Within the first 3 months of 2025, the Worth & Alternative portfolio gained +0,9% (together with dividends, no taxes) towards a achieve of +7,2% for the Benchmark (Eurostoxx50 (25%), EuroStoxx small 200 (25%), DAX (30%), MDAX (20%), all TR indices).
Hyperlinks to earlier Efficiency opinions might be discovered on the Efficiency Web page of the weblog.
Efficiency evaluate:
After 2023 and 2024, 2025 as soon as once more seems to be like a 12 months the place will probably be arduous to compete with my benchmark. That is how the person elements 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 had been the weakest subsector un my benchmark and huge caps, particularly German giant caps did properly in Q1, principally 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 couple of different shares. There have been a couple of winners (EVS, Jensen) however not sufficient to counterbalance the losers like STEF or Amadeus Fireplace (which I offered). Additionally my two purchases (Robertet, Bombardier) didn’t too properly.
Nonetheless with the market carnage in the previous couple of days, it may not make that a lot sense to elaborate an excessive amount of on Q1, however as soon as once more, 2025 shall be a 12 months the place beating the benchmark with my method seems to be very tough.
Transactions Q1:
The present portfolio might be seen as at all times on the Portfolio web page.
In Q1, I offered Amadeus Fireplace, Energiekontor, Sto and partially Hermle. In all circumstances, my funding thesis turned out to be improper. 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 Techniques & Achilles’ Heel
No worries—I would write a brand new “panic” publish quickly. However this time, I need to deal with one particular facet of the previous few days: negotiation techniques as we are able to presently 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 method can finest be described as bullying—particularly relating to tariffs. The Trump Administration has said that it’ll retaliate towards any counter-tariffs by growing its personal even additional.
We’ve already seen varied 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 learn how to reply.
- The European Union has supplied decrease traiffs if the US lowers tariffs, too, however stated it might retaliate if no settlement is being made
- And I’m not even speaking concerning the penguins of Heard Island and McDonald Islands, who by some means received slapped with a ten% tariff too.
Two Massive Questions:
- Is “bullying from a place of energy” a very good technique?
- What’s the finest counter-strategy for these on the receiving finish?
On 1):
Most tutorial analysis reveals that should you’re aiming for a long-term, secure relationship, a collaborative technique yields the most effective outcomes. Which means specializing in shared targets and dealing inside every get together’s constraints and preferences.
The Trump Administration is utilizing what’s known as a aggressive technique—attempting 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 shall be that many outdoors the U.S. might intentionally keep away from U.S. merchandise, even when they’re cheaper. So moderately than boosting exports, the U.S. may find yourself attaining the other. There’s additionally the chance of full-blown escalation.
My impression is that the true purpose behind the tariffs is to boost income to fund even bigger earnings tax breaks, as promised to voters. So anybody anticipating the tariffs to vanish after minor concessions is likely to be in for a impolite awakening. Actually, Trump’s fashion may even be known as adversarial, the place the aim 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, tutorial analysis means that neither nation behaved optimally.
The most effective response is usually to not react too rapidly, as that may set off additional escalation. A measured method, the place all choices and negotiation dimensions are fastidiously analyzed, often results in higher outcomes. In fact, this may be politically tough—voters count on quick responses—however endurance might yield much better outcomes.
On this context, it is likely to be sensible for U.S. buying and selling companions to staff up with American firms (like Nike) which can be apparent losers of the tariffs. Or, if European firms had been planning U.S. investments anyway, they might bundle initiatives and current them as an enormous negotiation bundle.
Thus far, we’ve seen that the U.S.–China alternate 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 state of affairs. However one factor appears sure: America’s fame as a dependable buying and selling companion has suffered within the medium to long run, no matter what occurs within the coming days and weeks.
Achilles’ Heel
Human historical past is filled with superhuman heroes who appeared undefeatable—till their one deadly weak spot was uncovered.
Probably 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 weak.
Equally, the Germanic hero Siegfried bathed in dragon blood for invincibility, however a single leaf lined a spot on his again—by way of which he was later killed.
Why am I mentioning this? As a result of the U.S. beneath Trump is appearing like an unstoppable superhero, attacking good friend and foe alike.
However final week already revealed an Achilles’ heel: the U.S. is extra depending on monetary markets than nearly every other nation. A 15–20% inventory market drop compelled the Trump Administration to “pause” the tariffs. And this might not be the one weak spot.
For instance:
- ~70% of world 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 will even cease—not less than till various sources are developed and scaled.
Conclusion
In my view, 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 residence nation, Germany, is just too depending on exports, which doesn’t result in an optimum consequence for its residents. So there could be clearly a standard aim to sort things in a extra sutainable approach.
However the present U.S. negotiation technique will almost definitely 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 harm might have already got been achieved.
