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 might be discovered on the Efficiency Web page of the weblog.
Efficiency evaluate:
After 2023 and 2024, 2025 as soon as once more seems like a 12 months the place it will likely be onerous 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 have been the weakest subsector un my benchmark and huge caps, particularly German giant caps did properly in Q1, largely 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 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 bought). Additionally my two purchases (Robertet, Bombardier) didn’t too properly.
Nonetheless 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 might be a 12 months the place beating the benchmark with my strategy seems very troublesome.
Transactions Q1:
The present portfolio might be seen as at all times on the Portfolio web page.
In Q1, I bought Amadeus Hearth, Energiekontor, Sto and partially Hermle. In all instances, 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’d write a brand new “panic” put up quickly. However this time, I wish to deal with one particular side of the previous few days: negotiation ways as we will at present 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 with regards 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 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 how you can reply.
- The European Union has supplied decrease traiffs if the US lowers tariffs, too, however stated it could retaliate if no settlement is being made
- And I’m not even speaking concerning the penguins of Heard Island and McDonald Islands, who in some way received slapped with a ten% tariff too.
Two Large Questions:
- Is “bullying from a place of energy” a superb technique?
- What’s the greatest 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 one of the best outcomes. Which means specializing in shared objectives and dealing inside every social gathering’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 might be that many outdoors the U.S. could intentionally keep away from U.S. merchandise, even when they’re cheaper. So quite than boosting exports, the U.S. would possibly find yourself attaining the alternative. There’s additionally the chance of full-blown escalation.
My impression is that the true intention behind the tariffs is to lift income to fund even bigger revenue 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 would possibly even be known as adversarial, the place the aim is to make the opposite aspect worse off than earlier than.
Replace: Whereas penning 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, tutorial analysis means that neither nation behaved optimally.
The most effective response is commonly to not react too rapidly, as that may set off additional escalation. A measured strategy, the place all choices and negotiation dimensions are rigorously analyzed, normally results in higher outcomes. In fact, this may be politically troublesome—voters count on quick responses—however persistence could yield much better outcomes.
On this context, it may be good for U.S. buying and selling companions to staff up with American corporations (like Nike) which might be apparent losers of the tariffs. Or, if European corporations have been planning U.S. investments anyway, they may bundle initiatives and current them as a giant negotiation bundle.
To this point, we’ve seen that the U.S.–China change 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 repute as a dependable buying and selling associate 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 point 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 susceptible.
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 pal and foe alike.
However final week already revealed an Achilles’ heel: the U.S. is extra depending on monetary markets than virtually every other nation. A 15–20% inventory market drop pressured the Trump Administration to “pause” the tariffs. And this might not be 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 even cease—a minimum of till various sources are developed and scaled.
Conclusion
For my part, the U.S. may obtain much better outcomes if it didn’t attempt to punch everybody within the face directly. There are actual structural points within the world financial system that have to be addressed. My dwelling 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 make things better 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 received’t have many winners—and that irreversible harm could have already got been finished.
