October 2024 Portfolio & Performance Update
I want to share a performance update alongside the usual commentary in today's update.
I published my deep dive on Edenred (second part link) in October, a quick pitch on a German Industrial/medical supplier in a secular growth market, which I’ll further research, a quick pitch on an asset-light US micro-cap, an update on ASML after the crash and a few investment ideas.
The publication continued to grow, adding 196 subscribers and almost 2,000 followers. Thank you for all the support.
Portfolio Update
As I already teased in this post and my deep dive, I sold half of my Pluxee position to invest it in Edenred. After researching the company, I noticed that it is of similar quality as Pluxee, has a wider diversification and has shown better capital allocation decisions recently than Pluxee. With a basket approach, I’m betting on the sector rerating and not just on an individual company. This removes individual execution risks from the investment and spreads my bet.
I also aggressively bought the dip on ASML, almost doubling my position at this cheaper price. ASML is a volatile stock that is often the target of near-term uncertainties. By being patient, the stock often opens opportunities, and I believe it is at a fair/undervalued price right now. Additionally, I bought more shares in Hermle as the company continues selling off. The situation in Germany doesn’t look great, but Hermle is a cheap, high-quality global business operating with secular tailwinds in a cyclical industry.
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Performance update (YTD and since inception)
October was another lousy month from a performance point of view. The portfolio lost five percentage points, compared to a flat S&P 500 and -2.5% for the Stoxx Europe 600. Amazon (+10%), Nemetschek (+7.5%) and Atkore(+3.5%) were the top performers in the month. ASML (-13%), Lifco (-8%) and Hermle (-8%) were the top detractors.
I want to share an update on my longer-term performance. To compare my portfolio against (black), I used the S&P 500 (yellow), Nasdaq 100 (turquoise), Stoxx Europe 600 (red) and MSCI Quality factor (dark blue) as benchmarks.
Year to date, my portfolio underperformed all benchmarks with just 8% of gains. The best performer was the Nasdaq with over 20%. We can also see that my performance started strong and matches until June. That is when we can see a large divergence between my portfolio and the Stoxx Europe benchmark and the global/American indices starting. In the last months, I’ve had a streak of bad luck on top of European valuations falling further as American valuations rise. With Napco and Atkore, two of my larger holdings were hit hard by short reports, and while Napco recovered a bit and is only down 22%, Atkore has not moved up from its bottom, down 42% since June. Alimentation Couche-Tard has also struggled since the company announced its interest in the mega acquisition of Seven and I holdings. From Europe, I’ve seen significant losses with Hermle (-20%), Plxuee (-42%) and Frosta (-8%). My winners, like Sartorius Stedim (23%), Mercado Libre (20%), Nemetschek (20%) and Adyen (19%), did not manage to offset the losses, leading to YTD underperformance.
After two years of outperformance (2022 and 2023), I have given up most of my alpha over the indices. My portfolio got beaten by the Nasdaq (31% versus 30%) but is still beating the S&P 500 (21%), MSCI World Quality (25%) and Stoxx Europe (15%) since the start of 2022, according to Parqet. I don’t like comparing performance too often because I believe performance chasing makes us worse investors. Over the long term, fundamentals will prevail, and I’m confident that my portfolio looks good here. Time will tell if I can sustainably outperform and I hope to see you along for the ride.
Great article
Great article