After the great fun of doing the “All German shares” Series in 2019/2020, It is time to start the new “All Swiss Shares” series in 2021. According to the Swiss Stock Exchange, there are currently 220 Swiss based listed companies, so the series will be a little bit shorter. The reason for choosing Switzerland is that I actually own already two Swiss based companies (Richemont, Zur Rose) and that I think there is an interesting mixture of companies in Switzerland, several of which I have covered over the last 10 years.
Again, mostly for my own entertainment, I will use a random approach in looking at the companies.
One difference to the German series is that I’ll try to better define what I am looking for. In principle, my portfolio comprises three different styles/buckets:
- “Long term holdings” – Stocks where I think there is good long term potential. For this group, I require high quality with regard to the business model, leadership and balance sheet
- “Value Trades” – Stocks where I think for some specific reasons there is a significant undervaluation that will materialize in a period of up to 3 years. This could be a “sum-of-part” situation, a spin-off, activist involvement or another situation where I think that I can identify the reason for the undervaluation and where I have a different view. Due to the shorter time horizon, the requirements for “quality” are a little bit lower.
- “Special situations” – in my definition, special situations are based on corporate actions (M&A, Squeeze out etc.) where the potential outcomes are clear and the main task is to assess probabilities and an expected value.
So now let’s jump into the first 10 stocks. Surprisingly, I found already 4 stocks worth “watching” out of the first batch.
- BVZ Holding AG
It is now 14+ months since the “Covid-19 panic” set in and that I started the “Panic Journal” mini series. After season 1 and 4 episodes of Season 2, I think it is now time to close the series. Of course, Covid-19 is not over yet and currently in India the Virus is rampaging as never before.
However for the stock market it seems, the Virus and the pandemic is “last year’s news”. I think there is some small risk that some of the virus mutations could be a problem, on the other hand, the “magic” of the mRNA vaccine seems to be a decent risk mitigation factor.
So looking back, what are the major learnings/surprises for me from a investment perspective ?
- Buying the dip has worked again beautifully
A whole generation (or even two generations) of investors now has first hand experience that for the market overall, buying the dip always works. Personally, I have started my first “baby steps” in 1987 and even back then buying into the crash was a good opportunity.
An interesting overview how retail spending in the US has developed since the beginning of the pandemic
A “behind the scenes” deep dive into the development of the J&J Covid-19 vaccine
A great allegory on the difference of investing like an Octopus vs. investing like a Shark
How Square succeeded in the hard fought payments business
Canary Wharf is trying to fight itself out of the Covid-19 hole
Although his performance is bad, David Einhorn is still writing decent investor letters
Which game in investing are you playing ?
My long term readers know that I am relatively sloppy with updates especially when a stock does well. When I have time then I try to look at least briefly into annual reports when they are published .
VEF (formerly Vostok Emerging Finance)
VEF had a pretty decent 2020. Share price went up in 2020 by +37%, although faster than NAV which went up by around 22%. This was however achieved with some volatility:
What I missed is that they dis a share placement in November 2020. As usual, the reporting is very transparent so one can see that 4 out of 12 investments lost value. However the biggest position, Brazilian Creditas was also the best performer. Around 2/3 of the portfolio is now Brazilian Fintech. Their only new investment in 2020 was an Indian mobile payment company which makes it their first Indian investment.
WeWork is coming back as a SPAC. Is it any better now ?
Muddy Waters on the Archego blow up
Matt Mullenweg, founder of WordPress, has some beef with competitor Wix
International Value Advisors (IVA) once had 10 bn under management but has shut down recently
Jamie Dimon’s annual letter to JPM shareholders is worth a read especially Chapter III on competition for banks
Pareto Securities is organizing an online Tech/It conference (open also “for free” for private investors) on April 20th with a lot of interesting Small Cap companies form Germany and Norway (including Bouvet).
An interesting view: Comparing the build up of avalanches with financial markets
In the first 3 months of 2021, the Value & Opportunity portfolio gained +7,6% (including dividends, no taxes) against a gain of +7.9% for the Benchmark (Eurostoxx50 (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%), all TR indices).
Links to previous Performance reviews can be found on the Performance Page of the blog. Some other funds that I follow have performed as follows in the first 3M 2021:
Partners Fund TGV: +17,5%
Profitlich/Schmidlin: 5,34 %
Squad European Convictions +9,52%
Ennismore European Smaller Cos +6,08% (in EUR)
Frankfurter Aktienfonds für Stiftungen 7,27%
Evermore Global Value 7,85%USD)
Greiff Special Situation 1,87%
Squad Aguja Special Situation 6,49%
Paladin One 4,75%
Disclaimer: This is not Investment Advice. PLEASE DO YOUR OWN RESEARCH !!!!!
My initial interest in Euronext came after reading this FT article in February which mentions that the Amsterdam Stock Exchange seems to be a big winner of Brexit, but that in the long run Paris could come out on top as most of the trading in European shares will move “on shore” to the continent.
What I found interesting is that Frankfurt doesn’t seem to be a big winner but that both, Amsterdam and Paris belong to stock listed Euronext NV Group. Personally, a lot of my own small cap investments are listed on Euronext , but so far I really thought that Euronext is more a collection of “back water” exchanges like Dublin. Lisbon or Brussels rather than a more serious competitor to LSE and Deutsche Börse.
Euronext the company
Euronext has a colorful history, among others they merged and de-merged with the NYSE. After going public in 2014, they have been rolling up smaller European stock exchanges, among them Dublin (2017) and Oslo (2019).
Their biggest move is yet to come: After the Merger of LSE and Refinitiv, Euronext agreed to buy Borsa Italiana for ~4,3 bn EUR, the transaction will be executed in the first half of 2021. After the transaction, Italy will be the biggest country by revenues for Euronext.
Multiple fundamental tailwinds