Within the first 9 months of 2025, the Worth & Alternative portfolio gained +6,6% (together with dividends, no taxes) towards a achieve of +16,7% for the Benchmark (Eurostoxx50 (25%), EuroStoxx small 200 (25%), DAX (30%), MDAX (20%), all TR indices).
Hyperlinks to earlier Efficiency critiques might be discovered on the Efficiency Web page of the weblog.
Efficiency evaluate:
After two comparatively good monhts in June and July, August and Septmeber as soon as once more had been underperforming months and I’m now 100% positive that this would be the third underperforming yr in a row.
Once more, some shares did actually badly (Fuchs, STEF, AOC Fund) whereas the winners weren’t successful sufficient to match benchmark efficiency.
As talked about earlier than, the great factor is that I don’t need to care about sad exterior traders and/or paying subscribers. As I’ve indicated within the final evaluate, I’ve been adjusting my strategy and enhancing my funding “infrastructure” however it could be silly to count on a brief time period rebound in relative efficiency within the present market setting. For subsequent yr, I’m at the moment considerung to change to 6M Efficiency reporting.
Transactions Q3:
The primary transaction was that I offered Fuchs (with an total revenue of 6%) and purchased and offered Novo Nordisk with a ~11% achieve. Fuchs stays on my watchlist however is clearly uncovered to sectors which can be at the moment not doing so nicely.
Common holding interval is 3,5 years, Money is at ~13,7% (vs. 4% at yr finish 2024).
Remark: Maintain ready for that European Financial rebound
2025 is now the third yr in a row, when the a lot anticipated “second half financial rebound” in Germany & Europe will very doubtless not occur. Considered one of my greatest funding errors prior to now 3 years was clearly that I had too many bets that had been kind of instantly relying on such a rebound and a few sort of imply reversion. I’ve trimmed most of those positions to a sure extent however not all. And I’ve to confess that I’m nonetheless tmepted to placed on these sort of trades however I’ve principally resisted thus far.
The massive query in fact is: Will the Rebound lastly are available in 2026 and underneath what circumstances ?
After I would describe the present financial scenario in Germany & Europe one may do it with this image:
We’re at the moment principally left with the Unhealthy and Ugly and little or no of the Good.
Particularly in German politics, folks as at all times are on the lookout for “easy” options. Impressed by MAGA and Trump, a few of these simple options proposed are as an illustration to cease all Renewable Vitality efforts and return to “low-cost” fossil fuels (and/or Nuclear). One other “simple repair” can be that cancelling the dedication to section out ICE engines which might magically remedy all issues of the all necessary German Automotive trade.
Possibly, however solely mabye such adjustments may create a brief time period bump in confidence in some sectors however for my part the problems are deeper and rather more structural and Energey as usch just isn’t the important thing driver.
Trying a number of years again, 2019 was already a really troublesome yr and Germany/Europe had been heading right into a recession regardless of (or beacause of) extremely low rates of interest which have stored the evonomy one way or the other afloat. This was solely held up by COVID which result in a brief shock after which to a low rate of interest, excessive Authorities induced spending increase that lasted 1-2 years..
The pure choice means of bankrupting weak firms had been intentionally switched off with a view to keep away from a complete soften down after which solely slowly reinstated.
Europe and particularly Germany’s enterprise mannequin regarded for a very long time as follows:
- import low-cost fossil gasoline and uncooked materials principally from Russia
- Effectively manufacture vitality intensive Chemical/metallic merchandise in huge clusters
- Export into the world specializing in automobiles and manufacturing unit gear
- Use the online proceeds to principally put them into financial institution accounts
- Largely Ignore no matter occurs in Software program and plenty of new applied sciences
This enterprise mannequin has been now attacked from a number of sides. That is as an illustration the record of the most important buying and selling companions in 2016, sorted by exports from Germany’s perspective in 2015:
Among the many massive 5 buying and selling companions, now we have the US, which has simply declared a tarif conflict towards Europe, France which has its personal issues, UK which has since then exited the EU and China, which now in lots of areas is a minimum of an equqal competitor and even worse, partially thanks resulting from “us serving to them to construct probably the most trendy prodcution services.
As well as, a budget vitality and uncooked materials imports from Russia are not any extra. One other instance: In 2018, greater than 50% of the Pure Fuel was imported from Russia and Russia was additionally a Prime 15 Export market.
I’m not positive what number of of my readers suppose that it could be a good suggestion to reastablish the Fuel pipelines to Russia underneath the present Russian management, however I don’t suppose it’s a good suggestion.
Lastly, the lengthy stretch of extremely low rates of interest which primarily supported the development and actual property trade for a very long time, are over. In 2018, development accounted for round 10% of GDP in Germany, in 2024 it fell to five%.
The European inventory market had reacted partially very positievely totally on the announcement of a lot elevated speanding from Germany on Protection and Infrastructure, however thus far little or no tangibel stuff has occurred.
So what’s the upside ?
- Critical reforms
- Considerably decrease rates of interest
- German spending kicks in an creates a (quick time period) upswing
- Peace in Ukraine and large rebuilding effort
- Attracting extra gloabel tech expertise resulting from US hostility towards immigrants
Quick time period, critical reforms are fairly unlikely wherever one seems. The most definitely tailwind for my part might be that spending kicks in and along with decrease rates of interest ignites some sort of bounce again.
If politicians can be good, they’d attempt to mobilise non-public capital with tax breaks to construct housing, as lack of housing is clearly a difficulty in most of Germany’s bigger cities however I’m not positive if this occurs.
However make no mistake: In my view, the standard, vitality intensive, metal based mostly export mannequin of Germany is completely damaged. We will be unable to compete towards the Chinese language and the US won’t permit imports to rise considerably.
Subsequently I believe it is extremely necessary to keep away from long term investments into firms that depend on the previous mannequin. The most important mistake one could make is to guess on mid- or long run imply reversion of companies which can be absolutely uncovered to the “previous German/European” enterprise mannequin.
The massive query clearly is: What sort of enterprise fashions can create long run worth underneath a such a long run structural shift ? I’m not positive however we’ll discover out.
There may be the well-known saying that you’ve reached the center of the tunnel when it’s the darkest. So perhaps we see a broader rebound of the economic system in Germany and Europe in 2026, however I cannot improve my bets on that proper now. If we don’t see that rebound as soon as once more, then 2026 won’t be an excellent yr for inventory traders.