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Painting by Alex Katsenelson

Zurich to Nice - Travel Notes

As I am sitting down to write about our Zurich to Nice trip, I simply don’t know where to start, with so many random thoughts and impressions that I want to spill onto these pages; thus this writeup may end being more random than my most random writeups and full of open-ended thoughts.

I’ll be sharing a lot of links on my Facebook page to photos we took on the trip, but since I am sharing links to my public profile you don’t have to be my Facebook friend or even pihave a Facebook account to access them. If you “like” the page, you’ll be notified of my future postings.

Oskar Kokoschka

My father always made a point for us to visit an art museum whenever we arrived in a large new city. I love art, but not with the same passion that I love classical music. But I think both my brother Alex and I got it programmed into our DNA to visit art museums whenever we travel (especially in Europe). This time, we were both smitten by the Zürich Kunsthaus (located a block away from my friend’s Guy Spier’s office).

It featured art by Oskar Kokoschka, Austrian expressionist (1886-1980). See his paintings here. Embarrassingly, I was not familiar with Kokocshka and was surprised by how much I liked his art. I was really taken by his cityscapes – they show life (energy) in the city that goes beyond buildings, roads, and bridges.

Impressionism started in France in the 1860s with the likes of Claude Monet and Edgar Degas. The Impressionist movement was in part a rebellion against photography, which became more advanced and influential in the latter decades of the 19th century. In contrast to the realism of photography, the Impressionists recorded their impressions of real-life objects. Instead of focusing on every minute detail of a person or landscape (think Rembrandt’s paintings), Impressionists focused on the mood their subjects evoked.

Expressionism was launched in Germany in the early 20th century and took Impressionism a step further by expressing the emotions and mood of the painters themselves. Unlike the Impressionists, they did not even paint real-life objects. Jackson Pollack and Wassily Kandinsky painted … lines.

If you think about art, be it music or paintings, it is not much different from a drug – it alters our mood, it unearths and amplifies our emotions. It is a somewhat personalized drug. I find that three quarters of the paintings in an art museum have little impact on me; they evoke zero emotions. Paintings that describe biblical events fall completely flat with me, for instance. But most Impressionists and some Expressionists make my imagination go wild. So, when I walk into in a museum I usually ask where they house the late 19th– and early 20th-century art. The Kunsthaus had a very large collection of Impressionists, and here are some pictures we took.

The Alps and Society

I live in Colorado. We go to the mountains a few dozen times a year. Mountains should not surprise me. I have to admit, though, that although this was not the first time I had been to the Alps, I was completely taken by the beauty of the Swiss Alps and Switzerland in general.

The Swiss Alps have this two-tone beauty – black, sharp, cold rock covered by gentle snow, with a pure blue sky magnifying the contrast. We took these pictures on our two-hour drive from Zürich to Klosters (the little village ski resort next to now-famous Davos, where VALUEx Klosters was held). I hope you’ll see what I saw.

And then there were the French Alps. Maybe it was just the weather we encountered (sunny days and low-hanging clouds), but the farther south (from Switzerland towards France) we drove, the less sharp and black and white the Alps turned. The cold black gradually morphed into warm blue; the sharpness gradually became more muted, and two-tone Swiss coldness turned into multitone and multilayered warmness. You may pick up on the change in the pictures that will follow in a page or two.

This made me think about how societies are shaped by nature. I am generalizing and stereotyping here, but when you think of the Swiss people you think well-organized, punctual, reserved, somewhat cold and unemotional. Their language is mostly based on German, and thus it is sharp and may sound a bit abrasive (sorry to all my German and Swiss friends).

Then you think of the French people – speaking a soft, rounded language, emotional and warm “lovers not fighters,” a lot less organized (their trains don’t run as punctually as Swiss trains (but then again, no one else’s trains run as on-time as Swiss trains).

When you think about geopolitics you have to think about geography – access to ports vs. being landlocked, fertility of land, larger rivers flowing through the country allowing goods to be easily transported, being surrounded by hostile neighboring countries, etc. Maybe we also should think about how nature shapes society. Just a thought.

Switzerland

Switzerland is an amazing country. Aside from the stunning beauty, I loved the food (a sausage is for me is what a burger is for Warren Buffett), the immaculate cleanliness of the streets (even the mountains look clean), and the fact that Switzerland has almost no crime or police officers. Well, kind of. Crime totals in Switzerland are identical to those in the US – 42 crimes per 1,000 population. But the definition of what the Swiss consider a crime is quite different from that in the US. Thus, if we look at violent crimes we find that the US murder rate is six times that of Switzerland. 

On the other hand, the Swiss take traffic violations very seriously. A person who is caught driving 180 kilometers per hour in a 120 kilometer speed zone may have to pay a fine equal to 10% of their annual income (and may even go to jail). There is something to be said for the fairness of income-based punishment.

Speeding is actually a significant crime in Switzerland. A friend of mine who is a legal Swiss resident may have his Swiss citizenship delayed by several years (he will have to wait for his wife to become a citizen first), because he got a speeding ticket.

Another friend of mine, who is also a legal resident, will have his village decide whether he can become a Swiss citizen. Yes, the village will hold a vote to see if he is a worthy addition to their community.

As I was talking to my friends about life in Switzerland, I was thinking about whether I’d want this life. On one hand, kids – five-year-olds – are walking to school on their own, without parents. In fact, my friend (a recent immigrant to Switzerland) was called to the principal’s office and asked not to walk his child to school. But on the other hand, I was wondering whether I’d enjoy living in a society that is so strict and homogeneous.

Again, just something to ponder…

VALUEx Klosters

Guy Spier’s VALUEx Klosters has again exceeded every expectation I had of it. I loved the conference when I first attended eight years ago, but I loved it even more this time. I liked certain elements of the format that are different from those of VALUEx Vail (the conference that I shamelessly plagiarized from Guy’s conference eight years ago). There were 75 attendees, but every single person had to present. There were a lot of stock pitches (and I now have a lot of interesting stocks to research), but the most memorable presentations were about subjects tangential to investing, like geopolitics, or not related to investing at all – like parenting.

On geopolitics – if you were a long-lived US investor, over the last 100 years you did not have to worry about macro. No matter what party was running the country or which occupant we had in the White House, or whether we were in a hot or cold war, the American economy eventually bulldozed over macro worries and marched higher, and so did the stock market.

If you were European, your experience with macro risks was quite different. If you were German and were born at the opening of the twentieth century, you’d have lived through two world wars interrupted by an enormous hyperinflation.

America is separated from the rest of the world by two oceans. It has the largest and still strongest economy, and it has a very peaceful relationship with its northern and southern neighbors. Finally, and as importantly, it is a stable democracy where government transitions happen peaceably. All these factors led to the US dollar turning into the world’s reserve currency and America enjoying seventy years of unprecedented prosperity.

I’ve been pondering whether globalization, the rise of populism, and much, much higher indebtedness have started to impinge on American prosperity. I know, another open-ended thought.

On parenting. Praising your kids is incredibly important. I know a lot of jokes have been made about American society giving participation prizes to every kid. I am not going to get into this debate. One of the presenters talked about praising kids daily, telling them how awesome and smart they are and that they can achieve anything. Though the sample was small – two kids – his kids are great students and most importantly good, kind, well-balanced human beings.

My parents always did that, too. This gave me the self-confidence to keep trying and never give up on myself when I failed or when I encountered harsh external conditions (anti-Semitism in Russia, or bad, demoralizing teachers). My parents’ praise stayed with me; it was the fuel that kept going when I could have given up on myself. They told me that if I tried, I could achieve anything. I still had to try hard, put in a great effort.

Masayoshi Son, CEO of Softbank – one of my role models – was always told by his father that he was a genius. I read that in Son’s biography, but recently I also found this interview with Son’s father.

Before Masayoshi entered elementary school, I taught him that one plus one equals two. The following day, he remembered the equation correctly. … and the words came automatically out of my mouth, “You might be a genius!” Although I continued to say the same thing to him for three days, I stopped, as I knew I was acting just like a doting father. I then changed my mind and decided to continue calling my son a genius because parents are responsible for sending consistent messages to their children.

As I kept saying the same thing over and over, I began to feel like Masayoshi would actually fulfill his potential as a genius later in life. After all, I had high expectations of my child, so I became even more determined to keep saying it.

Since there were 75 people presenting, if you had slides you were given five minutes, but without slides you had only three minutes. I did not know about this rule beforehand. I intentionally did not have slides, because I did not want them to slow me down. Also, I had just finished writing up my idea for a seasonal letter that would go to IMA’s clients, so I had a clear outline of my pitch in my head.

I figured out how to cheat the system. As I walked up on stage I handed a piece of paper that had three letters on it to Orly Hindi, the (wonderful) conference organizer, who was operating Powerpoint and the projector, and kindly asked her to put it up on the screen. A bit surprised but unsuspecting, Orly obliged.

Ten seconds later, as my slide came up on the screen, I said “Here is the ticker of the company I’d like to present. I guess I now have a presentation. I get five minutes instead of three.” The audience burst into laughter. (I’ll share my writeup on the stock I presented at some point in the future).

Jeffersonian Lunch

Guy introduced me to a concept I was not familiar with, but I absolutely loved it: the Jeffersonian dinner. The first one was conducted in the early 1800s by Thomas Jefferson.

Before the conference, Guy invited a group of twelve of us, including yours truly, to a Jeffersonian lunch. We all sat around one table. The rules were simple: one conversation per table. No side conversations allowed. I knew only a few people at the table. To break the ice, Guy asked each of us to share positive and negative highlights of their life or something else on their mind, and then as an afterthought to tell everyone who they were. Each attendee was given one to two minutes.

Then Guy identified a few topics from this go-around, and we discussed these topics for about an hour.

There is more than one way to conduct this Jeffersonian lunch/dinner. It doesn’t even have to be around a dinner table. One day a group of eight of us walked four miles to a restaurant that seemed to be in the middle of nowhere, well out in the forest in the Swiss Alps. For the trip back we had a carriage take us– it was a thirty-minute ride. At this point we knew everyone who was in the carriage, and in the Jeffersonian tradition we shared our favorite books from 2018. Here are some pictures from this walk and carriage ride back.

The reason I love this Jeffersonian idea is that it eliminates awkwardness from dinner table discussion. You are not limited to learning just from the people sitting to your right and your left. You are exposed to a diversity of opinions, and you don’t need to talk about the weather or other meaningless topics we subject ourselves to break the ice. It is a perfect instrument if you like to learn from others. I am seriously considering doing Jeffersonian dinners in Denver.

I did not end up skiing in Klosters this time. In the mornings I was struggling from an eight-hour time-zone difference, and thus instead of skiing I went on long walks with other attendees. I have no regrets. Here are pictures from these walks.

Here are photos Alex took of our evening walk in Klosters. You’ll see that they were taken by an artist.

Lausanne and Charlie Chaplin

When the conference was over my brother Alex and I rented a car in Zürich and went on our journey to Nice (south of France). Our first stop was Lausanne. We arrived in early evening as the sun was going down and were stunned by the beauty of Lake Geneva – one of the largest lakes in Europe, shared by Switzerland and France (the French call it le Leman). Here are some pictures we took.

Charlie Chaplin has always had a warm place in my heart since I was a little child in the Soviet Union. For American kids it was Mickey Mouse or some other cartoon character; for me it was Charlie Chaplin. You did not have to even speak a language to understand his movies (most of his classic films were silent movies). My oldest kids and I have watched The Great Dictator – the most anti-Hitler movie made during Hitler’s lifetime – a half a dozen times.

In 1953 Charlie Chaplin went to London for the premier of his new movie, City Lights, and was not allowed back into the United States. He was accused by Senator McCarthy of being a “communist sympathizer”. This is when Chaplin moved to Lausanne. In 1972, five years before his death, Chaplin returned to the United States to receive the Academy Award for Lifetime Achievement.

MI5 recently released their files on Charlie Chaplin, which showed that there was no evidence that Chaplin was a communist sympathizer or had any connection to the Bolsheviks (other than that little kids in Soviet Russia watched his movies with great admiration).

Charlie Chaplin’s house in Lausanne was turned into his museum, which is probably the most memorable museum I’ve ever visited. I was sent down memory lane to the sets of The Kid and The Great Dictator. Here are some pictures and videos from the museum.

I bought my five-year-old daughter Mia Sarah a small figure of Charlie Chaplin, and to my surprise she did not know who he was. Now I get to relive my Charlie Chaplin journey all over again – that’s the beauty of having kids. We started with The Kid.

Provence and the French Rivera

After Lausanne Alex and I drove to Geneva. To Alex’s disappointment, the Patek Philippe Museum was closed. We spent a few hours in Geneva, visited the Reformation Wall (see pictures here), then drove less than an hour to the beautiful French town of Annecy, often called “the Venice of the Alps.” Sitting on Lake Annecy and surrounded by gorgeous alps, this little town has preserved the architecture of the 15the century.

Our next stop was Lyon, the second largest urban area in France (see pictures here).

Then we drove to Grenoble, birthplace of Hector Berlioz (listen to his Fantastique Symphony here) and home to the 1968 Winter Olympics. We took a cable car to the fortress on top of the mountain, overlooking the city (see photos and vids here – note how gentle the Alps are here). We spent the night at Avignon (see pictures here).

At our next stop, Arles (see pictures here), we felt we had been transported to ancient Rome. The Romans took over Arles in 123 BC. It has not just one but two Roman amphitheaters (see pictures here).

Everywhere we walked in the old city of Arles we saw signs pointing to the van Gogh Museum. Vincent van Gogh spent over a year in Arles, and this is where he suffered his psychotic episode and cut off his ear. The town spent $15 million and turned an old hotel into the van Gogh Museum.

The only problem is that during the winter Arles has very few visitors, and maintaining insurance on van Gogh paintings is very expensive. To our surprise and disappointment, the van Gogh museum doesn’t actually have any van Gough paintings. To which my friend Adam Schwartz said, “That means I have a van Gogh museum in my house, as we have none too.”

While waiting for the summer, the museum housed a few exhibitions, one of which had photographs that made me feel that the pictures I took on this trip on my iPhone belong in a museum as well (or at least in this museum). But the visit to the van Gogh Museum was not completely wasted, as I had an opportunity to take pictures of Arles rooftops (see pictures here).

Our next stop was Cannes (see pictures here). I don’t know if most Americans, including yours truly, would know where to find Cannes on a map if it was not for the Cannes Film Festival. Just like Monaco (see pictures here), which we visited the following day, it seems like a place for the rich and famous to park and show off their yachts.

My favorite places on the French Riviera were Nice, Eze, and Saint Paul de Vence. Eze is a small village a short drive from Nice, often dubbed a “village museum,” because only 3,000 people live there. But it is incredibly well preserved and a fun place to walk the streets (see pictures here).

Saint Paul de Vence is a picturesque little village very close to Nice as well, and on many levels it looks just like Eze. Unlike Eze, however, it houses a lot of art galleries; thus in addition to walking ancient streets you can look at beautiful art, which we did (see pictures here).

Sant Paul de Vence is also the place where Marc Chagall spent the last twenty years of his life. Marc and our family go way back. One generation before my father settled in Murmansk, my ancestors lived in Vitebsk, a small town in Belarus that happens to be the birthplace of Marc Chagall. My grandmother told me stories about how their neighbors, Marc’s family, borrowed money and never paid it back. I always thought Grandma exaggerated a little, but I found the story adorable and enjoyed my hidden connection to a famous artist. Marc Chagall was buried in Saint Paul de Vence (see pictures here).

Nice was our final destination (see pictures here). Alex and I were walking in this city, down wide streets with beautiful but not very old buildings (by European standards), and it felt like another version of Cannes. Then Alex suggested that we make a turn to the right and go down a few flights of stairs. Suddenly we found ourselves in an old French city with very narrow streets and no cars, and I was teleported several hundred years into the past. This sums up the beauty of Europe – and it could happen anywhere in Europe. The old and new live so close to each other – just a few flights of stairs away.

Vitaliy Katsenelson

I am the CEO at IMA, which is anything but your average investment firm. (Why? Get our company brochure here, or simply visit our website).

In a brief moment of senility, Forbes magazine called me “the new Benjamin Graham.”

I’ve written two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. (I’m working on a third - you can read a chapter from it, titled “The 6 Commandments of Value Investing” here).

And if you prefer listening, audio versions of my articles are published weekly at investor.fm.

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