2024 overview
There isn’t any approach round it: 2024 was a in absolute phrases AND relative phrases actually unhealthy. The Worth & Alternative portfolio misplaced -2,5 % (together with dividends, no taxes, AOC fund as of 30.09.2023) towards +4,9% for the Benchmark (Eurostoxx50 (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%), all efficiency indices together with Dividends). Hyperlinks to earlier Efficiency opinions could be discovered on the Efficiency Web page of the weblog.
Another funds that I observe have carried out as follows in 2024:
Companions Fund TGV: 4,8%
Profitlich/Schmidlin: +9,0%
Over the 14 years from 12/31/2010 to 12/31/2024, the portfolio gained +387% towards +168% for the Benchmark (earlier than taxes). In CAGR numbers this interprets into 12% p.a. for the portfolio vs. 7,3% p.a. for the Benchmark.
As a graph this appears as follows:
Present portfolio / Portfolio transactions & New positions:
In 2024, portfolio exercise was medium busy as already talked about within the “23 (+1) shares for 2025” Submit.
New positions had been: Hermle, Amadeus Hearth, Eurokai, EVS, STEF and Fuchs plus one undisclosed one.
Offered positions: In 2024, I offered Photo voltaic Group, DEME, Admiral and ABO Vitality. Logistec was taken out as a result of a purchase out. . The one momentary member was Ocean Wilsons (Particular Sit). The present portfolio per 31.12.2024 could be seen as at all times on the portfolio web page.
Some Portfolio statistics
The weighted holding interval as of 31.12.2024 has been 3,8 years and is inside my goal of 3-5 years. It declined barely primarily due to the sale of Admiral. The 10 largest positions account for round 52% (52%) of the portfolio, the largest 20 for round 91% (86%).
“Lively share” vs “do nothing”
The “Do nothing” strategy, i.e. simply letting the Portfolio run from 31.12.2023 and acquire dividends would have resulted in a efficiency of -1,7%, so my “energetic contribution” in 2024 was a damaging -0,8%. Among the gross sales had been timed properly (Admiral, DEME, Photo voltaic), however I invested in dropping shares like Hermle and Amadeus Hearth.
Month-to-month returns 2024
In relative phrases, the primary half of 2024 was comparatively consistent with the benchmark.
The relative underperformance occurred from August to November after the portfolio reached an ATH in July. Apart from the yr earlier than, I had no large winners like Schaffner or Logistec and so the underperformance persevered till yr finish.
Annual returns 2011-2024
2024 was now the third yr in 14 years wherein I underperformed the benchmark (and the second in a row) and the fourth with a damaging return. Once more, this was pushed by the numerous underperformce of small caps particularly in France and Germany as talked about above. My benchmark consists out of fifty% German/European Giant caps, in distinction, my solely massive cap is ACT with a 5% weight and even that inventory had a flat efficiency in 2024.
If I would wish to promote my technique to buyers, I’d argue that the final time after I underperformed so badly, the following yr was unbelievable, however truthfully, I don’t know what occurs in 2025.
Errors made in 2024
As at all times, I made a variety of errors, largely not pulling the set off on some high quality shares I had been watching (Video games Workshop, Goodwin) and as a substitute shopping for “cheaper” cyclical ones with the hope of a 2024 restoration (Hermle, Amadeus Hearth). Though I spotted that I used to be fallacious with my timing, I didn’t cut back the effected shares sufficient (solely small reductions of Hermle & Amadeus Hearth)
General, I clearly didn’t focus sufficient on diviersifying the underlying enterprise publicity sufficient and subsequently ended up holding the bag of an excessive amount of publicity to cyclical German and French shares.
What went properly in 2024
This part is brief. I believe I elevated to high quality of the portfolio to a ceertain extent however with out a lot too present for efficiency. I additionally managed to assessment a number of the current positions (Sixt, Admiral) which is usually a wrestle as lokoing at new shares is at all times “extra attractive”. I additionally labored on my “funding infrastructure” like creating a core structured watchlist strategy.
Classes realized 2024
The most important lesson was clearly that betting on a “macro turn-around” in 2024 for “core Europe” was a foul concept. I mustn’t do that once more and concentrate on firms that do properly in any state of affairs.
One other leasson that I realized is clearly that my underlying technique, which isn’t to explicitly search for winners however to largely keep away from losers, doesn’t work properly in a market the place the returns are pushed by a couple of shares. Within the subsequent weeks I’ll subsequently assessment the technique together with the benchmark extra completely.
Remark “Extrapolate the previous at your individual threat”
As talked about earlier than, I really began investing as a youngster within the second half of the Nineteen Eighties (Sure, I’m that previous). Moreover beginning to make investments or somewhat amateurish speculate within the inventory market, I devoured each books that in some way needed to do with the then extremely popular “Cyberpunk” theme. I particularly favored the “Shadowrun” collection.
The Shadowrun books had been a fairly crude and and dystopian (however enjoyable) combination of Fantasy and “tech fiction” with one fascinating facet: Within the Shadowrun universe, the interval the place a lot of the tales performed (2050 or so) was dominated by a couple of large Tech conglomerates, which funnily largely had Japanese names. Why was that the case ? I suppose it was most certainly a mirrored image of the dominating “story” within the late Nineteen Eighties and early Nineties that Japan and Japanese firms are unstoppable and can dominate the world endlessly. And simply to be clear: These books had been written largely by American authors.
Again than, firms like Sony, and so forth. had been taking on every little thing that needed to do with electronics and Japanese firms went on a shopping for spree fueled by their ever rising inventory and actual property markets.
In fact everyone knows how that story ended, however again then most individuals simply extrapolated the previous years into the long run. I only in the near past learn the very fascinating biography of Masa Son, “Playing Man”, which covers that period and the way apparent on reflection it was that this increase would finish in some unspecified time in the future. However again then it wasn’t apparent in any respect.
Previously 20 years we’ve seen two related tales enjoying out: The primary one is the Chinese language story. Fairly just like Japan, China appeared unstoppable till very lately. Now it has turn into fairly apparent that the financial mannequin of China from the previous, counting on large infrastructure and actual eastate funding has run out of steam. How that is going to finish, nobody is aware of, however the “Japanese Situation” is turning into an increasing number of probably.
The second story, which continues to be going robust, is the “American Exceptionalism” story, now embodied largely through the “Magnificient 7” (or 8) shares which have been driving returns previously two years. At any time when I focus on investments nowadays, the primary query is at all times: Why don’t you simply make investments into US shares ? Many buyers nowadays simply extrapolate the previous and as soon as once more consider that “this time it’s completely different” and the American inventory market on the whole and these shares specifically are as soon as once more unstoppable endlessly.
If one thing like Shadowrun would emerge nowadays, I’m fairly certain that the Megacorps of the long run can be named based mostly on Amazon, Microsoft, Google or Meta.
Though historical past doesn’t repeat itself, it at all times rhymes. So additionally on this case , in some unspecified time in the future in time, cyclicality will kick in and people unstoppable giants will instantly look way more weak. To be clear: I don’t know when this wil lbe the case. This yr ? Subsequent yr or in 3 years time ? However on reflection, it is going to look a lot clearer what may have brought on this and why as soon as once more, simply extrapolating the previous into the distant future is rarely a good suggestion.
However what about generative/agentic AI ? Who is aware of. Perhaps as soon as once more, Microsoft & Co handle to seize a lot of the financial upside, perhaps not. 3 years in the past it was the Metaverse, perhaps in 3 years time it’s one thing else. In the intervening time, just one factor is evident: Their enterprise has turn into way more capital intensive and the one firm which is de facto incomes cash right here is Nvidia and semiconductors have at all times been cyclical.
Perhaps it seems that Tibetian monks are greatest outfitted to coach the final word AGI ? I’m personally very sceptic that the Magnificient 7 and American firms on the whole will at all times win in any state of affairs. However that’s to a sure extent priced into their shares. So be further cautious and don’t merely extrapolate the previous.
Bonus monitor: “Digital Madness”
