Within the first 6 months of 2025, the Worth & Alternative portfolio gained +5,8% (together with dividends, no taxes) in opposition to a acquire of +15,6% 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 overview:
As talked about in Q1, in relative phrases 2025 turned out to be a tricky yr. Regardless of my conventional chubby in European shares, I didn’t have sufficient publicity to performing sectors (Financials, Protection) however as a substitute an excessive amount of publicity to weak sectors like Oil/Vitality associated (ATD, DCC), Alcohol (TFF) or development (Thermador, Samse and so forth.). I additionally had no expsoure to takeovers or purchase outs.
The one optimistic information is that June was a comparatively good month, in relative phrases the most effective month since December 2023 and the primary few days in July seemed fairly good as effectively.
For the report, that is the month-to-month improvement of the relative efficiency for 2025:
Transactions Q2:
The present portfolio might be seen as all the time on the Portfolio web page.
In Q2, I offered Royal Unibrew and the remainder of Hermle. Royal Unibrew has been a fairly OK funding, returning round +40% over barely lower than 2,5 years. The primary cause for promoting the place is that I see restricted upside in comparison with different investments.
As new positions, I added a 3% place in Fraport and a but undisclosed a 1,8% in German Holdco GESCO. I added to Jensen to make it a full place and I additionally added to Bombardier and Eurokai. In all circumstances, the working enterprise developed higher than anticipated. Sadly I added not enought to Bombardier (solely from 1% to to 2%) trying on the latest information.
Common holding is 3,6 years, Money is at ~9,7% (vs. 4% at yr finish).
Remark: Simply maintain going or mirror & adabt
As in lots of areas of life, if issues are working easily and efficiently, why do you have to change something ?
If a soccer group is successful, the coach may use the identical gamers and the identical tactic for each subsequent match.
However after all, if issues don’t run so easily anymore, there’s all the time the query: Must you proceed to do the identical (and “hunker down) and hope for issues getting higher or do you have to make modifications ?
In Soccer, the reply is normally: Make modifications rapidly earlier than you get fired as a coach. Hunkering down as a coach normally doesn’t work out very effectively for the person coach. As a aspect comment: In soccer, if in any respect, firing coaches solely has quick time period optimistic impact on common.
In investing nevertheless, it may make sense simply to proceed what you’ve gotten been doing as a result of the rationale for underperformance is perhaps solely momentary or cyclical. Chasing the newest tendencies or previous efficiency can really be fairly dangerous.
Alternatively, even in investing, it may be very advisable to vary or refine the method with the intention to enhance outcomes. A well-known instance is Warren Buffett transferring from “Graham” shares to GARP shares after teaming up with Charlie Munger. He really ajdusted his method a second time by concentrating on full take-overs in comparison with minority positions.
With my portfolio now underperforming for the third yr in a row, I’ve been pondering for fairly a while if and what I ought to change.
My present assumption is that the general technique, which is to take a position primarily into effectively managed, strong corporations with respectable prospects at reasonable valuations with a sure give attention to small caps, continues to be legitimate in the long term.
Nevertheless, the way in which I execute the technique may require a couple of updates and upgrades as I recognized some recurring errors and weaknesses similar to:
- having a too intensive non-prioritized watchlist
Following my varied A-Z journeys, my watchlist has grown to a number of hundred shares which I’m not actually in a position to cowl - not having a scientific solution to mix Qualitative and quantitative facets
I’ve no clear rule to determine if I can buy one thing that appears very low-cost however is just not so top quality vs. one thing that could be very top quality however not as low-cost - not having a scientific solution to measure present positions in opposition to potential replacements
I don’t need to change present positions each day however evaluating potential alternate options systematically regularly may be a worthwile train - promoting too early when shares carry out effectively
It is a recurring difficulty over the previous 15 years since I write this nlog. It has gotten somewhat higher however I’ve no systematic solution to determine on this. - not shopping for if a inventory on the watchlist beneficial properties momentum (usually ready for a less expensive worth too lengthy)
In some way I’ve this psychological bias that I desire to purchase with a “low cost” in comparison with historic costs though that is clearly the improper perspective if as an example the basics enhance considerably for a enterprise - Shopping for as a substitute underperforming shares solely to get shocked by worsening fundamentals
That is the flipside of the earlier publish. I usually purchase into falling inventory costs as a result of the inventory seems cheaper, solely to seek out out that “Mr. Market” really had some extent. My “guess” on a restoration within the second half of 2024 was a prie instance for that. - cumbersome handbook processes when screening corporations, particularly after I do my A-Z nation overview This train has yielded some nice new investments, however the course of is actually annoying and the rationale why I’ve not began a brand new collection.
Subsequently I’m at the moment engaged on a few enhancements that I can cluster into 3 classes:
- Enhance the screening course of, particularly on the qualitative aspect and mix it with the quantitative aspect (valuation)
- Scale back my watchlist to a manageable quantity of corporations that I observe extra intently and prioritize them higher
- Measure present positions vs. Watchlist portfolio on a recurring foundation
- Make use of AI instruments to keep away from cumbersome handbook analysis work
- Add Momentum as one issue into the choice course of as a substitute of fully ignoring it
I’ll write extra about this within the coming weeks as most of that is “Work-in-progress”.
It clearly could be far too optimistic to imagine that these modifications will change the efficiency in a single day, however I’m very optimistic that this may improve the percentages of higher efficiency (vs. the outdated method) within the mid to long run. And it’s perhaps much more enjoyable.
Possibly one ultimate comment: I’ll intentionally NOT use AI for writing the weblog. Why ? As a result of I absolutely subscribe to this staement from legendary “VC Thinker” Paul Graham:
Keep secure and funky & benefit from the summer season (for those who dwell within the Northern hemisphere).