Within the first 3 months of 2025, the Worth & Alternative portfolio gained +0,9% (together with dividends, no taxes) towards a acquire 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 assessment:
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 nicely 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 nicely.
Nevertheless with the market carnage in the previous couple of days, it won’t make that a lot sense to elaborate an excessive amount of on Q1, however as soon as once more, 2025 can be a 12 months the place beating the benchmark with my strategy seems very tough.
Transactions Q1:
The present portfolio might be seen as all the time 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 incorrect. 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 wish to give attention to one particular facet of the previous few days: negotiation techniques as we are able to 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 power. The strategy can finest be described as bullying—particularly on the subject of tariffs. The Trump Administration has said that it’s going to retaliate towards any counter-tariffs by growing 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%.
- Switzerland, which had already decreased its tariffs on U.S. merchandise to zero, doesn’t actually know how you can reply.
- The European Union has provided decrease traiffs if the US lowers tariffs, too, however mentioned 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 by some means obtained slapped with a ten% tariff too.
Two Huge Questions:
- Is “bullying from a place of power” a great technique?
- What’s the finest counter-strategy for these on the receiving finish?
On 1):
Most educational analysis reveals that should you’re aiming for a long-term, steady relationship, a collaborative technique yields the very best outcomes. Which means specializing in shared targets and dealing inside every get together’s constraints and preferences.
The Trump Administration is utilizing what’s referred to as a aggressive technique—making an attempt 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 can be that many outdoors the U.S. could 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 chance 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 is likely to be in for a impolite awakening. In truth, Trump’s fashion may even be referred to as adversarial, the place the aim is to make the opposite facet 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, educational analysis means that neither nation behaved optimally.
The very best response is commonly to not react too shortly, as that may set off additional escalation. A measured strategy, the place all choices and negotiation dimensions are fastidiously analyzed, often results in higher outcomes. After all, this may be politically tough—voters anticipate quick responses—however endurance could 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 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 tasks and current them as a giant negotiation package deal.
To this point, 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 scenario. However one factor appears sure: America’s popularity 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.
Essentially 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 coated 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. underneath Trump is performing 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 is probably not 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 may even cease—at the least till different sources are developed and scaled.
Conclusion
For my part, 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 world economic system that should be addressed. My house nation, Germany, is simply too depending on exports, which doesn’t result in an optimum consequence for its residents. So there can be clearly a standard aim to sort things in a extra sutainable method.
However the present U.S. negotiation technique will almost certainly 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 could have already got been achieved.
