Within the first 3 months of 2025, the Worth & Alternative portfolio gained +0,9% (together with dividends, no taxes) towards a acquire of +7,2% for the Benchmark (Eurostoxx50 (25%), EuroStoxx small 200 (25%), DAX (30%), MDAX (20%), all TR indices).
Hyperlinks to earlier Efficiency opinions will be discovered on the Efficiency Web page of the weblog.
Efficiency evaluate:
After 2023 and 2024, 2025 as soon as once more seems like a 12 months the place will probably be exhausting to compete with my benchmark. That is how the person components of the benchmark carried out in Q1:
Eurostoxx 50: +7,6%
DAX: +11,2%
Eurostoxx small: +3,1%
MDAX: +7,1%
Once more, European small caps have been the weakest subsector un my benchmark and enormous caps, particularly German giant caps did nicely in Q1, largely due to the announcement of a 1 billion/trillion infrastructure/protection spending program.
Sadly, I had (too) little publicity to those “scorching sectors”. In distinction, particularly my French small caps continued to undergo declines alongside a number of different shares. There have been a number of winners (EVS, Jensen) however not sufficient to counterbalance the losers like STEF or Amadeus Hearth (which I offered). Additionally my two purchases (Robertet, Bombardier) didn’t too nicely.
Nevertheless with the market carnage in the previous few days, it may not make that a lot sense to elaborate an excessive amount of on Q1, however as soon as once more, 2025 will likely be a 12 months the place beating the benchmark with my strategy seems very troublesome.
Transactions Q1:
The present portfolio will be seen as at all times on the Portfolio web page.
In Q1, I offered Amadeus Hearth, Energiekontor, Sto and partially Hermle. In all circumstances, my funding thesis turned out to be incorrect. As new positions, I added a 2% place Robertet and a sub 1% place in Bombardier.
Common holding is 3,5 years, Money is at ~11% (vs. 4% at 12 months finish).
Remark: Negotiation Ways & Achilles’ Heel
No worries—I’d write a brand new “panic” submit quickly. However this time, I need to give attention to one particular facet of the previous few days: negotiation techniques as we will at present watch actual time in Trump’s tariff conflict.
The American Method
The U.S. seems to be negotiating from a (perceived) place of overwhelming energy. The strategy can greatest be described as bullying—particularly in the case of tariffs. The Trump Administration has acknowledged that it’ll retaliate towards any counter-tariffs by rising its personal even additional.
We’ve already seen numerous responses from “opponents” (aka former buying and selling companions):
- Vietnam appears to have supplied to decrease all tariffs on U.S. items to zero,
- China retaliated and even escalated its rhetoric over the weekend. As I used to be writing, China and the U.S. had reached tariff ranges of 145% vs. 125%.
- Switzerland, which had already diminished its tariffs on U.S. merchandise to zero, doesn’t actually know tips on how to reply.
- The European Union has supplied decrease traiffs if the US lowers tariffs, too, however stated it will retaliate if no settlement is being made
- And I’m not even speaking in regards to the penguins of Heard Island and McDonald Islands, who by some means received slapped with a ten% tariff too.
Two Large Questions:
- Is “bullying from a place of energy” an excellent technique?
- What’s the greatest counter-strategy for these on the receiving finish?
On 1):
Most educational analysis exhibits that if you happen to’re aiming for a long-term, secure relationship, a collaborative technique yields the perfect outcomes. Which means specializing in shared objectives and dealing inside every social gathering’s constraints and preferences.
The Trump Administration is utilizing what’s known as a aggressive technique—making an attempt to get the utmost profit from the present negotiation with no concern for long-term relationships. Within the case of tariffs, it’s already clear {that a} draw back will likely be that many exterior the U.S. might intentionally keep away from U.S. merchandise, even when they’re cheaper. So reasonably than boosting exports, the U.S. may find yourself reaching the other. There’s additionally the chance of full-blown escalation.
My impression is that the actual goal behind the tariffs is to lift income to fund even bigger earnings tax breaks, as promised to voters. So anybody anticipating the tariffs to vanish after minor concessions may be in for a impolite awakening. Actually, Trump’s fashion may even be known as adversarial, the place the objective is to make the opposite aspect worse off than earlier than.
Replace: Whereas scripting this, Trump “paused” the tariffs for many nations—besides China, Mexico, and Canada—for 90 days.
On 2):
How ought to different nations react? Will China or Vietnam come out forward?
Once more, educational analysis means that neither nation behaved optimally.
The very best response is usually to not react too rapidly, as that may set off additional escalation. A measured strategy, the place all choices and negotiation dimensions are fastidiously analyzed, normally results in higher outcomes. In fact, this may be politically troublesome—voters anticipate quick responses—however persistence might yield much better outcomes.
On this context, it may be good for U.S. buying and selling companions to staff up with American corporations (like Nike) which can be apparent losers of the tariffs. Or, if European corporations have been planning U.S. investments anyway, they might bundle initiatives and current them as an enormous negotiation package deal.
To date, we’ve seen that the U.S.–China change escalated rapidly, whereas Vietnam’s early give up didn’t yield any advantages—although Trump clearly loved the “ass kissing.”
In any case, this stays a fluid scenario. However one factor appears sure: America’s popularity as a dependable buying and selling accomplice has suffered within the medium to long run, no matter what occurs within the coming days and weeks.
Achilles’ Heel
Human historical past is stuffed with superhuman heroes who appeared undefeatable—till their one deadly weak point was uncovered.
Essentially the most well-known instance is Achilles, who was dipped into the River Styx by his mom to realize immortality—however she held him by the heel, which remained susceptible.
Equally, the Germanic hero Siegfried bathed in dragon blood for invincibility, however a single leaf coated a spot on his again—by means of which he was later killed.
Why am I mentioning this? As a result of the U.S. underneath Trump is performing like an unstoppable superhero, attacking buddy and foe alike.
However final week already revealed an Achilles’ heel: the U.S. is extra depending on monetary markets than nearly another nation. A 15–20% inventory market drop pressured the Trump Administration to “pause” the tariffs. And this might not be the one weak point.
For instance:
- ~70% of worldwide copper is produced in China.
- ~80% of all uncommon earth minerals are mined and refined in China.
- A U.S. F-35 fighter jet requires 920 kilos (~450 kg) of uncommon earths per unit.
So if commerce with China stops, fighter jet manufacturing may also cease—not less than till various sources are developed and scaled.
Conclusion
For my part, the U.S. might obtain much better outcomes if it didn’t attempt to punch everybody within the face directly. There are actual structural points within the international financial system that have to be addressed. My house nation, Germany, is just too depending on exports, which doesn’t result in an optimum final result for its residents. So there could be clearly a standard objective to make things better in a extra sutainable manner.
However the present U.S. negotiation technique will most certainly expose even extra weaknesses in America’s place, with doubtlessly extreme long-term penalties. My feeling is that this commerce conflict gained’t have many winners—and that irreversible injury might have already got been executed.