Between Euphoria and Discipline

For investors in Swiss Francs and the Eurozone, the market environment in 2025 was particularly shaped by currency effects. The significant depreciation of the US dollar had a noticeable impact on the performance of international investments measured in local currency: the US dollar lost around 13% against the Swiss franc and around 12% against the euro, which significantly put nominal price gains in many places into perspective.

This development is not an isolated case, but rather the expression of a recurring pattern in the financial markets. Markets have always been shaped by dominant narratives that guide the perception of opportunities and risks. In the 1970s, it was stagflation that brought energy stocks to the fore, followed by the Japanese euphoria in the 1980s. The 1990s were dominated by the internet, while in the 2000s, China's industrial rise determined global capital flows. Each of these phases had its own obsession, which was reflected particularly clearly in the largest companies.

Regardless of the prevailing zeitgeist, all companies are subject to the same economic laws. As size increases, growth slows down, and only a few companies manage to maintain their top position over a longer period. Historically, hardly any company manages to remain at the global top for more than a decade. Over time, size itself becomes a limiting factor, creating space for new players carried by the next dominant narrative.

Today's Narrative

The current market narrative is clear: Artificial Intelligence is at the center of attention. This topic is flanked by related areas such as energy infrastructure, nuclear energy, quantum computing or rare earths. These topics are currently capturing a significant share of investor interest.

The result is a market that is increasingly dividing into two camps: on the one hand, companies that are clearly associated with these dominant themes, and on the other hand, a broad segment of companies that receive significantly less attention despite solid fundamental data.

A look at the performance of individual market segments illustrates this development. Unprofitable companies were among the strongest winners in 2025. This is even more extreme for companies without significant revenue, especially in areas such as nuclear fusion or quantum computing, which outperformed almost all other groups. The common denominator is obvious: Artificial Intelligence. While this theme is present in our portfolios, the share of unprofitable companies remains deliberately very low. Our focus is clearly on high-quality companies.

The AI Narrative Makes Quality Cheaper

When markets move away from fundamentals, even solid and highly profitable companies temporarily come under pressure. Not because their business models are deteriorating, but because investors are reallocation capital into more sought-after themes. This process, known as rotation, leads to the share price development of quality companies temporarily decoupling from their operational performance.

However, such trend-driven market phases create constellations that Warren Buffett fittingly describes as buying a great company at a fair price. Currently, many high-quality companies are trading at more than fair valuations – a market anomaly that historically can only be observed about once a decade (see figure). At the same time, numerous mediocre companies are trading at exceptionally high valuations.

During the dot-com bubble, Warren Buffett's investment vehicle temporarily recorded a loss of around 45 percent, while the Nasdaq index gained about 290 percent over the same period.

Our Conclusion

History does not repeat itself, but it rhymes. Long-term investment success requires patience and staying power. Experience shows that the share price development of quality companies, supported by solid fundamental data, sooner or later aligns again with operational reality.

As always, we thank you for the trust you have placed in us!