Within the first 6 months of 2025, the Worth & Alternative portfolio gained +5,8% (together with dividends, no taxes) towards 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 evaluations could 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 troublesome yr. Regardless of my conventional obese in European shares, I didn’t have sufficient publicity to performing sectors (Financials, Protection) however as a substitute 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 optimistic information is that June was a comparatively good month, in relative phrases the very best month since December 2023 and the primary few days in July appeared fairly good as effectively.
For the document, that is the month-to-month improvement of the relative efficiency for 2025:
Transactions Q2:
The present portfolio could be seen as at all times on the Portfolio web page.
In Q2, I offered Royal Unibrew and the remainder of Hermle. Royal Unibrew has been a fairly OK funding, returning round +40% over barely lower than 2,5 years. The primary cause 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%) wanting on the current information.
Common holding is 3,6 years, Money is at ~9,7% (vs. 4% at yr finish).
Remark: Simply hold going or mirror & adabt
As in lots of areas of life, if issues are operating easily and efficiently, why do you have to change something ?
If a soccer staff is successful, the coach would possibly use the identical gamers and the identical tactic for each subsequent match.
However after all, if issues don’t run so easily anymore, there’s at all times the query: Must you proceed to do the identical (and “hunker down) and hope for issues getting higher or do you have to make modifications ?
In Soccer, the reply is often: Make modifications rapidly earlier than you get fired as a coach. Hunkering down as a coach often doesn’t work out very effectively for the person coach. As a aspect comment: In soccer, if in any respect, firing coaches solely has quick time period optimistic impact on common.
In investing nevertheless, it could possibly make sense simply to proceed what you have got been doing as a result of the explanation for underperformance is perhaps solely short-term or cyclical. Chasing the newest traits or previous efficiency can truly be fairly dangerous.
Alternatively, even in investing, it may be very advisable to vary or refine the strategy as a way to enhance outcomes. A well-known instance is Warren Buffett transferring from “Graham” shares to GARP shares after teaming up with Charlie Munger. He truly 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 yr 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 speculate primarily into effectively managed, stable firms with respectable prospects at average valuations with a sure deal with small caps, continues to be legitimate in the long term.
Nonetheless, the best way I execute the technique would possibly require a number of updates and upgrades as I recognized some recurring errors and weaknesses equivalent to:
- having a too intensive 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 solution to mix Qualitative and quantitative elements
I’ve no clear rule to resolve if I can buy one thing that appears very low-cost however isn’t so prime quality vs. one thing that could be very prime quality however not as low-cost - not having a scientific solution to measure current positions towards potential replacements
I don’t wish to exchange current positions every day however evaluating potential alternate options systematically regularly may be a worthwile train - promoting too early when shares carry out effectively
This can be a recurring situation over the previous 15 years since I write this nlog. It has gotten a bit higher however I’ve no systematic solution to resolve on this. - not shopping for if a inventory on the watchlist positive factors momentum (typically ready for a less expensive value 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 improper perspective if as an example the basics enhance considerably for a enterprise - Shopping for as a substitute underperforming shares solely to get stunned by worsening fundamentals
That is the flipside of the earlier submit. I typically purchase into falling inventory costs as a result of the inventory appears to be like cheaper, solely to search out out that “Mr. Market” truly had some extent. My “wager” on a restoration within the second half of 2024 was a prie instance for that. - cumbersome guide processes when screening firms, particularly after 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 aspect and mix it with the quantitative aspect (valuation)
- Scale back my watchlist to a manageable quantity of firms that I observe extra carefully and prioritize them higher
- Measure current 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 a substitute of fully ignoring it
I’ll write extra about this within the coming weeks as most of that is “Work-in-progress”.
It clearly could 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 improve the percentages of higher efficiency (vs. the outdated strategy) within the mid to long run. And it’s perhaps much more enjoyable.
Perhaps one ultimate comment: I’ll intentionally NOT use AI for writing the weblog. Why ? As a result of I absolutely subscribe to this staement from legendary “VC Thinker” Paul Graham:
Keep secure and funky & benefit from the summer season (in the event you reside within the Northern hemisphere).
