Within the first 3 months of 2025, the Worth & Alternative portfolio gained +0,9% (together with dividends, no taxes) in opposition to 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 could be discovered on the Efficiency Web page of the weblog.
Efficiency overview:
After 2023 and 2024, 2025 as soon as once more appears like a yr the place it is going to be arduous 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 huge caps, particularly German massive caps did effectively in Q1, principally due to the announcement of a 1 billion/trillion infrastructure/protection spending program.
Sadly, I had (too) little publicity to those “sizzling sectors”. In distinction, particularly my French small caps continued to endure declines alongside just a few different shares. There have been just a few 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 effectively.
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 shall be a yr the place beating the benchmark with my strategy appears very troublesome.
Transactions Q1:
The present portfolio could be seen as at all times on the Portfolio web page.
In Q1, I offered Amadeus Hearth, Energiekontor, Sto and partially Hermle. In all instances, my funding thesis turned out to be flawed. 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 yr finish).
Remark: Negotiation Ways & Achilles’ Heel
No worries—I would write a brand new “panic” publish quickly. However this time, I need to concentrate on one particular side of the previous few days: negotiation ways as we will at the moment watch actual time in Trump’s tariff conflict.
The American Strategy
The U.S. seems to be negotiating from a (perceived) place of overwhelming energy. The strategy can greatest be described as bullying—particularly relating to tariffs. The Trump Administration has acknowledged that it’ll retaliate in opposition to 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 provided 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%.
- Switzerlandwhich had already diminished its tariffs on U.S. merchandise to zero, doesn’t actually know the right way to reply.
- The European Union has provided 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 someway acquired 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 reveals that in the event you’re aiming for a long-term, steady relationship, a collaborative technique yields the perfect outcomes. Meaning specializing in shared targets and dealing inside every occasion’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 somewhat than boosting exports, the U.S. may find yourself reaching the alternative. There’s additionally the danger of full-blown escalation.
My impression is that the actual intention 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 may be in for a impolite awakening. In truth, Trump’s type may even be known as adversarialthe place the purpose is to make the opposite aspect worse off than earlier than.
Replace: Whereas scripting this, Trump “paused” the tariffs for many international locations—besides China, Mexico, and Canada—for 90 days.
On 2):
How ought to different international locations react? Will China or Vietnam come out forward?
Once more, educational analysis means that neither nation behaved optimally.
The perfect response is commonly to not react too shortlyas that may set off additional escalation. A measured strategythe place all choices and negotiation dimensions are rigorously analyzed, normally results in higher outcomes. In fact, this may be politically troublesome—voters anticipate quick responses—however endurance might yield much better outcomes.
On this context, it may be good for U.S. buying and selling companions to crew up with American firms (like Nike) which can be apparent losers of the tariffs. Or, if European firms have been planning U.S. investments anyway, they may bundle tasks and current them as a giant negotiation package deal.
To date, we’ve seen that the U.S.–China alternate escalated shortly, 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 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' entire
Human historical past is filled with superhuman heroes who appeared undefeatable—till their one deadly weak point was uncovered.
Probably the most well-known instance is Achilleswho 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 which he was later killed.
Why am I mentioning this? As a result of the U.S. below Trump is appearing like an unstoppable superhero, attacking good friend and foe alike.
However final week already revealed an Achilles' entire: the U.S. is extra depending on monetary markets than nearly some other nation. A 15–20% inventory market drop pressured the Trump Administration to “pause” the tariffs. And this is probably not the one weak point.
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 may also cease—at the very least till various sources are developed and scaled.
Conclusion
In my view, the U.S. may obtain much better outcomes if it didn’t attempt to punch everybody within the face without delay. There are actual structural points within the world financial system that should 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 can be clearly a typical purpose to sort things in a extra sutainable means.
However the present U.S. negotiation technique will probably 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 performed.