Otte in 2016
October 7, 1964
Plettenberg, North Rhine-Westphalia, Germany
|Occupation||Economist, book author, fund manager, conservative political activist|
|Organization||Institut für Vermögensentwicklung (IFVE)|
|Political party||Christian Democratic Union of Germany (CDU)|
Max Otte (born Matthias Otte; * Oct. 7, 1964 in Plettenberg, Germany) is a German-American economist, book author, fund manager, and conservative political activist. Otte is a member of the German Christian Democrats (CDU). From June 2018 to January 2021, he was the chairperson of the advisory board of the Desiderius Erasmus Foundation. He obtained his Ph.D. from Princeton University. Max Otte the founding sponsor of the Human Roots Award.
Max Otte obtained his Abitur (university entrance qualification) at Albert-Schweitzer-Gymnasium Plettenberg in 1983.
After having received a doctorate degree from Princeton University in 1997, with his thesis later published as "A Rising Middle Power - German Foreign Policy in Transformation" by St. Martin´s Press, and having worked as an M&A consultant, Otte was Assistant Professor at Boston University from 1998 to 2000. 2001, he became Professor for International Business Administration at the University of Applied Sciences, Worms.
In 2008, after the financial crisis, Otte became widely known because his book Der Crash kommt, first published in 2006, had predicted a large-scale financial crisis caused by U.S.-subprime. As a result, he has been known as the "guru" of the crisis after the outbreak of the financial crisis in 2007.
Max Otte was one of the first economists to recommend nationalizing Hypo Real Estate (a German bank), long before politicians. In March and April 2009 he strongly recommended the purchase of stocks. Otte is sometimes called the "crash prophet" – a title he dislikes. In November 2009, he was voted "Money Manager of the Year" by the readers of the stock market journal Börse Online, winning 10,000 votes from a total of 24,000. In the same month, he confirmed that the value of (European) stocks were not yet too expensive. He defended his title as "Money Manager of the Year" in 2010 and obtained more than half of the votes, competing against 10 other money managers.
The PI Global Value Fund (WKN: A0NE9G), founded mid-March 2008 and managed to date by Otte, achieved a 38% performance by 28 April 2010, outperforming the DAX by 38 percent, the MSCI World by 33 percent and the Euro Stoxx 50 by more than 60%. Otte invests according to the "Reinheitsgebot" (German purity requirements) in quality stocks, bonds and physical gold.
In April 2010 Otte called for the Southern European countries to leave the eurozone. Otte, despite being an independent fund manager, is in favor of strong regulation of financial markets. In his opinion, sufficient equity capital should strengthen liability and constitute the basis for a return to sensible behaviour of banks in a market economy. He supported the German government's decision in 2010 to prohibit naked short selling.
Otte has published articles in newspapers such as the Frankfurter Allgemeine Zeitung, Die Welt, Der Spiegel, Financial Times Deutschland, The Times, Harvard Business Review and Wirtschaftsdienst and has appeared on television, with broadcasters such as ARD, ZDF, SWR, n-TV, Bloomberg and N24.
Max Otte has dual German and American citizenship and lives in Cologne.
On May 5, 2018, Otte was the organizer of the New Hambach Festival. The event was attended by around 1,200 visitors and various speakers from the right-wing populist camp, including Jörg Meuthen, Thilo Sarrazin and Vera Lengsfeld, who wanted to continue the tradition of the Hambach Festival of 1832.
Even before the event, Melanie Amann pointed out in Der Spiegel a method "in the right-wing milieu" of claiming historical dates and places for oneself and drawing one's own "actions as a logical continuation of the work of heroic role models." Otte denied to the magazine that this was an AfD event. However, he said, the "AfD is also the only party that openly addresses the basic problem of this country. Namely, "we are witnessing the dismantling of everything we can be proud of."
The event was held again in 2019 and 2020.
Otte has been a member of the CDU since 1991. In spring 2017, Otte became a member of the Values Union.
In 2006, Otte was a founding member of the Center for Value Investing as well as its director and supervisory board. He is also a member of Atlantik-Brücke, the German Council on Foreign Relations, the American Council on Germany, the German-American Business Club, and the German Society for Applied Typology. In 2009, Otte became a member of the Prussian Society Berlin-Brandenburg, where he has served on the advisory board since 2010. He has been a member of the German Language Association since 2012.
Otte received the Mont Pelerin Society Award for his 1988 essay "Toward an Open World Order". This society was founded in 1947 by Friedrich August von Hayek as an association of academics, businessmen and journalists.
Otte is the initiator of the Human Roots Award and donor of the prize money. It is an international archaeology prize that was awarded for the first time in 2017.
In his book A Rising Middle Power? (New York, 2000) Max Otte examines German foreign policy in recent years. He focuses in particular on whether the increase in power following the reunification has led to a shift in the style of the Federal Republic of Germany's foreign policy. Alongside a political economic analysis of the power potential of the Federal Republic of Germany, the book contains three case studies: Germany and European unification/introduction of the Euro, Germany and military interventions abroad and the eastward enlargement of the EU. Ottes surprising conclusion is that, whilst Germany's power has grown, the demands on the reunified country have grown even more strongly. Germany diplomacy continues to be typical of a middle power, aiming at reconciliation.
In his book Investieren statt Sparen Otte describes how private investors can achieve long-term wealth creation. It is in the interest of the investor to carry out his financial planning personally, and not have it performed by a third party. Investment is the most important component of long-term wealth creation, although personal responsibility, transparency and availability of reliable financial information as well as patience for the investment horizon are also essential. Sound investments also involve taking calculable risks. In addition, Otte describes the advantage internet offers for carrying out online bank transactions, automatically placing orders, as well as facilitating communication and exchange of information between investors. The effect of doubling private assets is based on the principle of compound interest and the possibility of earning an approx. average annual return of 8-10%, for example on the DAX. The financial objectives are determined by disposable net income, the return on investment, the investment period and the age of the investor. The investment amount is defined as savings minus consumption. The highest yields can be obtained from investment in stocks. The ownership of stocks makes the investor co-owner of a company, enabling him to benefit from the economic success of the company's goods and services. Successful long-term investments by private investors have largely resulted from investment in strong brands and quality organizations such as Coca-Cola, McDonald's, Sony, Nestlé, Procter & Gamble, IBM, etc., which have been established on the market for a long period of time.
The value of stocks is based on the present and future earnings of the organization. Otte divides stocks into several categories: "Meisteraktien" ("master stocks": internationally renowned companies with global brands such as DaimlerChrysler, Coca-Cola, Siemens), "Kaufleuteaktien" ("trader stocks": large corporations that are currently undervalued with a low price / earnings ratio; high earnings in spite of low market value), "Königsaktien" ("king stocks": the world's best mature large corporations and industry leaders that grow less quickly than revolutionary stocks), "Revolutionärsaktien" ("revolutionary stocks": young growing companies with revolutionary, innovative ideas such as Google, Microsoft, Cisco Systems, etc.) and "Valueaktien" (blue chips).
After the publication of his book Der Crash kommt., Max Otte became more widely known. The book begins with the preface from the first edition in 2006:
I can't tell you whether the crash will come in 2008. Perhaps it will come already in 2007, or even later in 2009 or 2010. Human behavior – for that is what the outbreak of a major global economic crisis is about - cannot be predicted with mathematic precision, even if some "crisis prophets" will always try to do so. Some of the strongest indications seem to point to the year 2010, others to the end of 2007. However, if I have correctly understood the signals coming from the world economy, then it will have to crash – and with an enormous impact.— Max Otte
Otte sees himself as a political economist in the tradition of Friedrich List, Karl Marx, Max Weber, Werner Sombart, Alexander Rüstow and Wilhelm Röpke, and is inspired by the Austrian school of economic thought.[clarification needed]
Otte accurately forecast that the U.S. property market and subprime securities would spark the crisis. He believes that there are several causes of the crisis:
Moreover, Otte emphasizes that financial crises are not unusual in capitalism, however the majority of economists are reluctant to analyse them. In the last two chapters of the book Otte gives investment tips.