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Quarterly review of Roland Laskine portfolios: our three options withstood the market downturn – 04/01/2022 at 12:06

Quarterly review of Roland Laskine portfolios: our three options withstood the market downturn – 04/01/2022 at 12:06

(Photo credit: Adobe Stock -)

(Photo credit: Adobe Stock -)

March 31, 2022

The first trimester did not go as most experts expected. Concerns related to inflation, which had been very present in the minds of operators since the beginning of January, were clearly exacerbated by the Russian invasion of Ukraine. Apart from the geopolitical instability that triggers a war at Europe’s gates ahead of markets, the price of raw materials and energy has risen as a result of this aggression, leading to a resurgence of inflationary pressures. . In Germany, consumer price inflation reached 7.3% in March. Not heard of November 1981! In Spain, we have to go back to before the country joined the European Union to find inflation comparable to the 9.8% achieved last month.

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This sudden deterioration of the market environment weighed on European equities which lost up to 12% during the onset of the Ukraine crisis. An impending truce was then expected which enabled the indexes to begin to rise gradually, despite the many disappointments that emerged during the negotiations. Finally, European stocks managed to limit the damage, with the CAC 4O index falling 6.89% in the quarter to 31 March 2022. With this increase in volatility, our portfolios responded well. Defense finished the quarter down 4.94%. The graph above shows that our stock selection reacted well to the market downturn that occurred on February 24, the first day of the Russian invasion of Ukraine.

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Our selection of PEA / SRI funds followed the same path, with a decrease not exceeding 2.06%. We are continually concerned that our Defense and SRI / PEA options are against market volatility. It was acquired through a selection of world-class stocks in the Defense portfolio and through a rigorous selection of highly resilient funds in the PEA / SRI. We also had no hesitation in strongly increasing the share of cash in each of our options, which is the best way to take shelter when the trend worsens.

We also achieved a good result on our Offensive pick, finishing a quarter with a slight decrease of 1.15%. Unlike the other two options which were managed very conservatively, this result was due to the implementation of a firmly abusive investment strategy. Our options were primarily focused on stocks that preferred the rise in the price of raw materials. We also stayed away from industrial and agri-food stocks that were penalized by the return of inflation pressures. Unlike the other two options, this one remained invested at 80%.

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The composition of the portfolio presented above shows that recent entry of commodity-linked stocks, such as Eramet which bought on January 20 (up 55.2% in the two-month period) has clearly helped support performance. The same applies to recently acquired oil services groups (Vallourec, CGG, GTT or Technip) and gas and hydrocarbon producers (Eni, Repsol and Maurel & Prom). Another recent acquisition is Thales, which specializes in military infrastructure and equipment. Our IT services companies (Assystem, Aubay and Capgemini) and the European stock market operator Euronext have suffered little as a result of the war in Ukraine. The positions taken at the Eurofins Scientic analysis laboratory, the European specialist in STMicroelectronics semiconductors and the Société des Bains de Mer de Monacó, also give us complete satisfaction.

Our investment strategy for the coming days: last week we announced that our portfolios were generally well configured to deal with the uncertain evolution of markets. So we did not make any new arbitrations. In the coming days, we will remain very cautious with bias, but new advances in the search for a Ukrainian truce could put us at little risk depending on the opportunities that arise. We will also remain vigilant in the European Central Bank ‘s assertions that today we are facing a much stronger – than – expected inflation surge. On the contrary, the harsh tone of the market, especially on the German governance side of the ECB, is likely to weaken the market.

Happy reading to you and have a nice weekend everyone,

Roland Discount

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