Performance review Q1 2018

Performance Q1 2018:

In Q1 2018, the Value & Opportunity portfolio lost -1,38% (including dividends, no taxes) against -3,90% for the Benchmark (Eurostoxx50 (Perf.Ind) (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%)).

Some other funds that I follow have performed as follows in Q1 2018:

Partners Fund TGV: -10,79% 
Profitlich/Schmidlin: -4,45%
Squad European Convictions +0,19%
Ennismore European Smaller Cos -1,40% (in EUR)
Frankfurter Aktienfonds für Stiftungen -0,47%
Evermore Global Value -3,03%
Greiff Special Situation +0,65%
Squad Aguja Special Situation -5,38%
Paladin One +0,57%

Performance attribution:

The top 3 performers on a weighted basis were for Q1

Weight 12/17 Perf ytd Attr
Tonnellerie Frere Paris 9.8% 7.7% 0.8%
Record Plc 3.8% 16.4% 0.6%
G. Perrier 4.5% 6.5% 0.3%

The top 3 detractors were:

Weight 12/17 Perf ytd Attr
Majestic Wine 4.8% -11.8% -0.6%
Metro 6.1% -10.0% -0.6%
Silver Chef 3.4% -35.2% -1.2%

Clearly, Silver Chef was the dominating negative surprise in 2018 so far. On the plus side, especially the French stocks show resilience.

The relatively good performance of the portfolio was supported by a 14,5% cash position. To be clear: this is not an active market timing attempt but rather the lack of convincing ideas at the moment.

Portfolio transactions:

I sold IGE& XAO in the beginning of February at 138 EUR, netting a gain of ~228% for 4,7 year holding period. I assumed that it was a good price as the take-over offer was only 132 EUR. So far it looks like that this was a mistake as the stock now trades at 151 EUR. Acquirer Schneider SA received only 70% of the shares and I guess investors are expecting a higher offer.  The other exit was Silver Chef in March, which resulted in a -40% loss and hopefully some lessons learned.

The only new position was Expedia, which I revisited and found more attractive than back last year when i looked at them for the first time.

As always, the current portfolio can be seen on the portfolio page.

Outlook 2018:

Q1 2018 was in my opinion a quite interesting quarter. At first, it looked like that nothing could stop this bull market from going higher every single day. But then somehow the tide turned and market participants got more cautious.


For me personally the biggest stories in Q1 came out of China: Two prolific foreign asset buyers, HNA and Anbang now seem to be in huge trouble. HNA has started selling it’s “trophy assets”  and Anbang has been basically taken over by the Government. Both conglomerates were huge buyers of non-Chinese assets in the past. For me, for a long time, China was “the gorilla” in the famous video. But I have to admit that for the last 2-3 years I stopped worrying about China because it looked like the Government had everything under control. That these two Group’s now are more or less bankrupt in my opinion is a somehow troubling sign. It is really difficult to understand what’s going on in CHina but I do think it might be worth to look into this deeper in order to find out what is really going on there. What I found interesting is that especially the Anbang case was almost completely ignored by the financial media.

Although I am not a market timer and macro investor, I do think it makes sense to keep an eye on such potentially very important developments.

In any case, I think it will pay out to remain patient. Other than in previous years, the “fear of losing out” by not being invested in the big momentum names (e.g. FANGs) looks a lot less pressing this year. Which is a good thing in my opinion.





  • Do you consider the current stock price of Tonnellerie Frere Paris (give or take EUR 38) as a good buying opportunity?
    Thank you for your posts.

  • Hey mmi, don’t you think Schneider SA is overpaying for IGE+XAO? I sold too early as well. Don’t understand why they are paying such a high multiple for a company that is not growing anymore as it used to do.

  • globalstockpicking

    Agree that the Anbang/HNA cases are very interesting. So many details to this, with everything from the guy being kidnapped in Four Seasons HK and brought back to China to set things straight. I can recommend a fun podcast episode about HNA, which illustrates nicely what kind of spending spree they have been on. Imagine the balance sheet of the Chinese local banks that backed this spending spree (madness):

    I have an upcoming investment case on one of the holdings of HNA. Too busy lately, but maybe I can get something out on it soon.

    • Maybe HNA and SoftBank are in a competition of random investing. Same of the Ministry of Silly Walking, but with money. I prefer Monty Python though…

    • globalstockpicking

      Got the investment case out now, Rezidor Hotel, not very well written (a bit short on time lately), but at least its something


        Please don’t take the wrong way, but your rezidor piece feels more like a share tip than an actual analysis.

        Statements like “I have done a lot of work but do not have time to write it out” are not worth your readers time really.

        Your piece started off well (the idea), then you detailed a monetisation trigger (HNA) and last you discussed a bit the downside if your thesis does not dan out.

        All well, but this is more of a draft than an actual analysis? Have you mapped out ROCEs? Net Yields? Operating leverage? Debt situation and coverage? Sponsor refinancing? corporate structure?

        What about the underlying business? RevPAR? Average daily rate? Growth rates? rooms vs F&b revenue breakdown? Operating leverage (yet again)? International growth? cost of customer acquisition and retention?

        Last, what about macros? purchasing power in nordics? airline association? a bit of behavioral?

        As you can see we are miles away from what one would call analysis… but the idea is good (then again, seeking alpha is full of ideas but short on analysis 🙂 )

        one very last tip: keep following up on your published work. This blog for example needs to re-evaluate the Record PLC thesis now that the revenue is more and more linked to performance rather than management fee (less moat, more idiosyncratic risk).
        Metro needs a post mortem.

        Best of luck.

        • globalstockpicking

          Not even sure if you are addressing me or mmi? The Record PLC and Metro comment is directed to mmi I guess?

          Regarding Rezidor, first of all, this was an “idea” not a full analysis, I even write above that its not very well written. Also your quotes of doing a lot of work but not writing it out, is not what I wrote, not sure where you found that sentence? That said you have good points, there are several things to dig deeper into to fully understand Rezidor. I have looked at some of what you mention, but far from all.

          Miles away from an analysis might be a bit harsh when I label it as a “idea”. This is a hobby basis free analysis, it’sf take it or leave it 🙂 I do this more for myself than for you guys. If you start to pay me big bucks for me ideas, we could discuss the order of my prioritization. Currently I have a full time job to tend to.


          And I commend you for doing it!

          I see to type of stock picking bloggers out there:

          1) a good majority who focus on tiny and highly illiquid market caps. The analysis is usually quite good but the incentive is clear: they publish AFTER buying a stock to move the market in their direction (this used to be a criminal offense called market manipulation, but the internet and anonymous posting is rewriting the rules of the game).

          2) A minority of good intentioned, ambitious and some time insecure (good thing!) amateur investors: those are usually looking for feedback loops from fellows to challenge their thesis. Their analysis grows better and better every time as their skills improve. Some have evolved their craft to the point that they are as good as top tier sell side research analyst (without conflict of interests).
          Those guys are brutal, commited and a joy to read. I put you in this box perhaps and am just suggesting that you refine your analytics to grow as investor. I and others am sure will always be happy to respond to solid analytical work. I hope this makes sense?
          p.s. on thing I noticed in this group is that the most successful ones are sector focused (insurance, leasing, or financials) for examples. No one has really consistently generated solid alpha by doing shipping at one point, then real estate, then oil and gas….multi industry coverage is more of a mental masturbation in my view than anything: specialism pays.

          Last, yes – this last point was more of a reflection on this bloc: 1) it is trying to do a lot of things (watch series, travel agents, banks, Australian leasing, crypto…) which, in my view, is value destructive. Tonellerie Freres and the likes is obviously where the focus should be.
          and 2) not much followup work. It is usally a first good post followed up with a comment along the lines: “don’t like anymore so I sold”. Again, specialism pays.

          I hope, once again, that the above makes sense. Keep up with the good work.


          p.s. I can see how my posts may come across as harsh – but I assure you that they are well intentioned.

          do throw in the bin any of my thoughts you dislike.

  • Sberbank got a kick in the ass recently. Time to revisit?

    • This gives you some background in Russia’s current issues…

      • I don’t understand your point. Sberbank is no insurance business. The affected loans are as “huge” as a few % of the whole portfolio. So assume they are worthless, the P/E of 5.9 would then be what, 7? lol

        • Economy is unhealthy and investors confidence is low… and many things in between.

        • So when do you want to buy? When everybody is happy and all is good? Or when there is blood on the street?
          I agree with your point, but Sberbank is even profiting from consolidation etc. I read an interview with a Russian central banker some time ago saying that the sector is consolidating. So Sberbank as the biggest player will profit. On top of that, it is cheap and highly profitable. Deutsche Bank is making losses in a booming economy and Sberbank is a money machine in the “beaten down” Russian one. Then look at the share performance. When exactly since 2015 was Russia in a good shape, when Sberbank quadrupled?

        • There are many companies with nice numbers… Turkish banks are showing even nicer P/E ‘s 😉
          – Vakiflar Bankas (PE ~ 4 (!))
          – Halk Bankasi (PE < 3 (!))
          …On my eyes, turkish businesses are as 'good' as russian… (I try to set religion prejudices appart).
          And once upon a time, the financials of greek and italian banks were so promising… But, contrary to you, I don't want to try and rediscover the law of gravity… 😉 [maybe I am older too…]

  • One of my good HK friends, a somewhat famous professor of a top MBA school, claimed wonders about Anbang’s innovation route and brilliant perspectives. I questioned him indeed about HNA’s inexistent financial reporting, and he claimed it was secondary. What I do remember is that HNA bought GateGroup with a generous premium…. I wonder what are implications for others big chinese names… :-s !

  • Mmi

    I completely agree, China is a black box. Who knows what is really going on there. Have a question, regarding another black box, Russia. Lots of things not to like there, all well documented in the news. But financially apperently in rather ok state. What is your take on that? Secondly the dividend of nordic banks like handelsbanken and nordea start looking attractive. I know property market over there look topsy, but isn’t that the case everywhere in Europe? And if i look at the tier1 ratio’s close to 20 i thought, as an employee of a large French bank, i can only be jealous. Anyway, blog remains super

  • I am also very interested in HNA and especially Anbang which has about $300B total asset, no public report, and suddenly came to light only when facing trouble. Chinese $9.7B capital injection to Anbang mades me think about the capital injection of US to its banks in 2008.

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