Noah denkt™ - The Power of Balanced Reasoning
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Looking back on 2014
Noah denkt™ reports on its prediction success in a year marked by the Ukraine crisis and the oil price slump,  
first drafted on May 7, published on May 8, 2015
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Dear Reader,

We have to apologize to you for the belated publishing of our 2014 success report. But the transition from
2014 to 2015 was quite eventful for us. Don’t forget that we started our Wikistrat collaboration in January
(see
footnote*)
; we received the "2015 Best of - Finance" award in March and on top of it we kept wrestling with
technical issues related among others to a hick up between Java 8 and Yahoo Sitebuilder.  So, it is only now
that we find the peace of mind for a calibrated look back on our forecasting accuracy in the past year.

Before we do so, we would like to remind our readers about the fact that 2014 saw
the 100th anniversary of the
beginning of the First World War. Obviously, that First World War was the result of the first failed attempt of
competing and imperialist European national states to accommodate the nascence of an equally chauvinist, yet
unified Germany in 1871. Add to that the fact that this report will be published on May 8, 2015, when heads of
states gather in Gdansk and Moscow to commemorate Nazi-Germany’s capitulation at the end of the Second
World War you may understand why this projects spends so much time on defending the Franco-German
friendship, a pan-European entente and the Euro currency.  

With that in mind let´s look at the specifics of 2014. Four geopolitical events stand out and impacted the
general market sentiment and that of ours most: the East-West conflict with Russia over Ukraine and Crimea,
the sustained drop in the oil price and its effect, notably, on emerging markets, the continued austerity debate
in the Euro-area and to some extent the surfacing of ISIS in Syria and Iraq. Our position on all four issues has
been pretty coherent throughout:

On the Ukraine conflict, we have argued that i
t was a mistake to not react more decisively to the Russia’s early
military maneuvers on Ukraine’s border right after the Maidan revolution; we have also voiced our concern
about the fact that
the idea of a referendum on national unity in Ukraine has not been contemplated by
Western leaders; in fact, we even argued that it is
a strategic mistake by Western policy to insist on the
preservation of Ukraine´s territorial integrity, since the lack of social and cultural cohesion in Ukraine will
prevent that country from implementing and pursuing a much needed Latvian-style economic restructuring. It
has been our view that this mistake prevents Europe from experiencing a more powerful economic recovery
than the one we have witnessed up to.

No doubt, the European economy is currently starting to pick up steam. Unfortunately, it is quite unlikely though
that this acceleration will reach the staggering double-digit proportions that Europe technically deserves after
having made quite some painful headway in its economic restructuring.  Instead it cannot be denied that
current growth numbers are to some extent due to the ECB’s QE program and the effect this has had on the
Euro exchange rates.
Noah denkt™ continues to feel that the ECB’s deflation angst was overdone at the time
and that more faith in austerity politics would have gotten us to the same spot anyway. Generally speaking
though, the Eurogroup and the EU’s budget supervisors deserve praise for having maintained its austerity
focus despite many attempts by Greece, Podemos and others to challenge that. Needless to say that Noah
denkt™ did at no point betray its own pro-austerity convictions even though critics like Timothy Garton-Ash did
occasionally manage to drain our emotional resolve. If doubters, even after the outcome of today’s British
elections still feel that the austerity approach is unwanted at this time, we are hard pressed in deed to find any
additional arguments to convince them otherwise.

If we feel that the current rise of growth expectations in Europe vindicates our firmness in matters of austerity
advocacy, we have to admit that the oil price slump clearly caught us by surprise. What did not surprise us,
however, was the fact that there were serious market surprises coming like the one that we saw in the oil
market. On November 6, we published a dialogue to that effect
echoing the voice of Paul Singer of Elliot
Management. He had earlier alerted his shareholders to the fact that the dramatic money printing response to
the equally dramatic 2008 financial crash cannot continue without causing a lingering string of disruptive, yet
hard to predict side effects. Noah denkt™ continues to share Mr. Singer’s view in this matter and believes that
current market events like the slowing down in China, the Emerging Market drop and the hiccup in the US
should also be understood in the context of that string of unwelcome surprises which the massive Keynesian
rescue efforts post-2008 cause to this day. After all, it is no surprise that the world economy is still processing
and working through the near-death health scare it experienced during the financial crisis. And despite ,or
perhaps due to all the money printing, serious growth will probably not come for quite some time.

Before we go to the numbers, we should briefly also address the ISIS/jihad issue in Syria and Iraq, not the least
because of the atrocities committed by terrorism there and elsewhere.  Clearly, these are difficult times for kids,
notably in the West. The labor market is undergoing tremendous change and the rise of new technologies
makes it ever more difficult for all of us to generate a sustainable income perspective for the future.  Add to
that the emotional stress that come with the need to be acknowledged and recognized by your peers and by
opinion leaders. So it is to a certain extent understandable that some kids crack up and hope to find a remedy
for their despair in jihad fundamentalism. Nevertheless we are convinced that this is a temporary aberration
which will eventually lose its current fervor due to its own internal pathology. It is also our opinion that it is a
mistake by public opinion to criticize the West over a supposed
lack of a coherent strategy for the Middle East.
We still believe that Western actions in the Middle East need to be open to improvisation because of the
unpredictable nature of the crosscurrents in the region. Noah denkt™ has therefore supported the US air
campaign against ISIS. And our project is not overly concerned by the tentative, sometimes tacit and
involuntary US cooperation with Iran and other Shia forces given the absence of acceptable alternatives.
Generally speaking, we continue to believe that
a realpolitik approach beats any kind of moral or social
hysteria at any time.

As usual we end these reviews with a look at the precise value added of our forecasting.
On January 31, 2014
we changed our previously bullish sentiment to a more bearish one.  (
“We believe that markets won’t be able to shrug
[the emerging market debt crisis] off as easily as our first intuition might have suggested. Instead we fear that this could be the
beginning of a more sustained period of uncertainty surrounding the emerging market success story”
) And on March 31,
2014, we returned to a moderately bullish attitude for the rest of the year. (Alter Ego of Noah denkt™: “That sounds
pretty optimistic. Is your market sentiment consequently getting bullish again? Answer Noah denkt™: Obviously, you are aware
that our views on the economy tend to have an early bird side to it. With that in mind our answer to your question is: ’Yes’ “
) .
Measuring our mood swings against the market indexes therefore reads as follows:
  Bullish Sentiment
Bearish Sentiment
Index
Jan 2 close
Jan 31
close
Value
added in %
Average
Value
Creation in %
Feb 3 close
March 31
close
Value
added in %
Average
Value
Creation in %
Dow Jones
Industrial
Average
16441,35
15698,85
- 4,62
- 2,43
15372,80
16457,66
- 6,6
- 5,92
S&P 500
1831,98
1782,59
- 2,7
1741,89
1872,34
- 6,97
DAX
9400,04
9306,48
- 0,9
9186,52
9555,91
- 3,87
Eurostoxx 50
3059,93
3013,96
- 1,51
2963,96
3161,60
- 6,26
  Bullish Sentiment
(- 2,43 - 5,92) : 2 =
- 4,17
  April1
Close
Dec. 31
Close
Value
added in %
Average
Value
Creation in %
Total Value Creation in 2014 in %
Dow Jones
Industrial
Average
16532,61
17823,07
+ 7,8
+ 4,45
(- 4,17 + 4,45) : 2 = + 0,14
S&P 500
1885,52
2058,90
+ 9,2
DAX
9603,71
9805,55
+ 2,1
Eurostoxx 50
3186,34
3146,43
- 1,3
With all usual caveats it is hence possible to say that our average value creation for 2014 boils down to a meager
0.14%. Without a doubt, not a fantastic result. And we should probably take our cues from highly disciplined,
professional snooker players when trying not to lose our face over this disappointing result. As bad as it is
though, we can also take solace from the fact
that half of the hedge funds followed by Michael Peltz’s Institutional
Investor didn’t beat the S&P Index.  

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Footnote *: On June 29, 2015, the Mastermind of Noah denkt™ terminated his collaboration with Wikistrat. It turned out to be too
difficult to juggle his dual responsibilities in the
Landei selbstVerlag and on Noah denkt™ with those on Wikistrat. The Mastermind
of Noah denkt™ is grateful to the Wikistrat management team for having invited him to participate as a Senior Analyst on the
Wikistrat platform.
© Landei Selbstverlag, owned by Wilhelm ("Wil") Leonards, Gerolstein, Germany. All rights reserved.

Reminder: Noah denkt™ is a project of Wilhelm ("Wil") Leonards and his Landei Selbstverlag (WL & his LSV). Consequently, all
rights to the texts that have been published under the Noah denkt
brand name are reserved by WL & his LSV.

The commentary and the reasoning that was provided on this page is for informational and/or educational purposes only and it is not
intended to provide tax, legal or investment advice. It should therefore not be construed as an offer to sell, a solicitation of an offer to
buy, or a recommendation for any security or any issuer by WL & his LSV or its Noah denkt™ Project. In fact, WL & his LSV
encourage the user to understand that he alone is responsible for determining whether any investment, security or strategy is
appropriate or suitable for him. And to leave no doubt as to what this means we urge our user to also note our extended
Legal
Notice.
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