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 will be discovered on the Efficiency Web page of the weblog.
Efficiency assessment:
As talked about in Q1, in relative phrases 2025 turned out to be a tricky 12 months. Regardless of my conventional obese in European shares, I didn’t have sufficient publicity to performing sectors (Financials, Protection) however as an alternative an excessive amount of publicity to weak sectors like Oil/Power associated (ATD, DCC), Alcohol (TFF) or building (Thermador, Samse and so forth.). I additionally had no expsoure to takeovers or purchase outs.
The one constructive information is that June was a comparatively good month, in relative phrases the perfect month since December 2023 and the primary few days in July seemed fairly good as nicely.
For the report, that is the month-to-month improvement of the relative efficiency for 2025:
Transactions Q2:
The present portfolio will be seen as all the time on the Portfolio web page.
In Q2, I bought Royal Unibrew and the remainder of Hermle. Royal Unibrew has been a reasonably OK funding, returning round +40% over barely lower than 2,5 years. The primary motive 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 instances, 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 12 months finish).
Remark: Simply preserve going or mirror & adabt
As in lots of areas of life, if issues are working easily and efficiently, why must you change something ?
If a soccer workforce is profitable, the coach would possibly use the identical gamers and the identical tactic for each subsequent match.
However in fact, if issues don’t run so easily anymore, there may be all the time the query: Must you proceed to do the identical (and “hunker down) and hope for issues getting higher or must you make modifications ?
In Soccer, the reply is often: Make modifications shortly earlier than you get fired as a coach. Hunkering down as a coach often doesn’t work out very nicely for the person coach. As a facet comment: In soccer, if in any respect, firing coaches solely has quick time period constructive impact on common.
In investing nevertheless, it could make sense simply to proceed what you’ve gotten been doing as a result of the explanation for underperformance is perhaps solely short-term or cyclical. Chasing the newest developments or previous efficiency can really be fairly dangerous.
However, even in investing, it could be very advisable to vary or refine the strategy in an effort 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 strategy a second time by concentrating on full take-overs in comparison with minority positions.
With my portfolio now underperforming for the third 12 months 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 nicely managed, stable corporations with respectable prospects at reasonable valuations with a sure concentrate on small caps, continues to be legitimate in the long term.
Nonetheless, the way in which I execute the technique would possibly require just a few updates and upgrades as I recognized some recurring errors and weaknesses comparable to:
- having a too in depth 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 technique to mix Qualitative and quantitative points
I’ve no clear rule to resolve if I can buy one thing that appears very low cost however will not be so top quality vs. one thing that could be very top quality however not as low cost - not having a scientific technique to measure present positions in opposition to potential replacements
I don’t wish to substitute present positions every day however evaluating potential alternate options systematically frequently could be a worthwile train - promoting too early when shares carry out nicely
It is a recurring problem over the previous 15 years since I write this nlog. It has gotten a little bit higher however I’ve no systematic technique to resolve on this. - not shopping for if a inventory on the watchlist positive aspects momentum (usually ready for a less expensive worth too lengthy)
One way or the other I’ve this psychological bias that I want to purchase with a “low cost” in comparison with historic costs though that is clearly the incorrect perspective if for example the basics enhance considerably for a enterprise - Shopping for as an alternative underperforming shares solely to get stunned by worsening fundamentals
That is the flipside of the earlier submit. I usually purchase into falling inventory costs as a result of the inventory appears cheaper, solely to search out out that “Mr. Market” really had a degree. My “guess” on a restoration within the second half of 2024 was a prie instance for that. - cumbersome guide processes when screening corporations, particularly once I do my A-Z nation assessment This train has yielded some nice new investments, however the course of is admittedly annoying and the explanation why I’ve not began a brand new collection.
Subsequently I’m presently engaged on a few enhancements that I can cluster into 3 classes:
- Enhance the screening course of, particularly on the qualitative facet and mix it with the quantitative facet (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 guide analysis work
- Add Momentum as one issue into the choice course of as an alternative of utterly ignoring it
I’ll write extra about this within the coming weeks as most of that is “Work-in-progress”.
It clearly can be far too optimistic to imagine that these modifications will change the efficiency in a single day, however I’m very optimistic that it will enhance the chances of higher efficiency (vs. the outdated strategy) within the mid to long run. And it’s perhaps much more enjoyable.
Perhaps one remaining comment: I’ll intentionally NOT use AI for writing the weblog. Why ? As a result of I totally subscribe to this staement from legendary “VC Thinker” Paul Graham:
Keep protected and funky & benefit from the summer time (in case you reside within the Northern hemisphere).
