2024 overview
There isn’t a manner round it: 2024 was a in absolute phrases AND relative phrases actually dangerous. The Worth & Alternative portfolio misplaced -2,5 % (together with dividends, no taxes, AOC fund as of 30.09.2023) in opposition to +4,9% for the Benchmark (Eurostoxx50 (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%), all efficiency indices together with Dividends). Hyperlinks to earlier Efficiency critiques could be discovered on the Efficiency Web page of the weblog.
Another funds that I observe have carried out as follows in 2024:
Companions Fund TGV: 4,8%
Profitlich/Schmidlin: +9,0%
Over the 14 years from 12/31/2010 to 12/31/2024, the portfolio gained +387% in opposition to +168% for the Benchmark (earlier than taxes). In CAGR numbers this interprets into 12% p.a. for the portfolio vs. 7,3% p.a. for the Benchmark.
As a graph this appears to be like as follows:
Present portfolio / Portfolio transactions & New positions:
In 2024, portfolio exercise was medium busy as already talked about within the “23 (+1) shares for 2025” Publish.
New positions had been: Hermle, Amadeus Fireplace, Eurokai, EVS, STEF and Fuchs plus one undisclosed one.
Offered positions: In 2024, I bought Photo voltaic Group, DEME, Admiral and ABO Power. Logistec was taken out resulting from a purchase out. . The one short-term member was Ocean Wilsons (Particular Sit). The present portfolio per 31.12.2024 could be seen as all the time on the portfolio web page.
Some Portfolio statistics
The weighted holding interval as of 31.12.2024 has been 3,8 years and is inside my goal of 3-5 years. It declined barely primarily due to the sale of Admiral. The 10 largest positions account for round 52% (52%) of the portfolio, the largest 20 for round 91% (86%).
“Lively share” vs “do nothing”
The “Do nothing” strategy, i.e. simply letting the Portfolio run from 31.12.2023 and acquire dividends would have resulted in a efficiency of -1,7%, so my “energetic contribution” in 2024 was a unfavourable -0,8%. A few of the gross sales had been timed effectively (Admiral, DEME, Photo voltaic), then again I invested in dropping shares like Hermle and Amadeus Fireplace.
Month-to-month returns 2024
In relative phrases, the primary half of 2024 was comparatively consistent with the benchmark.
The relative underperformance occurred from August to November after the portfolio reached an ATH in July. Apart from the 12 months earlier than, I had no large winners like Schaffner or Logistec and so the underperformance continued till 12 months finish.
Annual returns 2011-2024
2024 was now the third 12 months in 14 years during which I underperformed the benchmark (and the second in a row) and the fourth with a unfavourable return. Once more, this was pushed by the numerous underperformce of small caps particularly in France and Germany as talked about above. My benchmark consists out of fifty% German/European Massive caps, in distinction, my solely massive cap is ACT with a 5% weight and even that inventory had a flat efficiency in 2024.
If I would want to promote my technique to buyers, I’d argue that the final time once I underperformed so badly, the subsequent 12 months was implausible, however actually, I do not know what occurs in 2025.
Errors made in 2024
As all the time, I made plenty of errors, largely not pulling the set off on some high quality shares I had been watching (Video games Workshop, Goodwin) and as a substitute shopping for “cheaper” cyclical ones with the hope of a 2024 restoration (Hermle, Amadeus Fireplace). Though I noticed that I used to be incorrect with my timing, I didn’t scale back the effected shares sufficient (solely small reductions of Hermle & Amadeus Fireplace)
General, I clearly didn’t focus sufficient on diviersifying the underlying enterprise publicity sufficient and due to this fact ended up holding the bag of an excessive amount of publicity to cyclical German and French shares.
What went effectively in 2024
This part is brief. I believe I elevated to high quality of the portfolio to a ceertain extent however with out a lot too present for efficiency. I additionally managed to overview among the current positions (Sixt, Admiral) which is usually a wrestle as lokoing at new shares is all the time “extra horny”. I additionally labored on my “funding infrastructure” like growing a core structured watchlist strategy.
Classes discovered 2024
The most important lesson was clearly that betting on a “macro turn-around” in 2024 for “core Europe” was a foul thought. I mustn’t do that once more and give attention to firms that do effectively in any state of affairs.
One other leasson that I discovered is clearly that my underlying technique, which isn’t to explicitly search for winners however to largely keep away from losers, doesn’t work effectively in a market the place the returns are pushed by just a few shares. Within the subsequent weeks I’ll due to this fact overview the technique together with the benchmark extra totally.
Remark “Extrapolate the previous at your individual threat”
As talked about earlier than, I really began investing as a teen within the second half of the Eighties (Sure, I’m that previous). In addition to beginning to make investments or quite amateurish speculate within the inventory market, I devoured each books that one way or the other needed to do with the then very talked-about “Cyberpunk” theme. I particularly favored the “Shadowrun” sequence.
The Shadowrun books had been a fairly crude and and dystopian (however enjoyable) combination of Fantasy and “tech fiction” with one attention-grabbing side: Within the Shadowrun universe, the interval the place many of the tales performed (2050 or so) was dominated by just a few large Tech conglomerates, which funnily largely had Japanese names. Why was that the case ? I assume it was almost certainly a mirrored image of the dominating “story” within the late Eighties and early Nineties that Japan and Japanese firms are unstoppable and can dominate the world perpetually. And simply to be clear: These books had been written largely by American authors.
Again than, firms like Sony, and so forth. had been taking on every little thing that needed to do with electronics and Japanese firms went on a shopping for spree fueled by their ever rising inventory and actual property markets.
After all everyone knows how that story ended, however again then most individuals simply extrapolated the previous years into the longer term. I only recently learn the very attention-grabbing biography of Masa Son, “Playing Man”, which covers that period and the way apparent on reflection it was that this growth would finish sooner or later. However again then it wasn’t apparent in any respect.
Previously 20 years now we have seen two comparable tales enjoying out: The primary one is the Chinese language story. Fairly much like Japan, China seemed unstoppable till very just lately. Now it has turn into fairly apparent that the financial mannequin of China from the previous, counting on huge infrastructure and actual eastate funding has run out of steam. How that is going to finish, nobody is aware of, however the “Japanese Situation” is changing into an increasing number of doubtless.
The second story, which continues to be going robust, is the “American Exceptionalism” story, now embodied largely by way of the “Magnificient 7” (or 8) shares which were driving returns previously two years. Each time I focus on investments lately, the primary query is all the time: Why don’t you simply make investments into US shares ? Many buyers lately simply extrapolate the previous and as soon as once more imagine that “this time it’s completely different” and the American inventory market normally and these shares specifically are as soon as once more unstoppable perpetually.
If one thing like Shadowrun would emerge lately, I’m fairly positive that the Megacorps of the longer term could be named primarily based on Amazon, Microsoft, Google or Meta.
Though historical past doesn’t repeat itself, it all the time rhymes. So additionally on this case , sooner or later in time, cyclicality will kick in and people unstoppable giants will all of the sudden look far more weak. To be clear: I do not know when this wil lbe the case. This 12 months ? Subsequent 12 months or in 3 years time ? However on reflection, it is going to look a lot clearer what can have brought about this and why as soon as once more, simply extrapolating the previous into the distant future isn’t a good suggestion.
However what about generative/agentic AI ? Who is aware of. Possibly as soon as once more, Microsoft & Co handle to seize many of the financial upside, perhaps not. 3 years in the past it was the Metaverse, perhaps in 3 years time it’s one thing else. In the meanwhile, just one factor is obvious: Their enterprise has turn into far more capital intensive and the one firm which is actually incomes cash right here is Nvidia and semiconductors have all the time been cyclical.
Possibly it seems that Tibetian monks are greatest outfitted to coach the final word AGI ? I’m personally very sceptic that the Magnificient 7 and American firms normally will all the time win in any state of affairs. However that’s to a sure extent priced into their shares. So be additional cautious and don’t merely extrapolate the previous.
Bonus monitor: “Digital Madness”
