evolving global economy. When companies or even entire countries are slow to adapt, they risk falling behind in innovation and competitiveness. The resistance to lifelong learning and agilityâtwo essential elements in a digital and AI-driven worldâlimits Germanyâs potential to stay competitive on a global scale.
This cautious, often skeptical attitude toward change can create a culture of âplaying it safe,â which might work in stable times but is risky in uncertain and competitive landscapes. If organizations don’t embrace agility, digital transformation, and AI as strategic imperatives, they could face:
- Loss of Global Competitiveness: Other countries with more flexible, forward-looking approaches are better positioned to respond quickly to technological advances and shifts in consumer demands. This agility often results in faster innovation cycles, attracting global investment and talent.
- Brain Drain and Talent Shortage: When lifelong learning and innovation are seen as unusual or unnecessary, it can drive away forward-thinking professionals and younger generations who value these principles. Germany risks losing skilled individuals to more adaptive and innovative environments abroad.
- Limited Economic Growth: Germanyâs economy is deeply rooted in industries like automotive and manufacturing. These sectors need agility and digitalization to stay relevant, especially as AI reshapes production, logistics, and customer engagement. If digital transformation lags, Germanyâs GDP growth could stagnate, impacting long-term economic stability.
- Reduced Ability to Handle Disruptions: Agility allows for quicker adaptation to unexpected challenges. A lack of flexibility limits an organizationâs resilience, making it more vulnerable to disruptionsâwhether from technological advances, new market players, or geopolitical issues.
Encouraging a shift toward a âlearning mindsetâ and showcasing the value of continuous upskillingâlike your own journeyâcould be key to sparking a more resilient, innovation-driven culture in Germany.
