Within the first 9 months of 2025, the Worth & Alternative portfolio gained +6,6% (together with dividends, no taxes) towards a achieve of +16,7% for the Benchmark (Eurostoxx50 (25%), EuroStoxx small 200 (25%), DAX (30%), MDAX (20%), all TR indices).
Hyperlinks to earlier Efficiency evaluations may be discovered on the Efficiency Web page of the weblog.
Efficiency evaluation:
After two comparatively good monhts in June and July, August and Septmeber as soon as once more had been underperforming months and I’m now 100% positive that this would be the third underperforming yr in a row.
Once more, some shares did actually badly (Fuchs, STEF, AOC Fund) whereas the winners weren’t profitable sufficient to match benchmark efficiency.
As talked about earlier than, the great factor is that I don’t need to care about sad exterior traders and/or paying subscribers. As I’ve indicated within the final evaluation, I’ve been adjusting my method and enhancing my funding “infrastructure” however it will be silly to count on a brief time period rebound in relative efficiency within the present market surroundings. For subsequent yr, I’m at the moment considerung to change to 6M Efficiency reporting.
Transactions Q3:
The primary transaction was that I offered Fuchs (with an general revenue of 6%) and acquired and offered Novo Nordisk with a ~11% achieve. Fuchs stays on my watchlist however is clearly uncovered to sectors which are at the moment not doing so nicely.
Common holding interval is 3,5 years, Money is at ~13,7% (vs. 4% at yr finish 2024).
Remark: Hold ready for that European Financial rebound
2025 is now the third yr in a row, when the a lot anticipated “second half financial rebound” in Germany & Europe will very probably not occur. One in all my largest funding errors previously 3 years was clearly that I had too many bets that had been roughly immediately relying on such a rebound and a few type of imply reversion. I’ve trimmed most of those positions to a sure extent however not all. And I’ve to confess that I’m nonetheless tmepted to placed on these type of trades however I’ve principally resisted thus far.
The large query in fact is: Will the Rebound lastly are available 2026 and below what circumstances ?
Once I would describe the present financial state of affairs in Germany & Europe one might do it with this image:
We’re at the moment principally left with the Dangerous and Ugly and little or no of the Good.
Particularly in German politics, individuals as all the time are searching for “easy” options. Impressed by MAGA and Trump, a few of these straightforward options proposed are as an illustration to cease all Renewable Vitality efforts and return to “low-cost” fossil fuels (and/or Nuclear). One other “straightforward repair” can be that cancelling the dedication to part out ICE engines which might magically clear up all issues of the all necessary German Automotive trade.
Possibly, however solely mabye such modifications might create a brief time period bump in confidence in some sectors however for my part the problems are deeper and way more structural and Energey as usch shouldn’t be the important thing driver.
Wanting just a few years again, 2019 was already a really troublesome yr and Germany/Europe had been heading right into a recession regardless of (or beacause of) extremely low rates of interest which have stored the evonomy someway afloat. This was solely held up by COVID which result in a brief shock after which to a low rate of interest, excessive Authorities induced spending increase that lasted 1-2 years..
The pure choice means of bankrupting weak corporations had been intentionally switched off in an effort to keep away from a complete soften down after which solely slowly reinstated.
Europe and particularly Germany’s enterprise mannequin seemed for a very long time as follows:
- import low-cost fossil gas and uncooked materials principally from Russia
- Effectively manufacture power intensive Chemical/metallic merchandise in large clusters
- Export into the world specializing in automobiles and manufacturing unit tools
- Use the web proceeds to principally put them into financial institution accounts
- Largely Ignore no matter occurs in Software program and lots of new applied sciences
This enterprise mannequin has been now attacked from a number of sides. That is as an illustration the checklist of the biggest buying and selling companions in 2016, sorted by exports from Germany’s perspective in 2015:
Among the many massive 5 buying and selling companions, we’ve got the US, which has simply declared a tarif conflict towards Europe, France which has its personal issues, UK which has since then exited the EU and China, which now in lots of areas is no less than an equqal competitor and even worse, partially thanks resulting from “us serving to them to construct probably the most fashionable prodcution services.
As well as, a budget power and uncooked materials imports from Russia aren’t any extra. One other instance: In 2018, greater than 50% of the Pure Gasoline was imported from Russia and Russia was additionally a High 15 Export market.
I’m not positive what number of of my readers suppose that it will be a good suggestion to reastablish the Gasoline pipelines to Russia below the present Russian management, however I don’t suppose it’s a good suggestion.
Lastly, the lengthy stretch of extremely low rates of interest which primarily supported the development and actual property trade for a very long time, are over. In 2018, development accounted for round 10% of GDP in Germany, in 2024 it fell to five%.
The European inventory market had reacted partially very positievely totally on the announcement of a lot elevated speanding from Germany on Protection and Infrastructure, however thus far little or no tangibel stuff has occurred.
So what’s the upside ?
- Critical reforms
- Considerably decrease rates of interest
- German spending kicks in an creates a (quick time period) upswing
- Peace in Ukraine and large rebuilding effort
- Attracting extra gloabel tech expertise resulting from US hostility towards immigrants
Quick time period, critical reforms are fairly unlikely wherever one appears. The probably tailwind for my part may very well be that spending kicks in and along with decrease rates of interest ignites some type of bounce again.
If politicians can be good, they might attempt to mobilise non-public capital with tax breaks to construct housing, as lack of housing is clearly a difficulty in most of Germany’s bigger cities however I’m not positive if this occurs.
However make no mistake: In my view, the normal, power intensive, metal based mostly export mannequin of Germany is completely damaged. We will be unable to compete towards the Chinese language and the US is not going to enable imports to rise considerably.
Due to this fact I feel it is extremely necessary to keep away from long run investments into corporations that depend on the outdated mannequin. The largest mistake one could make is to guess on mid- or long run imply reversion of companies which are totally uncovered to the “outdated German/European” enterprise mannequin.
The large query clearly is: What sort of enterprise fashions can create long run worth below a such a long run structural shift ? I’m not positive however we are going to discover out.
There’s the well-known saying that you’ve reached the center of the tunnel when it’s the darkest. So possibly we see a broader rebound of the financial system in Germany and Europe in 2026, however I can’t improve my bets on that proper now. If we don’t see that rebound as soon as once more, then 2026 may not be an excellent yr for inventory traders.
