2024: Frustrating and Bizarre

Portfolio overview december 2024 + weekly 01 2025

First of all, I wish you and everyone you care about all the best for the new year. More specifically, I wish us a fantastic year on the stock market, one in which the value of our beautiful, undervalued companies finally comes to light.

The turn of the year is always a good time to take stock. What happened over the past year? What went well, and what didn’t? What lessons can we draw, which investment decisions were wrong, and could we have avoided them?

Below, I’ll share more about the state of our portfolio and the lessons learned, but first, I want to reflect on a personal inventory.

Frustration

Over the past year, I’ve heard several times that my writing carried a certain tone of frustration. And that’s true: the frustration was real. That’s why I used this quieter period to reflect on where those feelings were coming from. As an investor, it’s crucial to recognize emotions so they don’t influence your decisions, allowing you to act rationally. This remains, even after 25 years of experience, an ongoing challenge.

Let me start with the easiest part. For me, 2024 was a year of significant internal struggle on a professional level. Thankfully, I can count on my wife, children, family, and friends for a stable and loving environment. Everyone stayed healthy, so in that sense, 2024 was a success. But professionally, it was a year full of challenges.

At the end of 2023, the collaboration with the publisher I’d worked with for over a decade came to an end. As a result, much of the past year was spent searching for a balance between writing and publishing an investment newsletter and my role as an investor.

Time and again, the investor in me wins. Although I’m aware that our specific style of investing—with a stronger focus on Europe—is commercially a poor choice for the newsletter, I simply can’t bring myself to write about other topics or companies purely to chase more clicks or subscriptions.

It would have been easier if 2024 had been a good year for investing. Then I could have focused on that. However, the combination of Europe and value investing turned out to be anything but successful for returns.

Increasingly, I get the question from subscribers and potential clients: why should I invest in individual European stocks when I could just buy the entire index and achieve better results?

I’ve often pointed out the dangers of today’s market and the parallels with the Nifty Fifty era, but I’ve noticed that even I’m growing tired of repeating myself. In my opinion, anyone who doesn’t see today’s risks or claims otherwise isn’t paying attention or has other interests—such as selling an investment newsletter. It frustrates me endlessly that some writers focus solely on sales, thereby contributing to the poor reputation of investment publications.

Yet my biggest frustration lay elsewhere. Normally, as an observer, I’d benefit from the bargains the market offers. But instead of celebrating these low prices, I found myself deeply irritated that our stocks weren’t being properly valued.

Honesty or oversharing?

As mentioned earlier, my income is heavily dependent on our investments. Our fund operates without a management fee, which means we, as managers, only earn if returns exceed 6% (after surpassing a high watermark). On top of that, the number of readers of the newsletter hasn’t been up to par due to the current market and the balancing act between being a publisher and an investor.

To make matters more challenging, our family moved in 2023. Our new home required significant work: additional insulation, modernization of systems, and adjustments to suit our taste. In other words, 2024 was marked by very low income and extremely high expenses. And that’s not even counting two kids already in university and a third heading off to college next year.

Renovation costs always exceed the initial budget, of course. Fortunately, we had built up a financial buffer beforehand to cover these expenses and offset the lower income.

What frustrated me most in 2024, however, was that I had to sell holding companies to cover these expenses. This left me without additional resources to take advantage of the bargains the market was offering. It created a constant internal struggle.

Still, I’m proud that I stayed on the rational path: investing in undervalued companies instead of gambling or trading. Even though, admittedly, the latter might have yielded better results in 2024.

Over the past few weeks, I’ve shared more personal matters than usual. My intention has been to provide an honest and transparent perspective, but I’m starting to wonder if I’ve taken it too far. I feel that I’m oversharing, so, it’s time to return to business as usual.

A Bizarre Year

One of our limited partners in the fund described 2024 as a bizarre year in the world of investing, and I think that word is perfectly chosen.

The global index climbed another 25% after what was already an exceptional 2023. But if we take a closer look under the hood, we see that only a very small number of stocks were responsible for this surge.

Even wars, high energy prices that have put immense pressure on the European economy (a crisis self-inflicted by our politicians), and the inauguration of a new U.S. president that left many holding their breath, weren’t enough to bring caution back to the markets.

Another bizarre phenomenon is the massive outflow of European capital heading to America. It’s well known that Americans, with their "greatest country in the world" mindset, show little interest in investing in Europe. But the fact that Europeans themselves are now turning their backs on their region en masse is remarkable.

It’s too simplistic to blame passive investing alone. When we look at the "favorites lists" or the most traded stocks among brokers, we always end up with the same well-known names. However, passive investors unwittingly reinforce this trend.

Takeaways for 2025

After twenty-five years of investing, I’ve noticed that many lessons need to be relearned time and again. One of those lessons is that the market can be irrational. We already knew this, of course, but 2024 served as a stark reminder.

Over the past year, our selection included five significant underperformers (not in the "Doubler Portfolio", which only launched on April 28, 2024, but in the broader, older selection), with losses ranging from -67% to -25%. This isn’t inherently unusual; we anticipate that one in three stocks in our portfolio will underperform. With 33 stocks at one point in our selection, this year it was closer to one in six. If we define underperformance as anything worse than -3%, we’re closer to one in three. However, we consider anything between -20% and +20% to be normal volatility for individual stocks.

The issue in 2024 wasn’t the negative outliers, but the lack of positive ones. In a typical market year, there are always a few stocks in our selection that see sharp gains. This year, however, they were absent. We did sell a few companies with quick gains of 25% to 40%, but the majority of our holdings remained stagnant. True high flyers were nowhere to be found.

This raises the question: Are we perhaps investing too cautiously? Has the market structurally changed, and do I need to adapt?

For now, I think it’s too early to draw that conclusion, but it’s something I’ll keep in mind as a point of focus in 2025. What is clear, however, is that there were moments when I could have been more aggressive in my buying and selling decisions.

• Example: Maersk
  With Maersk, I considered taking profits after a small additional gain. That gain didn’t materialize, and the stock quickly dropped, only to recover strongly later. In hindsight, I could have sold at that point and repurchased at a lower price.

• Example: Bellway
  With Bellway, the price came within less than 8% of my sell limit, only to fall below our purchase limit soon after. The stock is now trading just above that purchase limit again. This raises the question of whether Europe has become more of a trader’s market and if I should adjust my strategy accordingly.

We’ve already learned from Joel Greenblatt that in a typical year, the highest and lowest stock prices for companies—even for large, stable ones—often differ by more than 40%. For European small- and mid-caps, these swings are often even larger. Should we be taking greater advantage of this volatility?

What in 2025

Don’t Ask Me for Predictions. Which stocks will perform well and which won’t? Will AI and tech continue to dominate the markets? Will the industrial sector get more attention? Is Europe on the verge of a turnaround?

These are all questions I don’t have the answers to—and thankfully, I don’t need to. As long as we continue to invest in solid, undervalued companies, the rewards will come in time.

For 2025, I’ve set myself one key goal: to let go of frustrations and focus entirely on the companies. I genuinely enjoy analyzing businesses, so why not lean into that more? Part of this motivation also stems from wanting to showcase pride in our beautiful European companies.

How I’ll put this into practice, I’m not entirely sure yet. But I plan to start by compiling a list of European companies I’d love to own. I’m calling it BILTO: Businesses I’d Like to Own.

In addition, I’m sticking with the framework I began implementing in the final months of 2024:

• Tuesday: A general email featuring educational content, reflections, and company analysis.

• Thursday: A weekly update, including recurring monthly features such as:

  • Market overview

  • Portfolio discussion

  • Top five stocks to buy now

• Updates on our companies when relevant news arises

I’m also aiming to present a new investable idea every month. However, if the best ideas are already in the portfolio, I might revisit previously discussed opportunities.

Altogether, this means you can expect over 180 articles in 2025. Some will be brief, others more in-depth. With this clear plan in place, the roadmap for the year is set, and our schedule is well-filled.

Doubler Portfolio overview December 2024

For those not yet familiar with our Doubler Portfolio, read more about it here.

December: A Strange Month

December was a remarkable month, characterized by significant swings in our portfolio. After the drop in November, we saw an almost vertical rise, followed by an even sharper decline. Ultimately, the portfolio managed to recover.

When the portfolio launched on April 28, 2024, I already knew it would be a challenge to close the year in positive territory. We ended with a result of -2.3%. This was partly influenced by the fact that we took positions in two installments. With a minimum transaction cost of €15 per trade, we effectively started with a handicap.

Current Status

At present, 65% of the portfolio is invested. This is a good moment to begin comparing our performance to the indices. During a start-up year, such comparisons make little sense; a large cash position naturally causes you to lag behind when the market rises.

Our goal, however, remains unchanged: to double our capital in 5 to 7 years—with a clear preference for five years.

Let’s take a closer look at how our individual companies have performed.