Within the first 3 months of 2025, the Worth & Alternative portfolio gained +0,9% (together with dividends, no taxes) towards 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 will be discovered on the Performance Page of the weblog.
Efficiency evaluate:
After 2023 and 2024, 2025 as soon as once more appears to be like like a yr the place it is going to be onerous to compete with my benchmark. That is how the person components 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 had been the weakest subsector un my benchmark and huge caps, particularly German massive 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 “sizzling sectors”. In distinction, particularly my French small caps continued to endure declines alongside a number of different shares. There have been a number of winners (EVS, Jensen) however not sufficient to counterbalance the losers like STEF or Amadeus Fireplace (which I offered). Additionally my two purchases (Robertet, Bombardier) didn’t too properly.
Nonetheless with the market carnage in the previous few days, it won’t make that a lot sense to elaborate an excessive amount of on Q1, however as soon as once more, 2025 will probably be a yr the place beating the benchmark with my strategy appears to be like very troublesome.
Transactions Q1:
The present portfolio will be seen as at all times on the Portfolio page.
In Q1, I offered Amadeus Fireplace, 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 yr finish).
Remark: Negotiation Ways & Achilles’ Heel
No worries—I’d write a brand new “panic” submit quickly. However this time, I need to deal with one particular side of the previous few days: negotiation techniques as we will presently watch actual time in Trump’s tariff struggle.
The American Method
The U.S. seems to be negotiating from a (perceived) place of overwhelming energy. The strategy can finest be described as bullying—particularly in the case 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 varied 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 diminished its tariffs on U.S. merchandise to zero, doesn’t actually know the right way to reply.
- The European Union has provided decrease traiffs if the US lowers tariffs, too, however mentioned it will retaliate if no settlement is being made
- And I’m not even speaking concerning the penguins of Heard Island and McDonald Islands, who someway received slapped with a ten% tariff too.
Two Huge Questions:
- Is “bullying from a place of energy” technique?
- What’s the finest counter-strategy for these on the receiving finish?
On 1):
Most tutorial analysis exhibits that for those who’re aiming for a long-term, steady relationship, a collaborative technique yields one of the best outcomes. Meaning 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—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 will probably be that many outdoors the U.S. could intentionally keep away from U.S. merchandise, even when they’re cheaper. So reasonably than boosting exports, the U.S. may find yourself attaining the alternative. There’s additionally the chance of full-blown escalation.
My impression is that the true purpose 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 type may even be known as adversarial, the place the objective is to make the opposite facet worse off than earlier than.
Replace: Whereas scripting this, Trump “paused” the tariffs for many nations—besides China, Mexico, and Canada—for 90 days.
On 2):
How ought to different nations react? Will China or Vietnam come out forward?
Once more, tutorial analysis means that neither nation behaved optimally.
The very best response is usually 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. After all, this may be politically troublesome—voters count on quick responses—however persistence 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 firms (like Nike) which are apparent losers of the tariffs. Or, if European firms had been planning U.S. investments anyway, they might bundle initiatives and current them as an enormous negotiation bundle.
To date, 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 scenario. However one factor appears sure: America’s popularity 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 spot was uncovered.
Probably the most well-known instance is Achilles, who was dipped into the River Styx by his mom to achieve 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 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. below Trump is performing like an unstoppable superhero, attacking good friend and foe alike.
However final week already revealed an Achilles’ heel: the U.S. is extra depending on monetary markets than nearly another nation. A 15–20% inventory market drop compelled the Trump Administration to “pause” the tariffs. And this is probably not the one weak spot.
For instance:
- ~70% of worldwide 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 will even cease—a minimum of till different 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 economic system that should be addressed. My residence nation, Germany, is simply too depending on exports, which doesn’t result in an optimum end result for its residents. So there could be clearly a typical objective to make things better in a extra sutainable approach.
However the present U.S. negotiation technique will most definitely expose even extra weaknesses in America’s place, with doubtlessly extreme long-term penalties. My feeling is that this commerce struggle gained’t have many winners—and that irreversible harm could have already got been executed.