What happened to banks?

My vacation is coming to an end, and I had the opportunity to meet friends, old colleagues, new potential colleagues (in case I decide to return to Berlin someday) and re-visit all my favorite places. I admit, it might be a cheesy thing to do but there is this kind of nostalgia coming up every time I am here which is hard to resist.

Since I am investing in German stocks (among others) I was also wondering to see some signs for any economic changes, and I found 2 interesting points that I would like to point out here.

  1. Shopping centers are more popular than ever. It seems the global trend of setting up large shopping centers and design them to become the place to spend your free time at, is also a thing in Germany. It seems that new shopping centers are popping up everywhere and they are constantly full. I also got to say that they are set up in a pretty creative manner, with interesting areas for adults, children, regular events like mini-concerts or dancing competitions, singing performance, etc.

    So what is my takeaway from this? Real Estate Market is booming, hence investing in mall REITs (Real Estate Investment Trusts) doesn’t seem like a wrong idea.

  2. Banks are disappearing – everywhere. I had my first bank account in my life at a local government-run bank which operates under the name “Sparkasse”. I would say, that this was always the least modern and least preferred choice among banks that I could choose from when I was a student and while it had branches all over town, so did its private competitors. Not so this time. In fact, in the street where I used to live, all private banks disappeared. The only bank branch in a radius of 4 km is, you guessed it, a Sparkasse.

    And not only this, even the few ATMs of other banks that I found were useless to me, as they were not supporting Union Pay. I am a customer of the Bangkok Bank which doesn’t support VISA or Maestro – it works with Union Pay which is a pretty solid Asian banking standard. So you might have a guess which ATMs turned out to be the best for me. Indeed, again it was the ATMs offered by the Sparkasse.

    My takeaway from this? German banks are in trouble – and are forcing through changes to let people turn towards more online banking.

These are just a few observations that I noted in Berlin and Hamburg, of course, it’s not representative but it gives me some idea on which topics I should dig deeper and see what is going on there.

The same goes for every investor. One should always observe the surrounding, see what is happening in our areas, which products are becoming popular, which trends influence our neighborhood. These small things can often have plenty of questions and even more answers behind them, which can give even small individual investors hints for emerging market moves.

So keep your eyes open, and once you observe something, dig deeper into it and try to understand what is happening there. It doesn’t need to result in an investment, but it’s never wrong to understand market dynamics, and they always start and end in our regular neighborhoods. At the end of the day, it’s people like you and me who are purchasing, consuming and accepting or rejecting products & services – which ultimately decide which ideas, concepts, products & services, and companies will turn out successful and are worth to be in our portfolio.

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