Hi,

My first post here. Glad to see that there is a very active community here.

Started trading exactly 2 years ago and made good returns with stocks like $RHM (-1,89 %)
$RCL (-3,06 %)
$NVDA (-3,63 %) achieved good returns.

But what's next?

I am in many individual stocks. What I lack is an exit strategy. Does anyone have any tips on how to go about this?

I would also like to move more towards ETFs, I am hardly interested in the classic MSCI World. I would like a little more excitement or focus. Any ideas?

I look forward to your feedback.

The defense industry is currently experiencing a boom, and the shares of Rheinmetall ($RHM (-1,89 %) ) and HENSOLDT ($HAG (+0,92 %) ) are at the forefront! 📈 Analysts are optimistic and have raised their price targets for Rheinmetall to up to 1,085 euros. The reason? "Tectonic shifts" in European defense policy, which are being reinforced by pressure from the USA.

The challenges facing Europe are enormous: rising defense spending, the reconstruction of the Ukrainian army and military support following a possible peace agreement. This could further boost growth in the sector.

Rheinmetall's DAX share price even touched the 1,000 euro mark for a while before falling slightly. In the current year, it has already gained 55%! What do you think of this development? Is now the right time to invest, or should we wait and see? 🤔

In reference to my post last week: now that the chance $RHM (-1,89 %) to get below €700 is now behind us, we are approaching €1000 very quickly. An increase in sales of 20% p.a. for the next 10 years is not yet fully priced in. After the MSC, I also assume that KNDS will not be able to meet the demand for the Leopard 2 A8 and that the BW will either homologate the Panther from RHM after the Italian army or that RHM will manufacture parts of the Leopard 2 A8 in a joint venture for KNDS. Above all, the chances of a massive increase in margins, which after 1991 $RHM (-1,89 %) were historically poor due to the procurement policy and export restrictions, I have raised my personal price target from 2000 to 2500 by 2032. Here I see opportunities to pass on sales increases by a factor of 1.5 to profits. I will continue to buy until 1200.

The euro has been weakening since September 2024 and is approaching parity with the dollar - the currency ratio would then be one to one. The dollar is currently still worth around 1.04 euros, up seven cents in the fall.

German companies with strong business in the dollar area can benefit from this development in several ways.

"The strength of the dollar is good news for exporting German companies," comment the analysts at Baader Bank. This is because their products are comparatively cheaper in the USA.

A weak euro makes exports cheaper, making European products and services cheaper and more competitive in the dollar area and thus in large parts of America and Asia. Import duties in the USA would make products more expensive again - but in the end, the two effects could almost balance each other out.

For example, the medical technology group Siemens Healthineers $SHL (+0,45 %) is hardly worried about the threat of import duties in the USA. The company shares the fear of a global trade war. However, the company expects that the headwind from tariffs and the tailwind from the stronger dollar will largely balance each other out, says CFO Jochen Schmitz.

The tailwind from the strong dollar could remain with companies for a long time to come. "The euro will become a really weak currency. It should quickly fall below parity with the dollar and be at 0.95 euros per dollar quite quickly," expects the well-known fund manager Jens Ehrhardt, founder and CEO of DJE Kapital.

The European Central Bank (ECB) expects the strength of the dollar to ease the burden on exporting companies in the event of possible import tariffs in the USA. ECB Governing Council member Pierre Wunsch says: "The euro would have to be brought to parity in order to essentially compensate for a tariff of ten percent."

The many companies that produce locally in the USA and sell their goods there also benefit from a strong dollar. This is because the effect on the balance sheet is even stronger as soon as companies convert their earnings generated in the dollar zone into their home currency. For every dollar earned, there are currently seven euro cents more than in the fall.

Companies are already feeling the effects. For example, Infineon $IFX (-1,86 %) raised its forecast for the current financial year a few days ago. Previously, the Munich-based semiconductor manufacturer had assumed a slight decline in turnover. The DAX-listed company now expects stable to slightly increasing revenue in 2024.

One reason is the strength of the dollar. Infineon is now assuming a euro-dollar exchange rate of 1.05 euros this year - after previously assuming 1.10 euros. "This adjustment and the better exchange rate in the first quarter increase our revenue expectations by around 450 million euros," calculates Group CEO Jochen Hanebeck.

The estimates show: The biggest currency beneficiaries of a weaker euro are highly globalized companies with strong business in the dollar area. In addition to Infineon, these include $BAYN (+1,43 %) Bayer with its strong US business and the DAX heavyweight Airbus $AIR (-3,2 %). The European joint venture mainly builds aircraft in Germany and France, but they are sold worldwide at dollar prices.

Rheinmetall $RHM (-1,89 %) also benefits: Armaments are usually invoiced in dollars, but the Düsseldorf-based group reports them in euros, which results in higher revenues from the conversion alone.

There are also profiteers in the financial sector. Deutsche Bank $DBK (+0,12 %) CFO James von Moltke hinted at the outlook for 2025: There is potential for higher Group revenues than the 32 billion euros targeted so far, he said. So far, the bank has been planning with an exchange rate of 1.10 dollars per euro - i.e. a euro that is more than five cents stronger than it is currently worth. However, as Deutsche Bank has more income in dollars than costs in dollars and does not hedge this currency risk, it benefits from a weak euro, according to Moltke.

The weak euro also helps the automotive industry. Many luxury vehicles are produced in Germany, but sold worldwide, especially in the USA. Porsche $P911 (+0,35 %) sells every fourth car there - but does not produce a single one.

"This will have a positive impact of several hundred million euros on Porsche's balance sheet," says a Frankfurt stock trader with a view to this year's results. However, US tariffs on imports of European cars could offset this positive effect.

Source & graphic: Handelsblatt

As I had already assumed in a post before the MSC, there was another chance this week $RHM (-1,89 %) to get in the € 700 range. This should finally be behind us. It is now clear that the conventional defense of European territory must be provided by European NATO and EU countries. This was made clear by Lindsey Graham and JD Vance in Brussels and Munich. Strategic nuclear deterrence was explicitly not mentioned - which I find significant and remarkable. Here I believe in a common European capability in the medium term. The decisive factor was UvdL's announcement that defense budgets will be excluded from the evaluation of the euro deficit criteria in future. In other words, euro countries will be able to run up maximum debts within the framework of their national regulations. Merz announced today that he will implement this if he becomes chancellor.

I assume that the acceptance framework agreements for the main procurement projects will be concluded immediately after a government is formed. This includes the army air defense, which was decommissioned with the army reform in 2006 and 2012 and was previously attached to an armored division or armored infantry division as an independent support unit the size of a battalion. The task of the army air defence is to follow the armored, mechanized units on the march and in combat and to provide air defence in close range. This was covered by Gepard and Roland when I was active. After decommissioning, these were exported - the remaining stocks were handed over to the Ukraine.

With the resumption of the concept of independent large units at brigade and division level and the return to highly mobile, large armored units, army air defence is probably the most urgent procurement challenge for the Bundeswehr and its allies. This applies in particular with regard to the completely changed situation caused by UAVs and FPV drones with AT warheads. Especially with regard to a cost/benefit analysis.

US manufacturers are largely blank here, as US doctrine basically presupposes absolute air superiority in order to operate with ground troops. There is practically no mobile army air defense system comparable to the Gepard. Especially in terms of cost/benefit.

$RHM (-1,89 %) Skyranger is by far the best modular close-range system, especially for drone defense, based on the GTK Boxer with Oerlikon 30 mm cannon. I leave a detailed description to the website.

https://www.rheinmetall.com/de/produkte/flugabwehr/flugabwehrsysteme/mobile-flugabwehr-skyranger

Rheinmetall has practically a monopoly in the field, solely due to this development lead and the production of all types of ammunition for the 30mm Oerlikon, which began last year in Unterlüß.

I assume a super cycle over the next 20 years, analogous to the development of the Bundeswehr in 1966-86 with production figures of up to 500 units per year for wheeled and tracked vehicles. (In the build-up during the Cold War, 14,500 units were produced by KMW and RHM without exports).

The Bundeswehr procures national and European products for the army. But here RHM is excellently positioned with Leonardo. International procurement will be necessary for the Ukraine as the industrial capacities at KNDS and RHM are inadequate from today's perspective.

By the way $RHM (-1,89 %) already produces more 155mm and 30mm ammunition than the rest of the European NATO countries combined.

I am invested with just under 2% in the portfolio, but will steadily increase it if possible. I expect constant sales growth of 20% p.a. for the next 5 years.

If you have been following the stock market news over the last few days, then you will certainly have noticed the incredible performance of the $RHM (-1,89 %) -share has not escaped your attention. 💥 For the first time, the share price climbed above the 800 euro mark and continued to soar! On Friday, the share price rose to an impressive 832 euros, an increase of almost 8%. And this was not just a one-off jump - analysts have rapidly adjusted their price targets for the company upwards. HSBC is even talking about a target price of 1000 euros - a real glimmer of hope for investors! 🌟

Why this rapid price increase? 🤔 The background lies in geopolitical developments and the associated expectations of rising defense spending in Europe. The USA is exerting increasing pressure on the EU to increase its own security budgets in order to strengthen its defense. This has led many investors to invest in defense stocks - and particularly $RHM (-1,89 %) benefited from this.

For the $RHMshares, the upswing is not only a reaction to the current political discussions, but also a long-term perspective. Market expectations reflect continued growth in the defense industry, especially if Europe is forced to take on more responsibility.

But what do you think? Will the $RHM (-1,89 %) -share continue to be a strong winner in the coming period? 💬 Perhaps you are invested yourself and have already had your first experience. Share your thoughts with us in the comments! 😊

Finally, a small note: other defence companies have also made strong gains recently - and this shows that the topic of defense continues to play a major role on the stock markets. 🔥

Stay tuned, because the market could still have many surprises in store for us! 😎📈

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