2024 overview
There isn’t any manner round it: 2024 was a in absolute phrases AND relative phrases actually unhealthy. 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 may be discovered on the Efficiency Web page of the weblog.
Another funds that I comply with 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 seems 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” Put up.
New positions have been: Hermle, Amadeus Fireplace, Eurokai, EVS, STEF and Fuchs plus one undisclosed one.
Bought positions: In 2024, I offered Photo voltaic Group, DEME, Admiral and ABO Power. Logistec was taken out resulting from a purchase out. . The one non permanent member was Ocean Wilsons (Particular Sit). The present portfolio per 31.12.2024 may 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%).
“Energetic 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 “lively contribution” in 2024 was a unfavorable -0,8%. A few of the gross sales have been timed nicely (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 in step with the benchmark.
The relative underperformance occurred from August to November after the portfolio reached an ATH in July. Apart from the yr earlier than, I had no huge winners like Schaffner or Logistec and so the underperformance endured till yr finish.
Annual returns 2011-2024
2024 was now the third yr in 14 years through which I underperformed the benchmark (and the second in a row) and the fourth with a unfavorable 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 Giant 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 would argue that the final time once I underperformed so badly, the following yr was unbelievable, however truthfully, I don’t know what occurs in 2025.
Errors made in 2024
As all the time, I made lots of errors, largely not pulling the set off on some high quality shares I had been watching (Video games Workshop, Goodwin) and as an alternative shopping for “cheaper” cyclical ones with the hope of a 2024 restoration (Hermle, Amadeus Fireplace). Though I noticed that I used to be unsuitable with my timing, I didn’t cut 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 nicely 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 evaluation a number of the current positions (Sixt, Admiral) which is commonly a battle as lokoing at new shares is all the time “extra attractive”. I additionally labored on my “funding infrastructure” like creating a core structured watchlist strategy.
Classes discovered 2024
The foremost lesson was clearly that betting on a “macro turn-around” in 2024 for “core Europe” was a nasty concept. I mustn’t do that once more and give attention to firms that do nicely 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 nicely in a market the place the returns are pushed by a couple of shares. Within the subsequent weeks I’ll due to this fact evaluation the technique together with the benchmark extra completely.
Remark “Extrapolate the previous at your personal danger”
As talked about earlier than, I really began investing as a young person within the second half of the Nineteen 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 someway needed to do with the then extremely popular “Cyberpunk” theme. I particularly appreciated the “Shadowrun” sequence.
The Shadowrun books have been a reasonably 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 a lot of the tales performed (2050 or so) was dominated by a couple of big Tech conglomerates, which funnily largely had Japanese names. Why was that the case ? I assume it was most certainly a mirrored image of the dominating “story” within the late Nineteen Eighties and early Nineteen Nineties that Japan and Japanese firms are unstoppable and can dominate the world endlessly. And simply to be clear: These books have been written largely by American authors.
Again than, firms like Sony, and so forth. have been taking on all the things 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 increase would finish in some unspecified time in the future. However again then it wasn’t apparent in any respect.
Up to now 20 years we now have seen two comparable tales taking part in out: The primary one is the Chinese language story. Fairly just like Japan, China appeared unstoppable till very just lately. Now it has grow to be 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 increasingly doubtless.
The second story, which remains to be going robust, is the “American Exceptionalism” story, now embodied largely by way of the “Magnificient 7” (or 8) shares which have been driving returns up to now two years. Every time I focus on investments nowadays, the primary query is all the time: Why don’t you simply make investments into US shares ? Many buyers nowadays simply extrapolate the previous and as soon as once more consider that “this time it’s completely different” and the American inventory market generally and these shares particularly are as soon as once more unstoppable endlessly.
If one thing like Shadowrun would emerge nowadays, I’m fairly positive that the Megacorps of the longer term can be named based mostly on Amazon, Microsoft, Google or Meta.
Though historical past doesn’t repeat itself, it all the time rhymes. So additionally on this case , in some unspecified time in the future in time, cyclicality will kick in and people unstoppable giants will abruptly look way more susceptible. To be clear: I don’t know when this wil lbe the case. This yr ? Subsequent yr or in 3 years time ? However on reflection, it should look a lot clearer what could have triggered 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. Perhaps as soon as once more, Microsoft & Co handle to seize a lot 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 interim, just one factor is evident: Their enterprise has grow to be way more capital intensive and the one firm which is basically incomes cash right here is Nvidia and semiconductors have all the time been cyclical.
Perhaps it seems that Tibetian monks are finest geared up to coach the last word AGI ? I’m personally very sceptic that the Magnificient 7 and American firms generally will all the time win in any state of affairs. However that’s to a sure extent priced into their shares. So be further cautious and don’t merely extrapolate the previous.
Bonus observe: “Digital Madness”
