Performance review 6m 2023 – “AI has saved the day”

Within the first 6 months of 2023, the Worth & Alternative portfolio gained  +5,0% (together with dividends, no taxes) towards a acquire of +12,8% for the Benchmark (Eurostoxx50 (25%), EuroStoxx small 200 (25%), DAX (30%), MDAX (20%), all TR indices).

Hyperlinks to earlier Efficiency opinions might be discovered on the Efficiency Web page of the weblog. Another funds that I comply with have carried out as follows within the first 6M 2023:

Companions Fund TGV: 3,6percentProfitlich/Schmidlin: 16,6percentSquad European Convictions +7,6percentFrankfurter Aktienfonds für Stiftungen 6,9percentSquad Aguja Particular State of affairs +5,3percentPaladin One -0,8percentAlphastars Europe + 11,4%

Efficiency assessment:

General, the portfolio efficiency was within the decrease third of my peer group. Because the peer group is usually Small cap targeted, the general relative low returns correspond with the returns of European small cap indices and are mosly properly beneath Massive cap indices. Trying on the month-to-month returns, it’s not troublesome to see that particularly January and June have been in relative phrases very disappointing.

Particularly within the final 2 weeks or so, some positions have been topic to very “indiviual” impacts, comparable to ABO Wind and their thought to rework themselves right into a authorized construction (“KGaA”) that might curtail shareholder rights, or Sto that was impacted negatively by a really weak outlook from competitor Steico. Or Thermador, which suffered for no apparent cause.

That this 12 months could be a troublesome one in relative phrases was already clear from January. I nonetheless assume that the portfolio presents nice potential, however brief time period share worth momentum is clearly not superb for a lot of of my positions. Fortunately, I don’t must care in any respect about brief time period developments, I’ll proceed to give attention to the mid- to long run which, I hope, will deliver good outcomes.

2023 is a kind of years the place I’m very joyful that I don’t handle third occasion cash. I can solely think about what sort of discussions I would wish to have with purchasers who wouldn’t perceive why the efficiency is thus far behind the benchmarks. Fortunate me !!!

Transactions Q2:

The present portfolio might be seen as at all times on the Portfolio web page.

In Q2, I bought Rockwool and Recticel after my deeper dive into insulation corporations. Rockwool at a acquire of ~28%, Recticel at a lack of -9%. The second half of the 12 months might be robust for European constructing corporations, so perhaps there’s a likelihood to extend the publicity to chose gamers.

I additionally exited VEF because it grow to be in some way to small to hassle at a lack of ~-10%. This had been a pleasant winner in between however today, Fintech seems like a lifeless duck. Nonetheless I’ll hold monitoring them. I additionally bought extra Meier & Tobler because the share worth is above my mid time period goal.

There have been no new positions, solely place will increase in Schaffner and Sto.

Remark: “AI has saved the day”

What a distinction 9 months make. In Q3 2022, issues seemed very dangerous for something associated to expertise. The Covid increase was over, Tech corporations have been lowering their forecasts and slicing jobs and Nasdaq share costs have been kind of in free fall. In retroperspective, all of this most definitely modified with the November thirtieth launch of ChatGPT.

ChatGPT not solely grew to become the quickest rising client app with extra then 100 mn signal ups after 2 months, it additionally injected new life into the tech sector. “Generative AI” as it’s now identified is meant to be the “massive subsequent factor” that may make everybody’s life a lot better and convey enormous quantities of cash to Tech corporations.

As at all times, the massive Tech corporations gained most, as traders contemplate their moats so sturdy that they may win even when they don’t have a devoted product like Apple. Within the wake of the Large Tech corporations, additionally a variety of the “fallen ShitCo Angels” have made some spectacular positive aspects and the standard “ShitCo Tech Bros” have a good time themselves for 2023 positive aspects on FinTwit.

“Generative AI” appears to have woke up investor’s animal spirits in file time and even in early stage VC, the cash begins flowing freely once more like this 105 mn Seed spherical for a 4 week previous AI start-up from France.

To not be outdone, German traders are already flocking again to newly listed Shitcos like ParTec which mixes (after all) Quantum computing and AI.

Marc Andreesen from A16Z already annonced in early June that “AI will save the world”. For now, AI has clearly saved the world for Enterprise Capitalists and Tech Buyers. Lately I used to be pitched by a VC claiming that Generative AI and Blockchain are inseparable and due to this fact Blockchain will come again with a vengance, too.

Personally, I’m not 100% certain if and the way justified the present AI hype is. This is primarily based on my commentary of the primary AI Growth that occurred round 4-5 years within the VC world.

Even again then, each startup claimed to have superior AI capabilities. A few of these start-ups like Lemonade and Upstart made it to the inventory change. Now after a few years it has grow to be fairly clear, that these AI capabilities have been nice on paper however sadly didn’t result in a superior consequence in enterprise efficiency for no matter cause. One other a lot hyped AI case, Self driving vehicles, additionally turned oput to be a lot more durable than initially thought and other than some native successes, full self driving appears nonetheless a few years away.

One other commentary is the next: Most of the present AI supporters like A16Z, Sadya Nadella or others declare that AI might be this good “Copilot” for people, serving to us to reinforce our skills and no hurt might be performed to anybody.

Nonetheless, after I was studying the accessible AI literature 5 years in the past, most authors agreed on one factor: AI will develop and iterate at a digital velocity. So as soon as AI is sweet sufficient to essentially assist us in many various conditions, it’s inevitable that AI will be capable of these items in a really brief time with out human assist as it would iterate extremely quick. My recommendation for younger folks could be: Don’t aspire to grow to be a “Immediate Engineer”, that occupation received’t final that lengthy in any case.

So for the longer term we can have most definitely two eventualities and I’m not certain which is extra seemingly:

AI capaibilities, regardless of ChatGPT and Midjourney are nonetheless rudimentary and it’ll nonetheless take a very long time till they actually make a distinction OR

AI capabilities are already far superior and in very brief time AI primarily based algorithms will create havoc in lots of areas of life

Possibly I’m too pesimistic right here, however I don’t see the light, “save the world” properties of AI but. The one clear winners of the present hype are clearly VCs and the “tech ShitCo Bros” who’re capable of pump the subsequent technology of ShitCos.

In the intervening time, I personally I really feel extra comfy with “brick and mortar” enterprise fashions which might be laborious to exchange with AI than something that could possibly be impacted severly comparable to Software program.