value and opportunity

In the first 6 months of 2026, the Value & Opportunity portfolio gained  +8,1% (including dividends, no taxes) against a gain of +6,2% 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.

Performance review:

As mentioned in the last 12M review, I decided to do only one midyear review instead of 3 quarterly ones.  

Relative to my European focused Benchmark, the first 6 months were pretty Ok. In absolute terms, once again I was lucky not to have had a Crystal ball at the beginning of the year. 

With the Iran war, the Strait of Hormuz still being closed and inflation ticking up, I would have not thought that stock markets would be up in the first 6 months.

Some of my positions disappointed, such as EVS, Wise or the Active Ownership Fund (once again). However, my bigger positions, especially Jensen, Eurokai, Bombardier and DCC did well.

For the record, this is the monthly development of the relative performance for 6M/2026:

For the first 6 months, the portfolio performed as intended: Lower drawdown in bad months but also less upside in good months. As I have mentioned several times over the years, I feel better having less than market volatility in my portfolio.

Going forward this will be not only about feelings but also a necessity as I will soon enter the “harvesting” period in my investor career. Which means more money will flow out of the portfolio than inflows which makes it even more important to manage volatility. But more on that at a later time.

Last year in the 6M review, I wrote about changes to my investment process. This was the essence of what I wanted to achieve:

I have implemented everything now in my investment process. Did it help ? Hard to say, because a short term performance record is subject to a lot of random noise. 

One thing I can say is that my portfolio would look differently if I had not implemented these changes. I might not have bought for instance more Eurokai, Jensen and Bombardier. I might have added to EVS instead after the share price dropped or actually sold some of the larger positions.

So far, I “feel” that these changes help me focus better but of course this could turn out to be wrong. To be continued.

Transactions 6M 2026:

The current portfolio can be seen as always on the Portfolio page. Cash is currently around 9% of the portfolio.

I exited Special Situation Bois Sauvage after a decent run up as well as SFS which I found too expensive in relative terms. I also sold my little bet in Sixt common shares, SAMSE and Laurent Perrier.

I bought and sold as Special Situations BioNTech and Rocket Internet.

New positions were Frosta, Bachem, Norma and 7C Solarparken. I added to Frosta, Gerard Perrier, Frosta and recently Sixt. I reinvested the gross dividends into Eurokai and Sixt. I reduced my EVS position after the quite disappointing outlook and the exit of the CFO. In addition, I also reduced STEF mainly because of their cutting the dividend. Both, STEF and EVS declined significantly in my internal ranking which makes it difficult to justify a large position.

In addition, I also decided to quit the Active Ownership Capital Fund and sent a cancellation order which will be executed by year end.

Current Cash levels are at around 9,3%, the largest 10 positions sum up to 56% with the top 3  totalling 25%,

Random ramblings: AI winners vs. losers, European AC, Volkswagen & Football 2026 Worldcup

AI winners & losers

Despite some setbacks, the “AI trade” is still strong and I think very few people now seriously doubt that the AI revolution is for real. Sometimes it is hard to believe that only 3 ½ years ago, the world experienced the “ChatGPT” moment when the first version of OpenAI’s chatbot had been released and this crazy journey started.

What I find very interesting is how quickly the favorites have changed on the “front end” side of things. Initially, everyone agreed that OpenAi and Microsoft would be the winners in this game among the big Hyperscalers. Microsoft secured early a big stake in OpenAI and immediately tried to integrate it into a product called “Co-Pilot”. The same playbook they used for instance to crush Zoom with Teams. “Distribution always wins” was the early verdict.

Now, It currently looks like Alphabet/Google is winning on the retail side and Anthropic on the B2B side if the current US Administration will let them do so. OpenAI, the “first mover” on the other hand seems to be pushing its much anticipated IPO into 2027 and Anthropic might not want to IPO either, as at any second, the US Administration could try to kneecap them again.

Microsoft’s Copilot is only used by people who have no other choice. Despite Microsoft having sold 20 million seats, some sources say that only 20-30% of those seats are used on a weekly (!!) basis.

Looking at the “Mag 6 (ex Tesla)” stock charts since November 2022, the best trade was clearly Nvidia which is no surprise. But Meta, which clearly has not been very successful at the AI business, is clearly number 2.

Meanwhile the initial clear winner, Microsoft, is the worst performer. Even Apple, which so far has done very little on the AI side, is doing better.

For Meta, part of the explanation is clearly that they were trading historically cheap in autumn 2022 at around 10x LTM EV/EBIT. On the other hand, they also tripled EPS from 2022 to 2025:

Microsoft in comparison traded at around 20x EV/EBIT in Autumn 2022 and is now trading at a slightly lower multiple:

And more importantly, EPS “only” increased by less than 100% depending on where you make the cut-off.

So what I want to say here is that even looking at the Hyperscalers, starting valuation and EPS increase are at least equally important than the pure story telling. 

We are still early in the race and so far, the “first mover advantage” didn’t really seem to have worked out for Microsoft and AI. I guess we will see in the next years if maybe even Apple’s approach of wait and see is maybe the best one ? Prof. Damodaran even praised them with an article called “An ode to restraint”. In my opinion, the winners of this “platform shift” are clearly not carved in stone and maybe we will see completely new players in the next few years and don’t forget the Chinese players.

On the other side, with all the Capex, the risk on the side of the Hyperscalers clearly increases, especially if they are not among the winners.

European AC & Climate adaptation

During the recent heat wave, my Twitter feed was full of posts that “Europeans are too stupid” or too poor to have AC.

As always, generalizations like this are generally extremely stupid (with the exception of this generalization of course). While I am writing this, we have heavy rains and ~20 degrees Celsius and the worst seems to be over for now.

But behind that stupid discussion, there lurks an “unconvenient” truth: The climate is getting warmer and half a degree more on average in a year unfortunately does not mean half a degree more every day but more and more very hot days in summer.

20, 30 years ago, there were maybe 2-3 really hot days in Summer, now it is maybe on average 11 and still increasing:

This is surprisingly (or not) a bigger problem in the more moderate climate zones like central Europe than in the North or in the South of Europe. Anyone who has actually travelled in Europe for the last 20-30 years knows, that the poorer Mediterranean countries like Portugal, Spain, Italy or Greece are very well equipped with AC. Summers were always hot in Italy and that’s why Italians are at the Beach in July and August and only stupid tourists are walking around on foot in Rome and complaining.

The problem is clearly much more in areas like Southern/Middle Germany for instance. The Rhine basin where a lot of the big population centers are in Germany is generally a relatively warm region. Traditionally they have always been wine growing regions unlike for instance Bavaria where I live or Northern Germany near the coast,

Really hot days in a row, where the temperature does not go down at nights are clearly a strain without air conditioning.

The average age of residential buildings in Germany is around 40-50 years. That means they were built in a time where on average there were only half the hot days that we have now. In addition, a lot of renovations increased the “vulnerability” like increasing window size or remodelling roof storage units into apartments.

Many homeowners that I know have already installed AC in the last few years. However, one of the issues in Germany is that more than 50% of Germans are renters and installing an AC in a rental unit is much more difficult.

In addition, a lot of public buildings still get built without AC and authorities are really slow to retrofit AC in public buildings. This in my opinion is the real issue: Hospitals, old age homes, schools etc. need to be upgraded as quickly as possible. On the weekend, there was an “open house” of the brand new Fire Brigade building in my neighbourhood and of course it does not have AC.

According to some articles, an existing program to fund AC in public buildings has been actually cancelled for 2026 by the current Government. As always, there is a struggle between local authorities and the Central Government who is responsible.

But AC is only a part of the story. The much more inconvenient part of that story is that Global Warming is real, that countries with relatively moderate climates are not well prepared and that the lack AC might only be the tip of the iceberg. In the past few years, we already had some really dry summers that led to pretty bad harvests for instance.

Climate adaptation is a much bigger topic than just installing more AC units. I think even the hardcore Greens are beginning to understand that one has to face reality and cannot only dream of stopping Global Warming but really make an effort to compensate for the effects. 

Right now, everyone is looking for more exposure to AC manufacturers, but in my opinion a company like Thermador which specializes in irrigation components also plays an important part in helping with climate adaptation. The stock chart already shows some life in the past few days:

Volkswagen

Volkswagen made a big wave this week that they are planning to “fire” up to 100K workers. As with the German National Football team, each and everyone seems to know exactly why Volkswagen seems to be doing so badly.

The main culprits mentioned are often the Decommissioning of the Nuclear plants in Germany or the EU guidance to not allow Internal Combustion Engine (ICE) cars to be built from 2035 onwards and the general laziness of German workers.

From my perspective, Volkswagen troubles are more a function of the following factors:

1. Legendary bad Corporate Governance: With the Government owning a “golden share” and the Porsche/Piech families not really knowing what to do, the only common denominator for a long time was just size which is never a good strategy in the long term
   
2. Too many brands that are hard to differentiate (VW, Audi; Cupra, Skoda…..)
   
3. The combination of US tariffs, JPY/KRW devaluation and cratering sales in China
   
4. The unwillingness and inability to fully compete with Chinese EV makers, reducing the profit in China from 5 bn EUR p.a. at its peak to currently below 1 bn EUR
   
5. Difficult footprint for accessing the US market (no Northern American plant for Audi/Porsche), Volkswagen is only in Mexico)
   
6. The inability to offer state of the art software for their “premium cars”
   
7. Badly managing their premium Sports car brand Porsche which became more and more similar to Audi 

If we look at the stock chart of the big 4 remaining European car makers, we can see that we have two groups: The bad and the ugly:

BMW and Mercedes are kind of hanging in there but Volkswagen and Stellantis are both struggling. Interestingly, until early 2025, Stellantis looked like the superstar, but that did not last long.

If we compare Toyota and Ford with the German players, we can see that especially Ford jumped from the Group with Mercedes and BMW into a new Group with Toyota.

My guess is that the market is pricing in the protection for Ford in its US home market via Trump’s “liberation day” tariffs.

In any case, there is no easy and quick solution for Volkswagen. If I have counted correctly, Volkswagen (incl. Audi) has ~13 or 14 main plants in Germany compared to BMW which only has 4. Per employee, BMW and Mercedes generate more than 2 the amount of sales than Volkswagen.

So if Volkswagen wants to remain competitive, they need to do some slimming down now or things might even get worse in the future.

From a pure tactical perspective, I guess Management may have mentioned a larger number than what they are aiming for in order to give the Trade Unions and the Government some kind of “sacrifice” during negotiations.

Overall, I see this as a necessary step. The worst case in my opinion would be if they are not able to increase productivity due to political interference. This would be really bad mid- and long term, not only for Volkswagen but for the whole economic complex around it.

For the record, I would ever invest into Volkswagen. Yes, they have a lot of interesting assets, such as the large engine manufacturer Everllence, of which they just sold a majority stake for around 7,5 bn EUR, but as the exampüle of ThyssenKrupp shows, with a bad Governance this will not translate into decent mid- and long-term shareholder returns.

It hink the only remotely interesting listed asset of the Group would be Porsche (the manufacturer, not the holding), if they were to become more independent from Volkswagen.

Football World Cup

With a one day period to stomach the loss against Paraguay, a few (maybe unqualified) thoughts on the 2026 Word Cup:

• Overall, the decision to let more teams play in this final tournament was in my opinion a pretty good one, although I didn’t like it in the first place. A lot of interesting teams that might otherwise not make it to the finals played really well (e.g. Paraguay, Cabo Verde or most African teams)
  
• Although people don’t seem to like the Hydration breaks, I personally find it quite convenient to have a quick break to get something to drink myself.
  
• The new rule to require an “injured” player to stay out of the match for 60 seconds is a really good rule. It limits these situations very much which were very common in the knock-out matches before when one team had a narrow lead and suddenly players were falling like flies.
  
• The quality of the matches on average is pretty good. I watched a few matches so far (with convenient starting times) and they were all very good and enjoyable.
  
• In general there doesn’t seem to be a big skill difference at overall team level between the best 30 teams or so. So far, the main difference really has been the exceptional performance of some of the Superstars who then really make the difference
  
• Teams like Germany (and Italy or Uruguay) are at the moment really lacking these individual Superstars which might explain the lack of success for those traditionally strong football nations.

• The only negative is that for Europeans, the starting times of the matches are sometimes very inconvenient. On the other hand, the availability of summary videos on the next day compensates to a certain extent.