$DBK (-1.86%) -headquarters in Frankfurt and a building in Berlin. Suspicion: money laundering

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After more than 25 years of negotiations, the EU and the South American economic alliance Mercosur (Brazil, Argentina, Paraguay, Uruguay) have concluded a historic free trade agreement. This creates one of the largest free trade zones in the world - with over 700 million people and a combined economic area worth around 22 trillion USD.

This agreement could trigger global economic and stock market effects - for companies, industries and investors.

_________________________

🛃🚢 What will happen to the Mercosur agreement?

• Tariffs on up to 91% of EU exports and 92% of Mercosur exports are to be gradually eliminated.
• The aim is to create a larger single market, better market access, simplified rules and more stable trading conditions between Europe and South America.
• Until now, high tariffs have applied to cars (approx. 35%), machinery (14-20%) and chemical products (up to 18%).

_________________________

📊 Possible effects on the stock market

📈 1. industries with strong exports benefit from higher demand

Europe can sell its products more easily in South America:

• 👩‍🏭 Cars & car parts
• 🏭 Mechanical engineering
• 🧪 Chemicals & pharmaceuticals
• 🪄 Electronics & high-tech

The elimination of customs duties and fewer trade barriers will increase the margins and competitiveness of these industries.

Possible examples of Frofiteurs:

• VW $VOW (+0.68%) BMW $BMW (+0.11%) Daimler $DTG (-2.86%)
• Siemens $SIE (+1.85%)
• BASF $BAS (-0.05%) Covestro $1COV (-0.08%)
• SAP $SAP (-16.71%) , ASML $ASML (-0.14%)

➡️ Expected share price impetus from higher export revenues and capped production costs.

_________________________

🍖 2. agricultural & food sector in focus

The agricultural business is also becoming more closely networked on both sides:

• Tariffs on wine, oil, cheese, dairy products and luxury foods are being reduced or gradually created.
• EU producers will gain greater market access in South America; conversely, South American agricultural exports (e.g. beef, sugar) will have better access to the EU.

Possible beneficiaries:

• Nestlé $NESN (+1.34%) Danone $BN (-0.69%)
• Heineken $HEIA (+2.22%) AB InBev $ABI (+2.04%)
• FrieslandCampina $FCEPL

⚠️ However, critics point out that price pressure on local farmers* also arises and environmental risks can increase, for example due to cheaper imports.

_________________________

🚗 3. raw materials & energy: medium to long-term effects

Mercosur countries export large quantities of raw materials:

• Soy, sugar, coffee, ethanol, grain
• Brazil is also a major supplier of crude oil and minerals

One of the aims of the agreement is more stable commodity trade with fewer tariffs, which can influence commodity prices and move the shares of commodity and energy companies.

Possible beneficiaries:

• Vale $VALE3 (-0.39%) Petrobras $PETR3 (+0.22%)
• Bunge $BG (+0.13%) , ADM $ADM (-0.48%)

_________________________

🏦 4. finance & services sector

The agreement also facilitates:

• Market access for financial services
• Opening of telecom and transportation markets
• Opening of public procurement to EU suppliers

➡️ This could strengthen banks, insurers and logistics companies that operate across borders.

Possible beneficiaries:

• Allianz $ALV (+0.62%) Deutsche Bank $DBK (-1.86%)
• DHL/Deutsche Post $DHL (+1.08%) Kuehne + Nagel $KNIN (+1.03%)

_________________________

🔄 Short-term market risks

Not everything is automatically positive:

• 🇪🇺 Agricultural protests in Europe show resistance to cheap imports.
• Political uncertainties remain - many parliaments need to ratify.
• Sectors with low competitiveness could come under price pressure.

_________________________

📌 Conclusion

The Mercosur agreement could be an issue with far-reaching effects:

✅ Strong export industry gains new sales markets

✅ Agricultural and luxury food sector gains sales opportunities

✅ Financial and service sector benefits from market expansion

✅ Raw material exporting countries in South America could become more integrated

⚠️ At the same time, there are risks for local producers and price distortions that could have a regional impact on share prices

_________________________

Question for you: What is your opinion on the agreement? And in which sectors or listed companies do you see the biggest winners in the long term?

_________________________

Sources:

- 🌎🤝 Mercosur-Freihandelsabkommen zwischen EU & Mercosur unterzeichnet – größte Freihandelszone weltweit

- 💶📈 Wirtschaftliche Chancen für EU-Exporteure und Importeure durch Zollerleichterungen

- ⚙️🚗 Branchenanalysen mit Zollabbau-Effekten für Maschinen, Autos, Chemie etc.

- 🌾🥩 Agrar- und Rohstoff-Impakte durch neue Marktchancen und Quotenregelungen

And it continues, this time with $CHWY (-2.16%) which has only recently found its way into my portfolio:

Morgan Stanley $MS (-1.16%) has left the rating for Chewy (NYSE: CHWY) to 'overweight'. The price target is $51.00 after $48.00 previously.

Unfortunately, I am not able to provide details on the rationale here.

An interesting assessment of $CHWY (-2.16%) was also found in an insight from Deutsche Bank $DBK (-1.86%) :

After several years of using excess capacity to increase margins, where do investors still find potential for margin improvement in 2026, and where do we expect the most solid return on investments to be scaled this year?

$CHWY (-2.16%) has the clearest path to incremental margin expansion within our universe of observations as the company moves out of the peak investment phase in 2025.

Source: investing.com (pro-subscription, so the articles are behind a paywall and I save myself the trouble of attaching them😉)

$DBK (-1.86%)
$MS (-1.16%)
$GLE (+1.2%)
$BAC (+1.5%)

Reading time: approx. 5-6 minutes

Many of my recent posts have focused on metrics that have been with investors for decades: EV/EBITDA, free cash flow yield, ROIC, margins. The price-to-book ratio also belongs in this category - but more as a historical relic than as a central management tool. Hardly any other key figure shows so clearly how far capital markets and business models have diverged.

The P/B ratio compares the stock market value of a company with its balance sheet equity. The logic behind this is simple: what do I pay on the market for what is "there" according to the balance sheet? In a world of factories, machines and warehouses, this was plausible for a long time. In a world of software, platforms, brands and data, it is becoming increasingly misleading.

Formally, the calculation is quickly explained. Price times number of shares equals market capitalization. This is set in relation to the equity from the balance sheet. A P/B ratio of 1 means that the market values the company exactly at its balance sheet book value. Below 1 was traditionally regarded as "intrinsic value", above 1 as a premium.

This is exactly where the problem begins: the book value is not an economic value, but an accounting residual item. It results from historical acquisition costs less depreciation - not from a company's ability to generate future cash flows. The more intangible, scalable and knowledge-based business models are, the less this residual item says about the economic reality.

This worked comparatively well in the industrial economy. Steelworks, energy suppliers, banks and insurance companies had large, clearly measurable assets. Machinery, real estate, loan portfolios - they all appeared on the balance sheet. Those who bought below book value were often actually buying substance with a margin of safety. Benjamin Graham and early value investors built entire strategies on this.

Today, this logic is only viable in niches. A modern software company invests massively in research, development, employees and marketing. As a rule, these expenses are immediately booked as costs. Equity capital barely shrinks or grows, even though enormous economic value is created: proprietary software, network effects, customer data, brand trust. The result is an extremely low book value - and therefore an astronomically high P/B ratio. Not because the company is "expensive", but because the denominator is structurally distorted.

A look at $MSFT (-7.33%) (Microsoft) makes this devaluation particularly tangible. Despite decades of profitability, enormous free cash flows and very high returns on capital, equity is comparatively low in relation to market capitalization. Research, software development and cloud infrastructure largely appear as expenses in the income statement. The economic value arises off the balance sheet. The double-digit P/B ratio is therefore not a warning signal, but an accounting artifact.

A similar picture can be seen at $V (+0.84%) (Visa). The company operates a global payment network, requires hardly any physical capital and still achieves exceptionally stable margins. At the same time, continuous share buybacks reduce equity, although they increase the shareholders' stake in the company. The P/B ratio rises - although neither the competitive position nor the cash flow stability deteriorate. Anyone focusing on the book value here is completely missing the point of the business model.

Conversely, a high book value can be misleading. A classic industrial group such as $TKA (-0.29%) (Thyssenkrupp) has large property, plant and equipment, long depreciation cycles and therefore a high balance sheet equity. At times, this results in very low P/B ratios, which appear favorable at first glance. In practice, however, they often reflect structural challenges: cyclical demand, low returns on capital and limited pricing power. The book value is there - the economic quality often is not.

At $GOOGL (-2.85%) (Alphabet), the discrepancy between book value and economic value is clear. Despite enormous cash flows, high ROIC values and one of the strongest brands in the world, equity is only growing moderately. Data, algorithms and network effects form the core of value creation, but hardly appear on the balance sheet. A P/B ratio comparison with traditional media or industrial companies is therefore meaningless.

Banks such as $DBK (-1.86%) (Deutsche Bank). Here, equity is central for regulatory purposes, the assets consist mainly of financial items and value adjustments have a direct impact on profitability. A P/B ratio below 1 can actually indicate undervaluation - or doubts about the quality of the assets. In this segment, the P/B ratio is not obsolete, but highly context-dependent. Without a deep understanding of the balance sheet risks, the multiple alone remains inadequate here too.

All these examples lead back to the core message: the P/B ratio does not measure value creation, but capital commitment. This is precisely why it has lost its explanatory power in the digital economy. It is backward-looking, while markets price in expectations about future cash flows, growth and risks.

This effect has become particularly apparent in recent years. Companies with high returns on capital and scalable models received valuation premiums - regardless of their book value. With rising interest rates, the focus shifted more towards profitability and cash flow quality, but not back to the book value. The benchmark changed, the P/B ratio remained marginal.

Does this mean that the P/B ratio is worthless? No. But its field of application is narrow. It can be useful for banks, insurance companies or genuine asset-heavy turnaround cases where substance can actually be liquidated. It is unsuitable for platforms, software and data-driven business models and is not suitable as the sole selling point.

Modern analyses therefore focus on something else: returns on capital such as ROIC, free cash flow yield, margin stability and growth. These key figures measure how efficiently capital is deployed - not how much of it is historically tied up.

This also closes the meta-circle of this series. Many traditional balance sheet ratios date back to a time when value creation was physical, linear and capital-intensive. Today, value is increasingly created through knowledge, software, networks and scaling. These values defy traditional balance sheet logic.

As a result, book value is not only becoming less important - it often tells the wrong story. Those who use it uncritically run the risk of confusing substance with quality or growth with overvaluation.

The decisive thought at the end: good investors do not ask what is on the balance sheet, but what a company will earn in the future - and at what risk. The KBV looks back. The market looks forward. That is precisely why it hardly counts any more.

In the end, the question is less about the "right" key figure and more about the right analysis tool. Which key figures do you primarily use today to classify the quality and valuation of a company? Where do traditional balance sheet figures still provide you with real added value - and where do you consciously turn to cash flow, return or growth figures? And more specifically: which key figures or correlations would you like to see more in-depth coverage of in the series?

$PYPL (-2.1%)

$DBK (-1.86%)

According to the Süddeutsche Zeitung, Deutsche Bank now processes a large proportion of PayPal's US payment transactions. transactions.

The majority of transactions - whether purchases or peer-to-peer payments - are said to be processed via Deutsche Bank's systems.

Deutsche Telekom $DTE (+0.77%) wants to enter the construction and operation of data centers for artificial intelligence (AI) on a large scale. Group CEO Timotheus Höttges announced in Berlin the launch of a joint project with the US chip company Nvidia $NVDA (-2.1%) in which a so-called AI factory is to be built in Munich at a cost of over one billion euros.

"Without AI, you can forget about industry," said Höttges. "Without AI, you can forget about Germany as a business location." The Deutsche Telekom CEO pointed out that only five percent of high-performance AI chips are currently used in Europe, compared to 70 percent in the USA.

Höttges emphasized that the data in the Munich AI cloud should remain entirely in Germany. Only employees from Germany and Europe would be used to handle the data. And the technology comes from Germany and the USA. This means that there are no longer any excuses for German and European companies not to use AI on a large scale.

》Great day for Germany and Europe《

Federal Digital Minister Karsten Wildberger (CDU) spoke of "a great day for Germany and for Europe". "We are celebrating an investment with a signal effect: more than one billion euros for an AI factory with the most modern chips in the world." But this is more than just an AI factory for industry. "It is a signal of new beginnings. A further step on Germany's path to resolutely exploiting the opportunities offered by artificial intelligence."

In Berlin, Nvidia CEO Jensen Huang recalled that the concept of Industry 4.0 was developed in Germany. "Germany had this vision of connecting the digital world with the physical world.

With AI, we can now bring a super version of Industry 4.0 to life. And this is a new era, namely industrial AI." Nvidia is the world's leading provider of high-performance chips that are essential for training and using AI.

Deutsche Telekom is already a provider of conventional cloud services and operates over 180 data centers worldwide. At the same time, the Group cooperates with large platforms such as Google Cloud, Amazon AWS $AMZN (-1.86%) or Microsoft Azure in the cloud business.

However, Deutsche Telekom's economic success is driven by its core business with telco services in Europe and the business success of its US subsidiary T-Mobile $TMUS (+1.32%) business success.

》Part of a larger AI strategy《

The AI data center in Munich's Tucherpark is just the start of a larger-scale AI strategy at Deutsche Telekom. The Group hopes to be considered for a major European Union funding program for so-called AI Gigafactories.

The EU defines a gigafactory as a data center with 100,000 or more special AI chips (GPUs) - the facility in Munich will only run with 10,000 GPUs.

In order not to lose touch with the future topic of AI and at the same time remain independent of US companies such as Open AI, Google $GOOGL (-2.85%)Microsoft $MSFT (-7.33%) and Meta $META (-0.11%) Brussels is planning to promote the construction of four to five such large data centers.

The interested parties from Germany were unable to agree on a uniform application. Therefore, in addition to Telekom, the Schwarz Group, which is behind Lidl and Kaufland, the cloud provider Ionos $IOS (-7.83%) and other consortia.

Federal Research Minister Dorothee Bär (CSU) emphasized the importance of this initiative. At least one AI Gigafactory must come to Germany.

With the Bavarian AI factory, Deutsche Telekom is primarily targeting users in industry.

The first customers include Agile Robots $AGL (+0%)a leading German high-tech company that specializes in AI-controlled automation solutions and intelligent robotics.

In addition to Nvidia, other cooperation partners include Europe's largest software company SAP $SAP (-16.71%)Deutsche Bank $DBK (-1.86%) and the AI provider Perplexity.

Used the price slide to take an inliner 👌

If Deutsche Bank $DBK (-1.86%) does not fall below € 27 and does not exceed € 35 by November 21 of this year, there will be a return of almost 200%...

I am currently of the opinion that I am in a good position with my investments for the current status. (approx. 1 year of investing)

Now to the individual stocks! 🧐

My main ETF $IWRD (-0.84%) :

Currently, the iShares MSCI World is my biggest stock - but also my biggest problem (at least in my opinion). It's currently too much of a cluster risk for me, as I'm invested in North America with around 55%. 😣

My second ETF $XMME (-1.56%) :

I try to minimize this cluster risk with this ETF. 70/30 strategy... 😛

The China giant $1810 (-0.07%) :

As I really like the current status of the company, I am following developments with interest and the purchase price was very attractive for my financial means, I bought it. With satisfaction. Of course, I also did it to further minimize the cluster risk. So... hopefully I'll be able to sell at a profit at some point! 😇

A bigger gamble $TTWO (-2.12%) :

Well... what can you say... GTA 6 will probably blow everyone away. Of course, I'm aware it's only a small percentage, so either pay the lesson or get lucky. ☘️

My first solid stock with dividend prospects $KO (+0.9%) :

Everyone knows it, everyone has bought it. There's nothing to say about CocaCola. 🥤

My second solid div. stock $SHEL (+2.21%) :

I was able to get in cheap, the company is huge and stable. ⛽️

The bank share $DBK (-1.86%) :

I'm with DB, extremely happy with it and was able to strike it cheap at the time. So far it's done quite well and there are always a few dividends! 💰

And finally... the more or less ugly duckling $SLI (-11.34%) :

The little gamble that turned into my first doubling. One can only hope. Stability is not exactly the hobbyhorse. 🦆

And now for my future thoughts!

I am currently interested in $DTE (+0.77%) (approx. worth €300-400) and letting them run with a savings plan. On the one hand, of course, to further balance out the cluster risk and on the other hand, to somewhat delimit the Asian theme.

My next consideration is $CL (+0.87%) as it currently has an interesting entry price.