German Investor Dumps U.S. and U.S.-Dependent Auto Investments
September 18, 2007

Jens Ehrhardt, manager of Germany's best-performing major international stock fund, drives a yellow Porsche convertible but he won’t buy the stock of Porsche and is reducing his stake in BMW, reports Bloomberg News.

Why? The automakers are too dependent on debt-ridden Americans. About a third of Porsche sales come from the U.S. and about a quarter of BMW’s sales are from the U.S.

Ehrhardt, who oversees the $12-billion Munich-based Dr. Jens Ehrhardt Kapital AG, told Bloomberg News he is shunning all U.S. and U.S.-dependent investments, including those in auto-related ones because American debt is too high at $9 trillion -- double what it was 10 years ago, according to the U.S. Treasury Department. As Bloomberg points out, that’s more than the national debt of Japan, Germany and Italy combined.

"The consumer credit bubble will weigh on the U.S. for the next five years, as it's a consumer-driven economy,'' Ehrhardt told the wire service. "Indebtedness has reached the limit.''

In addition to Porsche and BMW, Ehrhardt cut is stake in Germany’s giant steelmaker Thyssen Krupp AG when it chose the U.S. -– Alabama –- for its new $4.2 billion steel plant.

So what companies does he like? Volkswagen is among his favorite picks. Ehrhardt favors German companies, like Volkswagen, poised to capitalize on growth in Eastern Europe and other companies set to exploit China’s growth.

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