Tony Deden on the investment business

There's a difference between an investment practice and an investment business.  In a business, you seek to do what the customer wants.  A practice is that you do the right thing by the customer regardless of what he wants or what he thinks he needs.  You seek to do the right thing.  And that's very difficult, actually.  It's not very popular.

~ Tony Deden, "Tony Deden - Master Value Investor," State of the Markets, 40:50 mark, January 10, 2025

Tony Deden on investing

I'm not so sure that the business of deploying your capital is something that anybody could do just because they want to or because they're intelligent and smart and they have a medical degree or whatever it is they do.  I think it's a matter of common sense and temperament more than it is one of knowledge and intellect.

~ Tony Deden, "Tony Deden - Master Value Investor," State of the Markets, 1:14:50 mark, January 10, 2025

Tony Deden on high time preference in the Western world

We're no longer a culture of production.  We're a culture of consumption and thinking about today.  We've eaten the seed for tomorrow, completely.  Look, there have been difficult times in the past, many many and even worse, but we've never had this universal, more or less global - well, I should exclude parts of Asia, I suppose and parts of the world - but at least in the Western world, we've never had such a disintegration in every respect as we face today.  I'm not sure what impact that has long-term on many of the things we take for granted.

~ Tony Deden, "Tony Deden - Master Value Investor," State of the Markets, 40:50 mark, January 10, 2025

Tony Deden on the tech bubble (1999)

Let there be no doubt, that what we are witnessing is, indeed, history's greatest financial bubble.  The indescribable financial excesses, the massive increase in debt, the monstrous use of leverage upon leverage, the collapse in private savings, the incredulous current account deficits, and the ballooning central bank assets all describe the very severe financial imbalances which no amount of statistical revision nor hype from CNBC can erase. 

As it happened in 1929 - a boom and bust with which this bubble is often compared to but which pales into insignificance when compared with it - as it happened in 1972, in 1989 in Japan, or in 1998 in East Asia, booms are followed by busts - they are called recessions, depressions, etc. - because booms sow the seeds of every succeeding bust. 

Their cause is not the fault of capitalism as it has been suggested, but an excessive amount of money and credit created by central banks.  Yet, this seems to escape the understanding of those who will, in one day, convene congressional hearings to determine what caused this destruction.  The culprit is, as it always has been, the same organization, which professes interest in bringing about price stability and low inflation: The Federal Reserve Bank and its policies of money market intervention, credit creation and loose money.

~ Tony Deden, "Reflections on Prosperity," Safe Haven, December 29, 1999

Tony Deden on the business owner

Instead of taking our cues from financial types, let’s consider the owner of a long-standing enterprise.  He wants to avoid going out of business (and so do I).  He is entirely uninterested in what others do (and so am I).  He wants to remain competitive, relevant and enduring (so do I).  Yes, he aims to be profitable but, he really knows that, in the long run, profit is the result of being successful at what you produce, not the result of chasing higher securities prices.  He, too, deploys irreplaceable capital.  He, too, considers the scarcity of his resources and the value they reflect in all his actions.  He knows the difference between something that has financial value and something that has true economic value (so do I), and he wishes to leave something meaningful to the next generation (so do I and so should all of us).

~ Tony Deden, "Arise, prudent man," Grant's Fall 2018 Conference, October 19, 2018

Tony Deden on investing in resource companies

I believe we are witnessing the beginning of the end of the age of financialization and, if I’m right, then owning commodities is going to be essential.  But how do we do that in the best way possible? 

It is not so easy as you might think.

Finding exceptional companies with first-class management and exposure to the right commodities is difficult.  But if you are prepared to look in places where others are either discouraged from investing or which are simply overlooked, you can find exceptional things.  Valuable things.

~ Tony Deden, "Two Men in a Boat," Things That Make You Go Hmm..., September 27, 2020, p. 11

Michael Weeks and Dominik Schönenberger the financial industry and moral decay

Modern man, enthralled by the contrivance of credit growth and the resulting asset price inflation and unconstrained by the notion of scarcity in economic goods, sees the act of investing merely as that of buying something so as to sell later, hopefully at a profit.  As a consequence, in the pursuit of such elusive profit, we witness the rise of a financial industry replete with every form of artifice which, while ostensibly seeking to give us advice, tends to ultimately impoverish us, not merely in terms of money, but, to a greater extent, through the decay of our innate instinct about what is right and wrong.

~ Michael Weeks and Dominik Schönenberger, "In defence of financial anachronism," Edelweiss Journal, May 24, 2018

(Weeks and Schönenberger are protégés of Tony Deden, founder of Edelweiss Holdings.)

Tony Deden on how quantitative easing changed the rules of the investing game

In the beginning of the QE period, I became convinced that the system was going to destroy the nature of money itself. I became convinced that the rules of the game had changed completely. When the rules change, the basic framework with which you make decisions needs to change.

~ Tony Deden, interview with Grant Williams, Real Vision, July 5, 2018

Tony Deden on money debasement

Dishonest money begets dishonest statistics, dishonest accounting, dishonest balance sheets, dishonest means, dishonest objectives, dishonest compensation policies, and dishonest relationships; that it begets ambiguousness and corruption in every aspect of life.

~ Tony Deden, "Investment value in an age of booms and busts: a reassessment," Grant's Fall Conference in New York, October 9, 2018

Anthony Deden on confusing money printing with wealth creation

Frankly, we now have two generations of economic agents who are entirely ignorant about the nature of money. We welcome rising prices and see them as wealth even as they are merely the result of inflation. We demand more cash to save the system, instead of allowing those who fail to go bankrupt, so that more efficient competitors can emerge. We have tolerated the Swiss National Bank sale of our gold reserves in exchange for American paper money and promises.

We demand cheaper currency to stay competitive because we do not know the true nature of competitiveness. If cheaper currency is the source of wealth, where has Bangladesh gone wrong? If cheaper money means economic prosperity, why not just print as much as we can and give it out to everyone? We have become fools. The customers know nothing and the advisers know even less. And then we have the idiot economists—the neo-classical, Keynesian variety with solutions to problems they did not even anticipate; solutions that have, in fact, long been discredited. And so we lurch from crisis to crisis—eating our meager capital in the hopes of becoming rich in money. It’s a pity.

~ Anthony Deden, "Reflections on the Role of Gold in Investment Practice," November 19, 2009

Tony Deden on the credit crunch

Despite the indifference and bullishness that permeates the stock markets, we continue to have considerable concerns about the impact that the real economy is likely to suffer as a result of the untangling of such momentous financial mess. In fact, we view these shocks not as a result of some specific malaise, such as the subprime fiasco, as much as tremors that precede the collapse of a phoney monetary order.

~ Anthony Deden, The Edelweiss Fund Monthly Review, October 3, 2007

Tony Deden on inflation, the credit and banking crisis, and moral decline

As day after day brings to light the damage caused by the credit and banking crisis of our times, man's natural reaction focuses on solving such real problems. Yet, most investors cling to their misplaced optimism in the ability of government employees to provide solutions, despite ample evidence that points to the opposite, and despite the fact that these same persons and institutions are responsible for creating this crisis in the first place.

The crisis we face is not merely one of a bankrupt monetary system, but also a crisis of ideas that contributed to the relativism of our times and the collective arrogance of those unable to distinguish between money, credit and capital or those wishing to suspend the laws of scarcity via sophisticated finance. In the process, a few have enriched themselves beyond description while the fate of most is one of continuing impoverishment. This is not a failure of capitalism but a result of the intellectual and moral poverty that grips our world. In the end, the medicine being administered, whether via inflationism, further regulation or direct and indirect nationalization of banking, is likely to contribute to further malaise - for we have focused on solving a problem without either understanding its nature or identifying its genesis.

Financial history will someday record this year in the same manner in which past financial disasters are embedded in the memory of our parents and grandparents. As it was then, the genesis of the problems started years earlier, yet very few recognized it at the time. As it always happens, even the "experts" are surprised by the severity of the ongoing pain necessary to correct the imbalances built over many years. Recoveries from economic disasters demand a period of cleansing that last many years. More often than not, the ensuing problems are aggravated even further by the invariable financial and regulatory meddling by well-intentioned bureaucrats.

Today's deliberate destruction of money and savings, via inflationism, is an attack on private property and an attack on freedom as we know it. We stand at the vanguard of what could be a violent period of upheaval - one of many that history has witnessed.

~ Anthony Deden, Sage Capital Zurich AG, Edelweiss Fund 2007 Annual Report, March, 2008

Tony Deden on money

When you destroy the money, you destroy the glue that holds society together.

~ Anthony Deden, Sage Capital Zurich