A turn of the year is always characterized by reflections on the past and the future. The passing of the present to the past as well as of an expected future to the present offers the opportunity to analyse a longer period of time. It also offers the opportunity to escape the “time compression” of the digital world and to place events in a reasonable time frame. But what is time and where are we today?


Concepts of time

Objective (absolute) time is closely linked to the development of astronomy, theoretical physics as well as the clock and calendar as timekeepers. In classical physics, it was presupposed that there is an absolute time in which two events either occur simultaneously or have a time interval that is independent of the way they are measured. However, according to Einstein’s special theory of relativity, time and space are only strictly defined when relative to a frame of reference. Since nature has no recognisable reference system, it does not make sense to speak of absolute time.

Subjective time or the experience or consciousness of time is the subject of psychology, since the speed of the experienced passage of time can vary considerably. It depends on both the importance of the event and the emotional state of the person experiencing it. “Fulfilled” stretches of time with many events within a certain period of time appear shorter than “empty” stretches of time with few or no events (boredom). With increasing age, the subjective experience of time also shortens.

The time threshold refers to the amount of time that allows the smallest periods of time or the differentiation of time stretches to be registered. The absolute time threshold is the amount of time that must elapse between two events for them to be detectable separately. It also refers to the amount of time that an event must last in order to create the impression of an expansion of time. The relative time threshold refers to the amount of time by which two objective time distances must differ so that humans can also perceive them as different (about 1 second).



The calendar is an attempt to record the astronomically based division of time. The first problem is the fact that both solar and lunar years have to be taken into account. Since the lunar year, consisting of 12 lunar revolutions, is 11 days shorter than the solar year, the leap year is used to compensate for this to some extent (Julian calendar 46 BC). Since the beginning of spring was determined to be March 21 at the Council of Nicaea (325) and the Julian year was 0.0078 days too long, obvious differences arose which were resolved through the introduction of the Gregorian calendar by Pope Gregory XIII in 1582. The business and financial world uses this calendar, although there are also Jewish, Muslim and Chinese calendars, all based on the lunar cycle.


Current Situation

The complacency of the financial markets is irritating. Of course, the recovery after the sharp correction in Q1 2020 is to be welcomed, but there are fewer and fewer reasons for a longer-term continuation. A foreseeable vaccination against Corona is making headlines, but hardly changes the lack of positive fundamental factors. A new president in the USA will certainly make international dialogue more civilised, but no major changes in “America first” are to be expected. Europe still faces a Brexit and the difficulties with Poland and Hungary.

Financial repression is far from over. On the contrary, the central banks have confirmed their “zero interest rate policy” for the foreseeable future, as well as their willingness to buy bonds of almost any kind. The result is a bond market whose creditworthiness gives pause for thought, not to speak of a possible violation of prohibited public financing. All this at a time when global government debt has reached staggering levels.

The equity markets have been benefiting from TINA (There Is No Alternative) for some time, but the current price/earnings ratio (P/E) for the MSCI World is already over 30x, some 50% higher than at the beginning of this year. Adjusting earnings for share buybacks and questionable goodwill, this figure is significantly higher. Furthermore, the common indices benefit from a small number of stocks such as technology (S&P 500) or pharmaceuticals and food (SMI).


This post was automatically translated.

Christian Wagner
Financial Advisor