In the following post, I would like to discuss the new US tariffs and their potential economic consequences. The background and the potential impact on inflation and companies, as well as the winners and losers on the stock market, will be discussed.

Again, of course, the stocks mentioned do not constitute investment advice, but merely serve as examples of possible beneficiaries or losers of tightening trade restrictions. Historical developments are no guarantee of future returns.

__________

In this post:

• Influence on inflation
• New tariffs in force
• Reaction of the countries
• Consequences for the global economy
• Winners & losers
• Investment opportunities

__________

The topic of "tariffs" is currently not only very present in the media, but the term "tariffs" has also been discussed with a strong increase in the past earnings calls of companies in the S&P 500, as the following chart shows [1].

The chart shows that the discussion about tariffs has intensified in recent months and is having an ever greater impact on the outlook in companies' annual reports.

The data is presented as a three-month average and broken down into various sectors, including e.g. industry, healthcare, consumer goods, information technology, etc.

I am curious to see how the stock markets will behave in the coming week. In addition to the current reporting season, the topic of "tariffs" will certainly dominate.

After the tough tariffs announced after Trump took office were not immediately enforced and there was a "slight" sigh of relief, there could now be a new reaction on the markets, as there was on Friday evening. slightly was already slightly noticeable on Friday evening when the markets turned towards the evening.

A looming trade conflict could not only affect individual companies, but also further fuel inflation in the US:

💰 Influence on inflation

On January 31, Deutsche Bank published a forecast on the potential impact of tariffs on the inflation rate [2]:

The chart compares the current forecast with the forecast before the "Trump" era and takes into account various scenarios for the passing on of tariffs (pass-through) by Canada and Mexico.

Two scenarios are considered: one with a 50% pass-through of tariffs (additional increase shown in dark green) and one with a 75% pass-through (light green). It is clear that the inflation rate could rise sharply again this year and fall again by 2027.

🛃 New tariffs in force & further measures planned

As of today, February 1, 2025, the US government and Donald Trump have imposed new import tariffs on Mexico, Canada and China:

• 25% on imports from Mexico and Canada
• 10% on imports from China

According to the White House spokesperson, these measures are, among other things, a response to the failure of these countries to stop the influx of fentanyl and illegal immigrants into the USA. [3]

But this is just the beginning:

From mid-February, the USA will also impose tariffs on strategic goods [4], including:

• computer chips
• pharmaceuticals
• Steel, aluminum and copper
• Oil and gas imports (but only from February 18 with reduced 10% tariffs so as not to burden US petrol prices immediately).

🚨 Trump relies on escalation - Canada announces retaliation

Yesterday, Canadian government representatives, including Foreign Minister Mélanie Joly, tried to prevent the tariffs in Washington, but to no avail.

Trump made it clear before his departure to Mar-a-Lago [5]:

"We have a 200 billion dollar trade deficit with Canada. Why should we subsidize Canada?"

The EU could also soon be targeted, as Trump hinted:

"Absolutely! The European Union has treated us so terribly!"

🔄 Canada's reaction:

Prime Minister Justin Trudeau announced that Canada will not back down and will respond with "swift and robust countermeasures".

The government is planning a three-stage retaliation strategy [5]:

• 1️⃣ Targeted punitive tariffs on US products coming from Republican states (e.g. orange juice, whiskey, ketchup, peanut butter and motorcycles).

• 2️⃣ Tariffs on steel products and machine parts from the USA.

• 3️⃣ Escalation: Stop exports of oil, gas and electricity to the USA

However, this last step in particular would be a double-edged sword, as Canada is heavily dependent on energy cooperation with the USA.

Economic experts in the US are already warning of the consequences of a trade war [5]:

• The new tariffs could increase the cost of living of an average US household by 800 dollars per year.
• The oil and gas tariffs could increase the price of petrol in the USA by up to 20 cents per liter.

But Trump remains firm:

"Maybe there will be short-term disruption, but in the long run the tariffs will make us very rich and very strong."

🌎 Possible consequences for the global economy

(a) Rising prices in the USA

• Technology & electronicsHigher chip prices are hitting companies such as Apple $AAPL (+0,26%) , Dell $DELL and HP $HPQ (-0,12%) as many of their components come from China.

• Healthcare costs: Pharmaceutical companies such as CVS Health $CVS (-2,18%) and Walgreens Boots Alliance $WBA (-3,09%) are facing higher purchasing costs.

• Construction & InfrastructureHigher steel prices are weighing on companies such as Lennar $LEN (-1,45%) D.R. Horton $DHI (-1,49%) and Caterpillar $CAT (-2,26%) .

(b) Retaliation & new trade wars?

• China could impose tariffs on US products, which could affect e.g. Archer Daniels Midland $ADM (+4,11%) Boeing $BA (-1,57%) and Qualcomm $QCOM (-4,11%) would be affected.

• The EU could make US imports more expensive, which would affect Tesla $TSLA (-4,32%) , Ford $F (-0,67%) and General Motors $GM (-2,75%) could be harmed.

(c) Effects on the stock market

• Volatility is increasing as there is uncertainty about the consequences for various industries.

• Particularly affected: Technology and automotive stocks with global supply chains.

🏆 Winners & losers - which companies will benefit, which will suffer?

Possible beneficiaries of the tariffs

US manufacturers of steel, aluminum & copper

• Nucor $NUE (-2,98%) , U.S. Steel $X (-2,22%) and Freeport-McMoRan $FCX (-4,12%) could benefit as foreign competition becomes more expensive as a result of the tariffs.

Domestic pharmaceutical and biotech companies

• Pfizer $PFE (+1,91%) Moderna $MRNA (+6,04%) and Eli Lilly $LLY (+0,32%) could gain market share.

Energy companies with US production

• ExxonMobil $XOM (-0,73%) , Chevron$CVX (-0,58%) and Expand Energy $CHK (-1,7%) could benefit from rising prices for US oil and gas.

Chip manufacturers with US production

• Intel $INTC (-4,07%) and Texas Instruments$TXN (-0,26%) have US factories and could gain market share.

😥 Companies that could suffer from the tariffs

Chip manufacturers with global supply chains

• Apple $AAPL (+0,26%) NVIDIA $NVDA (-3,63%) , AMD $AMD (-2,29%) are dependent on Asian imports and could see higher production costs.

Car manufacturers with global suppliers

• Tesla $TSLA (-4,32%) , Ford $F (-0,67%) , General Motors $GM (-2,75%) are under pressure because components from Mexico and Canada could become more expensive.

Companies with strong export business

• Boeing $BA (-1,57%) and Caterpillar $CAT (-2,26%) suffer from possible retaliatory tariffs.

US retailers with a high import share

• Walmart $WMT (-2,31%) , Target $TGT (-2,56%) and Nike $NKE (-0,48%) could have to pass on rising prices to customers.

🧠 Possible investment strategies

Favor defensive sectors:

• Utilities (e.g. NextEra Energy $NEE (+2,37%) Duke Energy $DUK (+2,62%) ) and healthcare companies (e.g. UnitedHealth $UNH (-6,94%) , Johnson & Johnson $JNJ (+2,12%) ) remain more stable.

Exploit long-term opportunities in "reshoring":

• Intel $INTC (-4,07%) , Eli Lilly $LLY (+0,32%) , Nucor $NUE (-2,98%) could benefit in the long term.

Conclusion: Will the trade conflict escalate further?

With the new tariffs, Trump is taking a confrontational stance and Canada, Mexico and China are preparing for retaliatory measures. If further tariffs on European goods follow, the situation could worsen.

❓Which stocks do you think could be most affected? Which beneficiaries do you see?

Thanks for reading! 🤝

__________

Sources:

[1] https://finance.yahoo.com/news/yahoo-finance-chartbook-44-charts-that-tell-the-story-of-markets-and-the-economy-to-start-2025-105856766.html

[2] https://finance.yahoo.com/news/2-charts-show-why-markets-are-skittish-about-trumps-tariff-policy-144318249.html

[3] https://www.faz.net/aktuell/politik/usa-unter-trump/trumps-verhaengt-zoelle-gegen-kanada-mexiko-und-china-110269990.html?

[4]

https://www.finanznachrichten.de/nachrichten-2025-01/64440108-trump-usa-werden-ab-mitte-februar-zoelle-auf-computerchips-stahl-sowie-oel-und-gasimporte-erheben-015.htm

[5] https://www.tagesschau.de/ausland/amerika/usa-trump-strafzoelle-100.html

What is the general feeling of well-being here regarding $ADM (+4,11%) ?

Preface:

In the following, I would like to present how my portfolio has developed over the course of 2024.

This includes

1) my strategic orientation

2)Return on the portfolio.

The main topics are:

• Moving away from individual stocks
• Entry into gold and bitcoin
• Factor investing

Finally, I will give my own thoughts on how to proceed.

The main changes to my portfolio that have led

to my current strategy are presented below using a short timeline.

timeline:

My timeline

Beginning of 2024

At the beginning of the year, I pursued a 70/30 core satellite

strategy. The 70% ETF core again consisted of STOXX Europe.

MSCI World, Emerging Markets.

The 30% consisted of stocks such as: $CSIQ (-0,28%) , $O (+1,37%) ,$TSM (-0,58%)
$ADM (+4,11%)
$UMI (+1,76%)
$D05 (+0,91%)
$BMW (-0,12%)
$UKW (-0,76%)
$8031 (-0,64%)
$MUV2 (-0,6%)

February

Addition of gold to my portfolio. Target size 10%. Build-up in batches.

The remaining 70/30 strategy therefore only relates to the remaining

90%.

April-June:

Entry into Bitcoin via Trade Republic in several batches

at prices between 50k and 63k.

After exchange with @Epi to the fee schedule at Trade Republic

I sold them there in order to sell Bitcoin on a dedicated crypto exchange.

exchange.

June:

Thanks to @PowerWordChill I got to grips with factor investing. A Gerd Kommer book later, and after some internet research, I decided to

decided to transform my ETF strategy into a factor ETF strategy.

July-August 2024:

Sale of my shares. Concentration on the factor portfolio.

August - September 24:

Renewed build-up of Bitcoin with the aim of making Bitcoin a

a fixed component of the portfolio. Consideration is 5%-10%

of my portfolio.

The idea. Build up an initial position, then make regular

investments of €50 per week with the aim of growing to the target size

to grow to the target size. The rapid rise in October/November led me to

led me to leave it at €50 per week. And individual purchases in

larger tranches at an early stage with a portfolio size of 2.x%.

End of December 2024:

Position size of Bitcoin almost 5%.

I am not yet including Bitcoin in my gold/ETF quota. I'm still running it on the side.

I re-evaluated my factor weighting at the end of the year

and would like to fine-tune it a little. I will briefly present the result in the

following section.

In addition, I have decided to include a small

include a small proportion of real estate stocks. However, this will probably never

part of my strategy worth mentioning and contains - as of today - only

about 3% of my portfolio and only $O (+1,37%) ).

Overall breakdown of my portfolio:

As described above, I do not yet include Bitcoin in my overall strategy

part of my overall strategy so that rebalancing remains easier. This will

change when Bitcoin reaches its target size.

The rest is made up as follows:

ETFs:

$XDEM (-1,03%) 30.3% (MSCI World Momentum)

$XDEB (-0,35%) 10.1% (MSCI World Minimum Volatility)

$XDEV (-0,68%) 10.1% (MSCI World Value)

$ZPRV (-1,97%) 15% (MSCI USA Small Cap Value Weighted)

$ZPRX (+0,2%) 6.5% (MSCI Europe Small Cap Value Weighted)

$PEH (+0,69%) 4.5% (as a quality factor on emerging markets)

$5MVL (+0,04%) 4.5% (Edge MSCI EM Value)

$SPYX (-0,24%) 9% (MSCI EM Small Cap)

Gold

$EWG2 (+0%) 10% Gold ETC

Getquin Rewind and own data:

At the end of the post you will find my Getquin Rewind, as I was not able to embed the image in the text:

However, according to my own calculations, this cannot be correct.

My portfolio volume at the start of the year was around €103,500 with a return of €16,693. This would correspond to a total return of 19.2%. However, we are not yet talking about a time-weighted return, as my invested capital has roughly doubled over the course of the year. I therefore estimate my TTWROR to be higher.

My own thoughts and outlook:

I do not expect any major changes in strategy over the next few years. At some point, a strategy will have to be established. If necessary, I will make some adjustments to this strategy.

This includes the fact that I am dissatisfied with the costs of the emerging markets factor ETFs. So far, however, I intend to live with it. Should I

stumble across better products, I will consider switching. Especially as long as I stay within the tax allowance when switching.

I'll also have to decide how big my Bitcoin holding should ultimately be.

If you've been reading carefully, you'll notice that a lot of money has accumulated in the last year. Big profits, big investments. Due to personal circumstances, I will not maintain these rates in the same style, but will reduce them somewhat. I expect to be able to continue investing around 1.5-2k per month. This means that my financial goals are

with an expected return of 5% adjusted for inflation over many years.

I am half hoping for major setbacks in the near future and the associated favorable entries. However, in view of the impact that minor price jolts have had on society as a whole (thanks to populism), I don't really wish for them.

Do you have any suggestions, questions or comments? Is there anything that particularly interests you?

I am also happy to receive suggestions for improvement for future posts.

Best regards,

Your Smurf

PS: @DonkeyInvestor and me, that's love ❤. And now send me your coins! (So I can reward your next post appropriately).

PPS: I hope someone is interested.

ADM Q3 2024 $ADM (+4,11%)

Financial performance:

Net profit: For the quarter ended September 30, 2024, net income was only $18 million, a significant decrease from $821 million in the same quarter last year.

Adjusted net income: Adjusted net income for the quarter was USD 530 million, compared to USD 880 million in the prior year.

Adjusted EPS: Adjusted earnings per share (EPS) were $1.09, compared to $1.63 in the prior year.

Balance sheet overview:

• Invested Capital: Total invested capital amounted to USD 32,025 million as at September 30, 2024.

Results of operations by segment:

Ag Services and Oilseeds: Operating profit fell to USD 480 million, a decrease of 43% compared to the previous year. The decline is due to lower results in South America and lower margins in refining and biodiesel production.

Carbohydrate Solutions: Operating profit was USD 452 million, a slight decrease of 3% compared to the previous year. However, the segment continued to benefit from a strong performance in starches and sweeteners.

Nutrition: Operating profit decreased 19% to $105 million, primarily due to higher costs and lower margins in human nutrition.

Cash flow overview:

• Operating cash flow: For the nine months ended September 30, 2024, operating cash flow was USD 2,468 million, an increase compared to USD 1,891 million in 2023.
• Cash flow before working capital: This amounted to USD 2,341 million for the nine months.

Key figures and profitability metrics:

• Adjusted return on invested capital (ROIC): The adjusted return on invested capital for the last four quarters to September 30, 2024 was 6.6%.

Segment information:

• Ag Services and Oilseeds: The decline in operating profit was impacted by lower results in South America and lower refining and biodiesel margins.
• Carbohydrate Solutions: The segment reported a solid performance in starches and sweeteners, but slightly lower profits.
• Nutrition: The segment reported declining profits due to higher costs and lower margins in human nutrition.

Competitive position:

The company faces challenges in maintaining margins due to increased competition and current market conditions, particularly in the Ag Services and Oilseeds segments.

Management forecasts and comments:

• EPS guidance: The company has lowered its full-year 2024 EPS guidance to a range of $4.50 to $5.00.

Risks and opportunities:

• Risks: The company is struggling with slowing market demand, internal operational challenges and uncertainties related to legal and regulatory frameworks.
• Opportunities: Despite the challenges, the company sees opportunities in the area of cost optimization as well as in strong sub-services such as animal nutrition.

Summary of results:

The company is experiencing a difficult financial year with significant declines in net profit and operating profits in all segments. The adjusted key figures show a slightly more positive picture, but also indicate a decline compared to the previous year. The company is adjusting its financial strategy and has lowered its EPS forecast for the year. While operational challenges and market conditions remain as key risks, strategic cost optimization and strengths in certain segments offer potential for future improvements.

Positive aspects:

Equity income from Wilmar investment: Equity earnings from the Wilmar investment increased to USD 62 million in the quarter, up from USD 35 million in the prior year quarter. This shows a positive development of this investment.

Animal Nutrition (sub-segment): The Animal Nutrition sub-segment recorded an operating profit of USD 19 million, an increase of 58 % compared to the same quarter last year. This improvement is due to cost optimization and lower input costs.

Starch & Sweetener segment: This segment reported a 13% increase in operating profit compared to the same period last year, supported by strong volumes and margins.

Cash flow from operating activities: Net cash flow from operating activities for the nine months ended September 30, 2024 was USD 2,468 million, an increase from USD 1,891 million in the prior year period, indicating improved cash generation.

Insurance proceeds: The company received significant insurance proceeds, including $47 million for Decatur West insurance claims and $25 million for Decatur East, which positively impacted financial results.

Negative aspects:

Decrease in net income: Net income for the quarter ended September 30, 2024 was only $18 million, a drastic decrease from $821 million in the same quarter last year.

Ag Services and Oilseeds segment: Operating profit for this segment was $480 million, a decrease of 43% compared to the same quarter last year, primarily due to weaker results in South America and reduced margins.

Nutrition Segment: Nutrition segment operating profit decreased 19% to $105 million due to higher costs and lower margins in human nutrition.

Reduction in EPS guidance: The company has lowered its full-year 2024 EPS guidance to a range of $4.50 to $5.00, reflecting ongoing challenges and uncertainties.

Operational challenges: The company is facing operational challenges, including slower market demand and internal issues impacting overall performance.

Hello,

I would like to minimize my consumer staples allocation.

What would you remove or reallocate?

$MNST (+4,14%)

$RKT (-0,52%)

$NESNE (adr :()

$ULVR (+0,79%)

$ADM (+4,11%)

$PEP (+3,26%)

$MMM (-2,37%)

Thank you!