I am currently on holiday with the whole family enjoying some nice sunny weather in Spain while I read headlines that airlines in Europe fear a lack of kerosene in a few weeks already if the supply chain does not return quickly to the pre-war standard. The events over Iran are changing by the minute.
For me personally I have three points that I believe are currently running a bit under the surface:

• the number of ships crossing is likely greater than what journalists and analysts are estimating by using AIS data

• if the issue over the strait does not resolve itself within the next 3-4 weeks I believe we will face shortages in a lot of supply chains from kerosene over plastics, lubricants, and many other goods

• we are used to a world where the scarcity of goods usually ends up in inflation. We are not used to a world where we cannot physically access any goods because they are simply not being produced. This is something different and it is a situation that cannot be solved by throwing money at it. Neither by the consumer nor by the government with interest rates, quantitative easing or stimulus checks.

Worth Noting

If there is anything worth reading it is the quarterly letter of Graham Rhodes founder of Longriver Investment Partners based out of Hong Kong.

The Q1 letter is about Hong Kong’s ongoing economic transformation which is influenced by more integration with Chinese capital markets and demographic shifts. Graham evaluates the potential of Futu, highlighting effects of a global expansion and the transformation from a simple brokerage into a financial platform.

Thank you for reading along.

The situation in the ME keeps markets quite busy. While overall indices are down barely 10% I see much greater declines in single names or at least the ones I am watching closely. I will get into more details in the portfolio update that I will publish at the beginning of April. I think of companies like Visa, Mastercard, Thermo Fisher, Danaher, Microsoft, Booking, S&P Global, Berkshire Hathaway, Intuit, Chipotle, Uber and many more.

These are no value picks trading at a P/B of 0.5 but certainly these businesses are of (at least previously perceived) very high quality. Still, they are trading at the lowest valuations in years. I read an article on X this week about Guy Spier closing down his fund due to health reasons, and I believe somebody commented something in the sense of: stock picking is dead.

I do not think it is dead. Even with all the information that is available to individuals, institutional investors, algorithms, markets are always the result of human psychology and emotions. I think running a portfolio of 15 or 30 stocks and trying to outperform the market with large caps is dead, and it always was. Is it possible with only 5 or 6 individual stocks? Absolutely.

This is not the way I invest here at The Tiny Family Office, as I have a different mandate and investment goal, but sometimes I feel the urge to sell it all, just buy 5 great businesses, and never look back. As Charlie Munger used to say: putting all eggs in one basket and watch it carefully.

Worth Noting

Nordea published another interesting piece with the title “Macro & Markets: Will higher energy prices alone justify hiking rates?”

Europe and Asia are perceived to be more vulnerable to prolonged energy prices than the U.S.. Slowing economic activity across one region will also affect other regions with spill-over effects. So yes, the U.S. economy is shielded but not immune. The big question is if central banks will have to hike interest rates. According to the chart above taken from Nordea’s research this would not be the case for Europe at the moment. Especially because economic activity is already slowing down globally across PMIs, consumer confidence and with higher inflation expectations. Lower asset prices also have an effect on that.
Nordea writes:

“While we are on the verge of moving our baseline ECB hikes from 2027 clearly forward, we have not done so yet. We still tend to think it would be easier for the ECB to wait at least until the June meeting for better visibility on the how the situation in the Middle East evolves, how the economy reacts to the higher prices, what is the response from fiscal policy and, most importantly, how higher energy prices feed through to other prices and inflation expectations. Further, a full set of staff forecasts would be available at the June meeting.”

As you know I am not a big fan of acting on macro research, and I think predicting short-term movements of economies, interest rates or currencies does not really matter if you invest for the long-run. I can spoiler a tiny fraction of the portfolio update for March already: I barely did anything.

I am certain we have another interesting week ahead of us.

Thank you for reading along.

On my mind this week are, unsurprisingly, the ongoing events in Iran and the Middle East. Analysts, asset managers, politicians try to make predictions about oil prices, shipping traffic, durable damages to physical assets, potential outcomes of the conflict and many other events influencing markets.

During times like these I try to stay away from too much noise. More often than not, we fool ourselves into thinking we know exactly how things will play out, when the reality is that there are simply too many variables to model accurately.

The magnitude of this crisis, exceeds those in the past. In the 1990 Gulf War only about 5% of global oil supply was removed from the market temporarily. The current complete shutdown of the Strait of Hormuz is the issue here trapping roughly 20% of daily global oil supply and 20% of LNG supply. The solution of free markets to higher prices is usually demand destruction. A crisis like this will be solved at least partially “naturally” at some point.

There is one thing I am certain of, however, no matter how this crisis will play out: Governments will further accelerate strategic on-shoring of critical industries and energy infrastructure. This crisis once again shows how vulnerable a globalized world has become to regional shocks.

Worth Noting

Warren Buffet in 2017 said about Bill Ruane, co-founder of the Sequoia fund: "A truly wonderful human being and a man whom I identified 60 years ago as almost certain to deliver superior investment returns over the long haul".

Since its inception in the 1970s, Sequoia has famously outperformed the S&P 500 by running a concentrated, long-only equity strategy.

Sequoia Fund Top 10 Holdings

(As of their latest reporting, representing over 60% of the total portfolio)

1. Rolls-Royce Holdings PLC (Industrials) - 12.4%

2. Alphabet Inc. Class A (Communication Services) - 8.2%

3. Liberty Media Corp - Formula One (Communication Services) - 7.1%

4. Universal Music Group NV (Communication Services) - 6.0%

5. Eurofins Scientific SE (Healthcare) - 5.6%

6. Capital One Financial Corp (Financial Services) - 5.3%

7. Constellation Software Inc. (Technology) - 5.3%

8. Elevance Health Inc. (Healthcare) - 4.9%

9. Charles Schwab Corp (Financial Services) - 4.4%

10. Intercontinental Exchange Inc. (Financial Services) - 4.3%

I am quite surprised, but they announced their decision to transfer the mutual fund into an actively managed ETF strategy. The new Sequoia ETF (NYSE: SEQ) is expected to become available late 2026. This ETF could potentially become an interesting addition to The Tiny Family Office portfolio, and I will be watching it very closely.

I wish us all a safe week.

Thank you for reading along.

I decided to have a look at Merrill Lynch’s Capital Market Outlook again this week, and stumbled across the following:

After reading the first few lines on biotechnology and life sciences Thermo Fisher Scientific and Danaher came to my mind. Both companies have great portfolios in the life sciences and diagnostics spaces.

Interestingly enough, the market is not pricing in huge future tailwinds into the share prices at the moment. Both companies trade at the lower end of their EV/EBITDA valuation ranges.

Francois Rochon of Giverny Capital published his Annual Letter 2025. It is worth reading, some great analogies can be found between railway investments and the current AI capex. The best part perhaps is usually the podium of errors:

Gold Medal: Canadian National Railway

In my brief (!) historical text about railways in this letter, you may have noticed that CN was privatized by the Canadian government in 1995. Its shares were then listed on the Toronto stock exchange. We could therefore have invested in it at that time. In Peter Lynch’s book “Beating the Street,” published in 1992, there was this rule: “Whatever the Queen is selling, buy it!” But unfortunately, I ignored Peter’s rule and passed on it. The following figures will send chills down your spine: the share price has risen from $1.75 in December 1995 (adjusted for stock splits) to $136 in December 2025. With the dividends received over the years, we’re talking about an approximate annual return of 17% over 30 years. Would you believe me if I told you that this is a better return than Microsoft’s for the same period?

You can find it here.

Thank you for reading along.

Inspired by the recent market fears around SaaS disruption through AI, I continue to think about businesses or more broadly about industries that seem quite immune to disruption.

One sector standing out is transmission and distribution of electricity. While returns are regulated, the assets are extremely difficult to replicate. There are a few pure-play companies that are not vertically integrated and therefore have no generation business (which is great). If generation technology changes they will not be affected, and transmission still remains essential.

In 2006, Warren Buffett attempted an acquisition of the transmission assets of TXU but was ultimately outbid by Sempra Energy.

I listened to a podcast this week with the CEO of Fortis Inc., a Canadian holding company that owns more than $60 billion of regulated electricity and gas transmission and distribution assets across North America. The entire company is managed from a headquarters of only 50 employees in Newfoundland. It is one of the largest pure-plays in the sector.

(Energy) infrastructure that is essential, regulated, and nearly impossible to replicate tends to age very well as an investment.

If you are interested in the topic, I highly recommend this episode:

One Asset

This week, for me, was all about Berkshire Hathaway. CEO Greg Abel announced he intends to purchase Berkshire shares with his entire net salary of approximately 15 million USD throughout his tenure. After consultation with Warren Buffet Berkshire also has resumed share repurchases on Wednesday. The last share repurchases happened in 2024.

Alignment between me as a shareholder and company management is one of the most important factors when evaluating a business. Knowing that my capital is in good hands, and there is a very high probability that decisions will (continue) to be made through the lens of a long-term owner by the management team feels very comforting. As a Berkshire shareholder, I have rarely felt more comfortable holding the stock.

Thank you for reading along.

Research released a compelling piece of research on February 22nd that triggered an overwhelming media response, sparking intense debates and criticism:

• Citrini Founder Shocked His AI Prediction Spurred Stocks Selloff (Bloomberg)

• White House Economist Calls Citrini AI Report “Science Fiction” (Bloomberg)

• FT Coverage

Markets were down the following day, with SaaS, payment networks, wealth management, and a few other industries being hit. The Macro Memo illustrates a quite bearish AI scenario for 2028. Without diving into too much details (I recommend reading the memo) it paints a trajectory: Companies realize they can replace white collar workers. Layoffs start, which leads to less consumer spending, hurts the economy, and incentivizes companies to focus even more on the bottom line and introduce more cost efficiency programs. It is a vicious cycle. From the memo:

It was a negative feedback loop with no natural brake. The humanintelligence displacement spiral. White-collar workers saw their earnings power (and, rationally, their spending) structurally impaired. Their incomes were the bedrock of the $13 trillion mortgage market - forcing underwriters to reassess whether prime mortgages are still money good.

I find the memo extremely valuable, it is a great starting point for scenario planning. The timeline may be ambitious, and I do not expect something like this before 2030. What is truly entertaining is the fact that reactions were so mixed. Neither governments, nor investors like the idea that AI may initially, in a period of transition, not be net positive for society / humanity / economies. Industrial revolutions were always part of our history, and personally I do believe we will live in a better world in 20 years, but I think that we cannot rule out the possibility that near-term impact (say 5-10 years) will be rough, bearish, and marked with job losses, and corresponding financial market reactions. Remember that economies are driven by consumer spending. Are we prepared for that?

One Asset

Gold and oil posted solid gains in expectations of the events currently happening in the Middle East over the last 4 weeks. The scale of what is currently happening and the timeline is completely unknown, and I wonder what the market has already priced in, and what may be priced in over the next few days. Any involvement of ground troops in Iran is unlikely with a population of over 90 million people and a landmass that is roughly 2.4 times as large as Texas, so I am keen to see what the mid-term plan is.

Worth Noting

The Wigmore Association released its 2026 Capital Markets Outlook.

Wigmore is a group of five global family offices, including HQ Trust, a multi-family office with its roots in the Quandt family (BMW).

It is a quick five-minute read and well worth your time.

Thank you for reading.

This week’s CIO Note has a little different format. I am combining all three sections in one theme:

A CNBC article on Mattel brought toy manufacturers to my mind again.

Mattel posted peak sales in 2010. After that, the industry changed. Cheap imports from China, Vietnam, and elsewhere commoditized large parts of the toy market. Consumers became more price-sensitive, and recent inflationary pressures have likely reinforced that behavior. Add to that pressure from tariffs.

The total return numbers over the last decade tell the story:

• Hasbro: +92%

• Mattel: –42%

• Games Workshop: ~+5000%

At first glance, Mattel and Hasbro look like excellent businesses:

• Global footprint

• broad product portfolios

• powerful brands such as Hot Wheels, Play-Doh, Fisher-Price, Nerf, and Monopoly

But strong brands and scale are not enough if industry dynamics work against you. Mass-market toys are often hit-driven, retailer-dependent, and vulnerable to price competition.

Games Workshop, on the other hand, is different:

Games Workshop is a British manufacturer and retailer of miniature wargames, best known for the Warhammer and Warhammer 40,000 universes. The company does not just sell toys. It sells a hobby ecosystem.

Customers assemble and paint miniature figurines, they meet for games, buy rulebooks, novels, hobby supplies, and increasingly engage through licensed video games and other media. Games Workshop owns the intellectual property behind the Warhammer universe, this includes characters, stories, and artwork which creates a defensible and monetizable asset base. While Mattel and Hasbro optimize for mass-market reach, Games Workshop optimizes for intensity of engagement. It is easy to manufacture a toy for a 5 year old kid of plastic, but it is almost impossible to replicate decades of world-building, customer engagement, and brand loyalty in a niche.

One additional thought: in an increasingly digital world, physical communities built around shared hobbies may become more valuable in the future.

This podcast is very good starting point if you are interested in the topic:

This is not investment advice. Do your own research.

Thank you for reading and enjoy the next week!

Apollo’s Torsten Slok recently wrote on AI:

“After three years with ChatGPT and still no signs of AI in the incoming data, it looks like AI will likely be labor enhancing in some sectors rather than labor replacing in all sectors.”

I see a lot of speculation on what AI could mean in the future for industries such as SaaS, rating agencies, real estate services, and many others. Yet, so far, the measurable impact is quite limited. Markets seem eager to price in disruption before disruption shows up. The current price action suggests something more nuanced: uncertainty rather than conviction in a certain story. Markets are not decisively pricing in collapse or transformation, they are just discounting a set of open questions which brings me to the next company: S&P Global.

One Asset

The market appears concerned that AI could disrupt S&P Global’s Market Intelligence segment and potentially commoditize elements of its ratings franchise. I do not see the ratings business as structurally threatened. It remains deeply embedded in the financial system, with regulatory entrenchment and strong pricing power. Market Intelligence is more exposed, in my view, but it is also the lowest-margin segment (approximately 18% operating margins versus roughly 60% in ratings). Importantly, it provides steadier recurring revenues compared to the more cyclical ratings business.

S&P has long been considered a “quality compounder” with the typical story attached to it: consistent growth, strong free cash flow conversion, high margins, and disciplined capital allocation. The market is now discounting a more uncertain future. That does not mean the thesis is broken or the business is bad. The narrative has just changed from easy to a few more question marks.

Worth Noting

I published the January 2026 Portfolio Update including two portfolio additions:

• A position in the AQR Apex Fund, a multi-strategy hedge fund

• Deutsche Boerse, which I view as an emerging market infrastructure monopoly in Europe.

I hope you enjoy the read.

Thank you for reading and enjoy the next week!

highlighted an interesting quote by Dan Loeb, founder and CEO of Third point:

“A simple query into Claude’s chatbot — ‘Which companies is Anthropic capable of dislocating or disrupting?’ — yields some fascinating results and was, in our view, a fruitful source of hedges for our firm.”

This touches on something I’ve been thinking about quite a bit: what happens to price discovery in the markets, research and the edge of active strategies in a world where high quality tools are available for everyone. You just have to ask the right questions.
Never before was it so easy for every investor to read a headline and get the same insights seconds later with the same conclusions. Narratives may translate even quicker into markets and at larger scale than before. I think it makes it even more important to find good companies and just continue to hold on to them. This will still be the greatest “edge” you can have as an investor.

One Asset

This week I spent more time digging into Visa, particularly financial statements, podcasts, and other material to better understand how developments such as stablecoins, central bank digital currencies, and the potential success of a domestic European payment system could affect the business.

The stock initially caught my attention after falling toward the lower end of its historical valuation range. Will get back on this in the future.

Worth Noting

Seafarer Overseas Value Fund Letter

My recommended reading this week is the latest letter from Seafarer Overseas Value Fund. I regularly enjoy their commentary. The fund focuses on emerging markets, especially Asia, and the letters often provide clear insights into portfolio companies, positioning, and long-term thinking.

Thank you for reading and enjoy the next week!

Donald Trump has picked Kevin Warsh as a candidate for the next Fed Chair. He is paving the way to eventually replace Jerome Powell.

The debate about whether Warsh is a dove or a hawk feels secondary to me. The Fed Chair does not set policy alone, the FOMC does that. What will matter far more is communication and signals. I expect markets to focus very much on initial messaging, interviews, public appearances rather than now drawing conclusions from the past. We may or may not see some surprises here. Rate cuts are far from assured.

One Asset

Gold and silver experienced heightened volatility this week. Gold remains part of the Tiny Family Office portfolio.

I briefly considered trimming exposure, but the recent move never turned into a true vertical one and ultimately reversed on Friday. From a strategic allocation perspective, gold continues to serve its purpose: a hedge against fiscal dominance, geopolitical risk, and currency debasement. I see no reason to change the long-term allocation.

Worth Noting

Podcast: Odd Lots - What It Takes to Build One of the World’s Biggest Banks

A great discussion on PNC’s strategic direction, technology investments, and the impact of AI on cost structures and product offerings (which may actually be smaller than we think). CEOs are generally quite good salesmen but Bill Demchak of PNC seems exceptionally likeable. Worth monitoring as an investment case.

Thank you for reading and enjoy the next week!

Exciting few days, and I spent some time this week watching the echoes after Davos. No big surprises there.

Markets calmed down as the Greenland situation faded from the headlines. What initially felt dramatic, with headlines dropping the U.S. would militarily secure the territory of a NATO ally, got absorbed quite quickly. New rumors are already circulating around a potential U.S. military intervention in Iran.

Circling back to Davos, one thing stood out to me: Ursula von der Leyen’s speech. It was a remarkably clear articulation of what Europe needs to do if it wants to remain economically relevant.

One statement in particular caught my attention:

“We are now building the Savings and Investment Union. We need a large-scale, deep and liquid capital market that attracts a wide range of investors…”

This leads me to the next point.

Deutsche Boerse and Market Infrastructure

I own Deutsche Boerse AG, which is arguably one of the most integrated market infrastructure businesses in Europe. It is operating across trading, clearing, settlement, custody, data, and financial software through platforms such as Xetra, Eurex, and Clearstream and has now reached a deal to acquire Allfunds.

Initially, I was skeptical whether such a transaction would pass European regulators. But hearing this speech, and seeing the political momentum behind capital market integration makes me more open to the idea that this deal could actually go through.

If completed, it would further cement Deutsche Börse as a central backbone of Europe’s financial system.

Why Allfunds?

Here is a short quote from the website giving an overview of the business activities:

“Allfunds (AMS: ALLFG) is one of the leading global WealthTech companies with a service offering tailored for Fund Houses and Distributors that ranges from dealing and execution services, to data analytics, reporting and portfolio tools, ESG advisory and custom software solutions.”

Since going public Allfunds nearly halved its share price, the performance was not great at all. But, Allfunds combined with Clearstream and a growing software and data business for asset managers would meaningfully deepen integration across the whole value chain for Deutsche Boerse. In the short term, the acquisition may pressure the share price. Long term, it strengthens the strategic positioning.

Bonds and “Abnormal Markets”

The Bank of Japan reiterated this week that it would intervene if markets “react abnormally.” Looking at long-end yields globally, I struggle with that statement.

Long-term yields are rising not only in Japan, but also across Europe and the United States. It is not abnormal. It is rational.

Investors are demanding a higher premium in a world of:

• structurally higher government spending,

• persistent fiscal deficits,

• rearmament

Sometimes I feel like if markets react to anything that politicians do it is immediately labeled as dysfunctional. I would genuinely enjoy a long conversation with the more enthusiastic proponents of Modern Monetary Theory about where the limits are supposed to be…

A Note on Nestlé

An interesting read this week came from Magellan Investment Partners on Nestlé, another portfolio holding.

You can read it here.

Nestlé currently trades at roughly a four-turn discount to its 10-year average forward P/E. Investor sentiment has turned negative due to a sequence of developments largely outside management’s control: cost-of-living pressures, commodity inflation, post-pandemic consumption normalization, and a recent leadership change.

Last year, I initiated a first position in Nestlé. It was an impulsive valuation-driven decision. Companies like Nestlé rarely become materially cheaper unless investors start questioning growth, pricing power, or consumer resilience.

I do not know how long these headwinds will persist. They are certainly there. What I do know is that Nestlé has the scale, balance sheet strength, and operational depth to adapt. Over a 20-year horizon, I am quite confident the company can deliver satisfactory returns as part of a defensive portfolio serving basic human needs.

It has the backbone and scale to do what is required.

This is no financial advice. Please do your own research. I can be wrong.

Enjoy the upcoming week!

This week will likely reinforce a point I have made repeatedly over the past months: It is probably not the worst idea to have a diversified portfolio in terms of asset classes.

I had expected gold to have reached a short-term peak last year. After this week’s developments, that assumption may have been a little premature. President Trump’s latest comments and actions, renewed pressure on Europe and the announcement of potential 25% tariffs tied to the demands for Greenland remind me again of the volatility in politics we have seen in the past years.

A Brief Note of Self-Reflection

In the first From The Desk of 2026, I wrote about Greenland and framed the most likely outcome as a negotiated solution between the U.S. and Denmark without any necessary escalation. I expected some tough negotiations, but I did not expect new tariffs. This reminds me of how little we really know and how little we can really predict. We will see what the coming weeks and months will bring.

This week is also shaping up to be interesting from a policy perspective. A court ruling on the current tariff framework is expected mid-week, potentially as early as Wednesday. Depending on the outcome, this could once again shift narratives and markets quickly.

Air Liquide

Over the past days, I also revisited an older podcast conversation between Nicolas Tangen and the CEO of Air Liquide. It remains well worth listening to:

Air Liquide is a truly impressive business that I had wanted to own for some time. The business model seems well positioned with several structural tailwinds: onshoring and reshoring of production, inflation-linked contracts, and exposure to growing markets such as semiconductors, space, and advanced manufacturing. I will be taking a closer look at the company in the next weeks. Perhaps a correction in equity markets will provide a good entry point for me.

Enjoy the week!

The year has already started in a way that once again confirms what some have come to call “the new normal”: a world where initially unusual, and unsettling things happen, and markets learn to live with them.

Donald Trump already removed Maduro from power. We have seen U.S. forces board a Russian-flagged vessel just days ago. On X, many immediately declared that “red lines had been crossed.” And yet nothing happened. No immediate escalation, no direct confrontation.

This is the world we are operating in now. I do not expect 2026 to be any calmer. At the time of writing, I am also watching developments in Iran closely.

Despite initially aggressive trade rhetoric and potential “tariff wars”, and policy uncertainty, the global economy has proven more resilient than many feared. President Trump’s America First agenda and trade confrontations dominated much of 2025, alongside the AI investment boom, rising geopolitical tensions, and Europe’s historic rearmament (and lacking growth).

Global growth remains close to 3%, broadly in line with recent years.

We enter 2026 from a relatively solid starting point. With the so-called “Liberation Day” now behind us it is difficult to construct a near-term scenario where the global economy truly derails. Companies and economies adapt quickly.

There are a couple of major developments I will be watching particularly closely this year:

Can Germany Reignite Growth?

The loosening of the debt brake has opened the door to large-scale investment in defense and infrastructure. We are also seeing encouraging, and politically meaningful, steps in capital markets: a new German “micro” pension scheme based on equity investments and the creation of a small sovereign wealth fund. Americans may smile at the scale, but for Germany this represents a substantial shift.

Structural challenges, however, remain formidable:

• An aging population

• Unfunded pension obligations

• Lagging productivity

• Intensifying competition from China, particularly in automotive manufacturing

• High energy costs, expensive labor, and a bloated bureaucracy

An Independent Federal Reserve?

Another key issue is the appointment of Jerome Powell’s successor as Chair of the Federal Reserve.

President Trump has been explicit in his desire for significantly lower interest rates. It is reasonable to expect that the next Fed Chair will be more receptive to White House preferences. That alone is not necessarily problematic as the Chair does not set policy unilaterally.

The risk lies elsewhere.

If markets begin to question the independence of the Federal Reserve, confidence could erode quickly, particularly in bond and currency markets. Long-term yields not (short-term) policy rates will be the signal to watch.

Greenland: Will Donald Trump follow through?

According to betting platform Kalshi, there is roughly a 40% probability that the U.S. will take control of some part of Greenland. This would have far-reaching implications for the U.S. role within NATO and Europe’s security architecture.

My personal view is that an agreement with Denmark will ultimately emerge: Europe will increase its presence in Greenland, and U.S. troops will likely do so as well. European leaders appear hesitant to meet Trump’s demands head-on, but Europe today is too fragmented and too weak to stand entirely on its own.

In a world undergoing a clear reshaping of the global order, steering away from the United States does not strike me as a prudent strategy.

Berkshire and the Long View

On a personal note, I will be watching Berkshire Hathaway closely this year as it is Greg Abel’s first year as CEO.

Over the Christmas period, I spent time reflecting on Berkshire’s role across themes such as grid expansion, energy security, a possible lender of last resort, and its unique portfolio of privately owned operating businesses.

There are very few companies globally that can play such a broad set of themes simultaneously. To me, Berkshire remains one of the greatest companies in the world, and I am proud to hold it in my portfolio.

The Portfolio

I have also partially introduced The Tiny Family Office portfolio, outlining a structure of roughly 70% equity investments and 30% alternatives, including hedge funds, insurance risk, credit, and gold.

👉 https://www.tinyfamilyoffice.com/p/introducing-the-portfolio

I encourage you to read it carefully.

I wish us all a healthy, thoughtful and fruitful year 2026.

Yours sincerely,

The Tiny CIO

It’s the most wonderful time of the year - like Andy Williams sang correctly, I would just like to give you a few Christmas wishes this week.

Let’s forget about investing for the next few days. At least until after the New Year. Markets will still be there. Portfolios will still be there. But time with family and loved ones is not something we get to compound later.

When I think about family and health, I often think of Charlie Munger and Warren Buffett. Charlie lived a remarkably long life, and Warren continues to defy age. I’m sure part of the reason is not just luck (probably good genes, too), but deep curiosity, genuine interest in the world, and the fact that they truly love what they did.

I still remember the first Berkshire Hathaway meeting after Charlie’s passing. Warren was asked what he would do if he had one more day with him. His answer was simple and deeply revealing:

“In effect, we already did have one more day. We lived every day doing what we enjoyed doing. Charlie liked learning, he liked a wide variety of things, and we had a lot of fun doing anything together. If I’d had another day with him, we would’ve done the same things we’d always done, and we wouldn’t have wanted to know it was the last day.”

He added something that has stayed with me ever since:

“There’s a great advantage in not knowing the day you’re going to die.”

Here is the video of Warren’s very humorous and touching answer:

There’s something quietly profound in that.

I wish you and your families a wonderful holiday season filled with health, happiness, and a bit of perspective. May the new year bring calm minds, good decisions, and the kind of prosperity that extends beyond portfolios.

Best wishes,

The Tiny CIO

I really like to read the T. Rowe Price Weekly Reviews. Here is a summary of what they saw: Global markets ended the week mixed, reflecting a familiar late-cycle tension between easing policy and valuation concerns. In the U.S., equities initially pushed to new highs after the Fed delivered its third consecutive rate cut of the year, but gains faded as technology stocks sold off on renewed doubts about AI-related capital spending paying off. Longer-dated Treasury yields moved higher, underscoring that easing policy does not automatically translate into lower long-term borrowing costs.

In Europe, equity markets were broadly flat, with policymakers signaling a prolonged pause rather than further rate cuts, while economic data continued to point to sluggish growth. Japan stood out modestly on expectations of a Bank of Japan rate hike, reflecting stronger wage and inflation dynamics, while China’s markets drifted lower amid persistent deflationary pressures and only incremental progress on reflation efforts. Overall, the picture remains one of policy support at the short end, but rising selectivity and skepticism at the long end of markets.

Source: T. Rowe Price

Merrill Lynch: affordability and markets in 2026

A section of Merrill Lynch’s Capital Market Outlook that stood out to me focuses on affordability, and how it may shape financial markets in 2026:

“On the economic front, the risk is that consumer spending comes in weaker than expected next year, as higher prices for goods and services crimp the budgets of both lower- and higher-income households. The fact that affordability is impacting higher-income consumers is evident from the fact that Dollar Tree, after reporting that 3 million additional households shopped in their stores in Q3, noted that, of those, 60% had incomes over $100,000.”

The core message is: higher prices and higher interest rates are colliding. The consumer is not doing well. Housing affordability remains stretched, corporate refinancing costs are structurally higher than in the last cycle, and governments are running persistent fiscal deficits (and will continue to do so). Even if central banks continue to cut policy rates, affordability constraints may limit how much demand can respond. Also let us keep in mind that yields on the long end of the curve are rising reflecting caution in the bond markets.

For markets, this implies a less forgiving environment:

• asset prices will likely need to justify themselves with cash flow, pricing power, and balance-sheet resilience,

• businesses with large amounts of debt may see re-ratings

• and valuation dispersion could remain elevated.
  
  Have a look at the chart below:

A few personal notes on housing affordability, but also housing as an investment here in Europe: I can only speak for the German city I live in. Prices remain elevated, owners simply refuse to lower them and my gut feeling is that housing markets are stagnating. Over time one will have to give in, either the buyer or the seller. As an investment overall cap rates are not very attractive here. Gross yields are roughly at 2-3% for large cities like Munich or Hamburg. It is hard to find investments in rental apartments that will have a yield greater than 4 or 5% on invested capital using leverage. Add to that rent controls by the government and you scare every international housing investor away from your domestic housing markets.

Tiger Value Fund: themes they are watching for 2026

Although I am not invested, I continue to read the Tiger Value Fund letters with interest. The Fund holds a portfolio of long and short positions focused on European equities.

Key themes they highlight in their November 25 fund update for 2026:

• Rotation away from crowded AI momentum toward value, defensives, and under-owned small- and mid-caps

• SMID recovery potential driven by stabilizing fund flows, attractive valuations, and rate cuts

• Infrastructure and capex-linked spending, including Germany’s €500bn investment program

• Defense and security upcycle, with global spending expected to rise materially into 2030

• Digital infrastructure, IT services, and automation, benefiting from AI adoption without paying peak AI multiples

• Energy transition and power infrastructure, particularly grids, storage, and efficiency solutions

• On the short side: companies structurally challenged by AI, weak governance, aggressive accounting, or consumer pressure

I wish you a wonderful week!

This week I spent time with the latest Merrill Lynch Capital Market Outlook. It made me very proud as a European:

Ex-US equities have outperformed this year (in USD).

In a world dominated by the S&P 500, this is remarkable in itself. According to Merrill Lynch, emerging markets and Europe both delivered 30%+ year-to-date gains in USD terms, with ACWI ex-US up 29%.¹

Europe, in particular, is on track for its best year relative to the S&P 500 since 2006.

Together with strong EM performance, this is a reminder that global diversification is not the worst idea. For me, personally, the U.S. remains the market where I expect the best performance over the long run (still). It offers companies the best conditions to thrive. Less regulation certainly than in Europe, flexible workforce, access to top notch graduates and research, energy security, and easy, quick access to one the most powerful consumer markets in the world.

Is this Europe’s moment to shine?

No. There was a brief “Europe is back” moment early this year. Then the narrative softened again.

Structurally, Europe has:

• more consumers than the U.S.,

• excellent universities

• global leadership in selected industrial niches,

• and huge untapped productivity potential.

But at the same time, Europe is held back by:

• fragmented fiscal policies,

• mismatched pension systems,

• inconsistent capital-market structures,

• slow decision-making,

• and a regulatory environment that is not built for speed.

I often think about Europe like a family business run by brothers, sisters, cousins, and grandparents. Name one successful business run this way. It’s a nice story, but it rarely scales.

Speaking of productivity:

“Meanwhile, Exhibit 3B illustrates how far and fast the U.S. has run ahead of its global peers this century when it comes to boosting labor productivity. Simply put, there is America, and there is the rest of the world, although China’s expanding use of AI, robotics and other means of automation have raised the labor productivity of China’s labor force this century. America’s early embrace and adoption of AI, in our opinion, will maintain the U.S.’ productivity lead over the rest of the world. For investors, consider some non-U.S. assets but core portfolios should be anchored in U.S. securities of all shapes and sizes, in our view.”

What Merrill Lynch wrote here is pretty similar to what I wrote above already. The U.S. still remains No. 1.

Grant’s Interest Rate Observer: Foreign Buyers Are Stepping Back

Jim Grant flagged something interesting this week:

“European-domiciled ETFs tracking the U.S. stock market swung to net outflows over the past month — a dynamic seen only a handful of times since 2020.”

Add to that:

• U.S. CAPE > 40 for only the second time in history,

• U.K. pension funds with £200 billion in assets reducing U.S. equity exposure,

• foreign allocations quietly easing off the S&P 500.

This is anecdotal, but it matters. Global investors are no longer treating U.S. equities as “the only game in town.”

Check in Later

As we move towards year-end, I will revisit the topic of U.S. vs. Ex-U.S. assets again and we will see where we stand going into 2026 again.

Have a great week.

Are we entering a structurally different interest-rate regime?

Nordea published a compelling piece that fits perfectly into this theme. You can find it here, and I recommend to read it. Their conclusion is blunt:

Borrowing needs in both the US and Europe are increasing materially at the same time as demographic trends reduce the global pool of savings. The US’s status as a safe-haven issuer is not guaranteed indefinitely, with interest expenses now exceeding defence spending and projected to rise further. The only short-term relief available – aggressive Fed rate cuts – risks undermining inflation credibility and may instead push long-term yields higher if market participants fear the Fed’s independence is weakening. In short, long-term rates may well rise even as policy rates fall, suggesting the era of persistently low long-term yields is behind us.

Michael Burry’s new Substack: a refreshing voice

Another thing I enjoyed this week: Michael Burry launched his Substack, and I immediately subscribed to the paid version.

I genuinely think he is misunderstood. He is not the perma-bear the media paints him to be. He is a cautious, Graham-minded value investor. His writing mixes anecdotes, history, and honesty in a way that is rare. He has no agenda beyond sharing his thinking.

I’m glad he’s writing publicly again, and look forward to reading.

Owen Lamont’s excellent note on a possible AI bubble

Owen Lamont from Acadian Asset Management published a short, readable piece asking: Are U.S. equities in an AI bubble?

His answer:

Probably not — at least not by the most reliable indicator: equity issuance.

Lamont’s argument revolves around one concept:

If executives believed prices were truly excessive, they would be issuing stock — not buying it back.

But this is what he sees instead:

• U.S. corporates have repurchased ~1 trillion USD over the past year.

• Scaled net issuance (12-month) is –0.9%, extremely normal.

• Historically, every major bubble was accompanied by massive issuance:

  • The South Sea Bubble (1720)

  • British Bicycle Mania (1890s)

  • The 1929 bubble

  • Japan in the late 1980s

  • The dot-com bubble (400+ IPOs in 1999; issuance peaking March 2000)

During bubbles, the “smart money” (firms) sells to the “dumb money” (optimists).

“The Third Horseman of the Bubble Apocalypse — equity issuance — is nowhere to be seen.”

My opinion is:

We definitely may have speculative pockets (AI infrastructure, cross-investing among Oracle, Nvidia, OpenAI, etc.), but the market as a whole does not reflect classic bubble dynamics. I expect equity returns to be lower in the future than they were over the last 10 years which is also reflected in my personal portfolio structure at The Tiny Family Office. I will publish more on that soon.

Closing Thoughts

This week I also published my first Thematic Report on Emerging Markets, rising consumer masses, and global FMCG. This is a theme I personally invest in. Not only because I like the sector and the predictability of cash flows, but also because it is unloved at the moment.

Other than that, I wish you all a great Thanksgiving.

Enjoy the time with your families and loved ones. And stop thinking about markets for a few days.

T. Rowe Price’s weekly update tells the same story2:

• In the U.S., Nvidia posted record revenue and raised guidance again. The stock opened higher and closed down 3% on the day, dragging indices with it.

• In Europe, the STOXX Europe 600 fell ~2.2%.

• Japan’s AI-related names sold off, and tech weakness pulled the Nikkei and TOPIX lower. At the same time, the Japanese government unveiled a JPY 21.3 trillion stimulus package, pushing the 10-year JGB yield to a 17-year high and weakening the yen.

We remain in that strange zone between year-end positioning and macro uncertainty neither bad enough nor good enough to set a clear tone. A possible peace deal in Ukraine may change that, but apparently there has now been some confusion around the author of the peace plan according to an article from Reuters. I highly doubt a deal will be possible shortly.

Francois Rochon: The Mistakes That Matter Most

I listened to the Wealthtrack Podcast this week featuring Francois Rochon, founder of Giverny Capital. If you like to learn more about Rochon I genuinely recommend this interview here with him: Compounding Quality. What struck me wasn’t a clever mental model but a simple truth: his biggest mistakes were always the companies he didn’t own because they “looked too expensive,” and the companies he sold too early.

It’s the reason I almost never sell unless the business fundamentally breaks. Missing compounders is the silent killer of long-term returns. A −50% loss on a 2% position is an annoyance. Missing a potential 20-bagger is catastrophic, just invisible on performance statements.

TCI, Visa, and Why I Started a Position

I revisited a couple of 13F filings, and one stood out to me:

TCI Fund Management (Chris Hohn) increased its stake in Visa.3

That alone doesn’t make a thesis, but TCI is selective, valuation-aware, and genuinely long-term. Seeing them add made me revisit Visa myself.

I initiated a small position. This is not THE fat pitch yet but acceptable in the current market.

Valuation:

Visa trades around 23× EV/EBIT, back to its 2018 valuation range. Not cheap but far less demanding than the mid-30× multiples during 2021–2022. Based on a quick napkin valuation last week, even with revenue growing at only inflation + 1%, Visa can still compound EPS at 7–10% due to its structural buybacks and operating leverage. The conversion into free cash flow of each increase in revenues is superb.

Current market fears may be a slow-down in spending and economic activity, Walmart or Amazon launching own payment systems, European alternatives like Blik or Wero. They all look overblown (to me). There is a structural difference between building a payment method and building the global settlement rails. Visa is the latter, it is a brand that stands for trust, and yes I sometimes may switch to Paypal or other payment methods when shopping online but it doesn’t change my overall spending habit by taking my Visa, Mastercard or Amex.

The brand still stands for trust.

Magellan Filings: Transurban

I also reviewed filings from Magellan’s Infrastructure Fund and the Magellan Global Fund. One name stood out:

• Transurban

  One of the purest listed plays on long-duration toll road concessions globally. Built-in inflation linkage, recurring cash flows, and significant optionality if real rates stabilise.

It remains on my watchlist.

A Worrisome Trend: College Graduate Unemployment

One issue that increasingly worries me: rising unemployment among recent college graduates in the US.

Labor market softening is hitting recent college graduates especially hard. Data from the Current Population Survey show a troubling pattern for young workers who have recently graduated. Young college graduates between ages 23 and 27 are experiencing unemployment rates that average 4.59% in 2025—a stark contrast to the 3.25% rate this same demographic experienced in 2019.4

Figure 1 also shows an uptrend in the unemployment rate of people with a Bachelor’s aged 25 to 34. It is not too step so it does not indicate a full stop in the job market but looking at the data from 2008 unemployment also crept up slowly until it suddenly gapped.

This is something I will be watching closely during the next months along with other economic data.

I wish you a great start into the new week!

This week connected three themes: China’s industrial rise, the coming robotics cycle, and the state of housing affordability. All of it framed by Buffett’s final letter which is a reminder of what matters beyond the noise.

China’s Industrial Machine Is Pulling Away

I received a letter from Quantex this week discussing robotics and China. I still have a very, very tiny residual position in the Quantex Value Fund that I’m not willing to sell. I enjoy reading their letters, the research, the conclusions. Sometimes I believe the managers are a bit too negative and they sell too many of the businesses they buy. I’m more of a collector in this context…

But the Quantex letter made one thing uncomfortably clear:

China is dramatically accelerating its robotics buildout.

Key facts:

• China installed 295,000 industrial robots in 2024

• Robot density is 2× the EU

• 57% of new robots are now domestically produced

• China added 426 GW of electricity generation in one year. Mostly coal of course while some countries are shutting down nuclear power…

  (Source: Quantex citing Jefferies)

To reinforce this picture, I’m citing from an article called “China, the United States, and the AI Race” from the Council on Foreign Relations:

China’s Ministry of Industry and Information Technology estimates that by the end of 2025, over 60 percent of large Chinese manufacturers will have adopted some form of “AI + Manufacturing” integration, and thousands of “AI-empowered” factories have already been certified nationwide. The country’s 14th Five-Year Plan calls for “comprehensive intelligent transformation” of industrial production, with AI embedded across 70 percent of key sectors by 2027, 90 percent by 2030, and 100 percent by 2035.

Now contrast this with Europe. We are struggling with high industrial energy costs, especially in Germany. Our carmakers are losing competitiveness. And when we talk about the future of AI datacenter power demand, energy availability and build-out speed matter enormously.

When I read articles about the “AI race,” the narrative is always China vs. the US.

Where is Europe?

China and Asia-Pacific remain attractive as macro themes. Governance issues in China are real, and I personally would never touch an individual Chinese stock.

Still, as long as we don’t stumble into a Taiwan conflict, for me it makes sense to own businesses selling into China and here I mean especially those offering brands and products that China cannot really replicate because they are not “sexy” enough. Brands. An LVMH bag will always be an LVMH bag, I believe.

The Next Big Theme: Robotics After AI

Robotics will follow the AI–datacenter buildout as the next major industrial cycle or at least the next hype wave.

Because of that, I often think about owning the enablers of robotics rather than the end products. The companies that supply the mission-critical components, whose parts cost a fraction of the robot but are almost impossible to replace. Price increases barely matter to the customer.

A few examples after short research:

• SKF or Timken – precision bearings

• Fuchs Petrolub – specialty industrial lubricants

Just examples, but this is the direction I’m exploring.

Housing: The Chart of the Week

Thorsten Slok’s “Daily Spark” chart showed something remarkable:

Median age of US homebuyers:

• 2010: 39

• 2025: 59

  (Source: Apollo – Daily Spark, Thorsten Slok)

  

Now mortgage lenders are proposing solutions straight out of a dystopian novel mentioned in this article by The Guardian. A 50-year mortgage is not financing. It’s an intergenerational debt instrument. I’m not sure what to think of it.

If we consider long-run purchasing power and government debt dynamics, the real value of a USD 2–4k monthly mortgage payment in 30 years might be laughably low but in my opinion that doesn’t solve affordability today.

I don’t think extending the maturity of debt fixes the housing crisis neither in Europe nor in the US. The only thing I’m certain of is that banks will like it.

Buffett’s Final Letter: “I’m Going Quiet”

Warren E. Buffett released what is effectively his last major shareholder communication at Berkshire Hathaway. You can find it here.

A few lines stood out:

• “I was born lucky - healthy, reasonably intelligent, white, male, in America.”

• “Greatness does not come from money or power.”

• “Kindness is costless but priceless.”

• “The cleaning lady is as human as the Chairman.”

It’s a strangely emotional document. I had to chuckle a few times. But actually it reminded me of something that really touched me.

The recognition that capital matters, until health or life pulls everything into focus.

Anyone who has ever faced the fear of losing a parent, a child, or their own health knows exactly what I mean. I personally have had the experience in my life and found this absolutely devastating.

You cannot buy health. Full stop. Only when you lose it or you actually have a reason to fear losing it do you realise its full value.

The world feels insanely fast-paced right now. Everything is new every day. Markets, headlines, noise. We spend our days thinking about money and prices. But maybe we should be thankful a little more often for our health, and keep our loved ones a bit closer tonight as we realise how truly wealthy we already are.

Closing thoughts

Pretty boring week in markets overall, though the noticeable move was higher government bond yields in Europe, the US, Japan and the UK. , especially on the long end. Equities were pretty much flat. Let’s see how this sets up into year-end.

I wish you a wonderful week!

Zoetis (ZTS) made new lows this week. It reminded me that even the finest companies can be poor investments when valuation drifts too far from reality. Quality matters, but price still writes the story.

Chipotle Mexican Grill (CMG) also sold off sharply after earnings. The brand remains one of the few fast-casual concepts that still feels relevant to today’s health-conscious consumer. Fresh ingredients, fast execution, strong brand equity. But even good stories need growth. Same-store sales have stalled while the multiple remains rich. Bill Ackman owns it through Pershing Square, and it is a name I would like to revisit myself.

This week I listened to Bill Ackman on Value Investing with Legends. A great conversation about how he built Pershing Square and his broader principles on business and investing. One anecdote stood out: the moment he realized he must ultimately make his own decisions, even after listening carefully to others.

Take advice, but own the judgment. No one else bears the result.

Ackman also reminded listeners that most good investment cases are simple. There are no XXL spreadsheets, you just need visibility on where future earnings come from. I try to simplify things the same way. Predictability of earnings is an under appreciated quality of good businesses. It makes life as an investor so much easier. But even there, humility matters. Just ask Diageo. Predictable as it seemed, consumer habits shifted (at least the market thinks so), and the “easy” story stopped compounding. We’ll see that lesson again, somewhere else soon.

Thematic Report: The System Can Handle the Debt — It Can’t Handle the Politics

This week’s Tiny Family Office report examined sovereign debt and political paralysis.

Most Western governments, remain fiscally stretched yet structurally unable to reform. Adjustment will come only when markets or demographics force it.

Spoiler alert: demographics won’t. For the next 10–15 years, the majority of voters will belong to the dependent and retired population — the very group most reliant on state transfers. The deeper issue may be the growing loss of trust in capitalism among younger people. When they feel excluded from moving up by working hard, buying a home, building prosperity. The system begins to lose legitimacy. If that promise cannot be kept, the real problem is not fiscal, but political stability itself.

For investors, this environment favors businesses with strong balance sheets, and pricing power. Government debt will end up in the income statement of companies in the end.

The AI Conglomerate

Grant’s Interest Rate Observer relayed an unusual Bloomberg story:

Bill Pulte, director of the Federal Housing Finance Agency, said that Fannie Mae and Freddie Mac are exploring ways to take equity stakes in technology companies.

“We have some of the biggest technology and public companies offering equity to Fannie and Freddie in exchange for partnering with them… because of how much power they have over the ecosystem,” he said.

It’s a curious sign of the age. Mortgage agencies are flirting with tech equity. If this AI-era blending continues, we may soon see a web of cross-ownership across industries, where the line between policy, finance, and private capital becomes increasingly thin.

What I’m Reading / Watching / Listening To

• Longleaf Partners Global Fund Commentary 3Q25: A global fund with a focus on real assets and consistent FCF growth. Positions in Rayonier and PotlatchDeltic reminded me of the timberland companies I had a look at a few years ago. Something worth revisiting.

• Podcast: Bill Ackman on Value Investing with Legends
  An entertaining, grounded conversation. I enjoyed it very much.

Chart of the Week

Thorsten Slok highlighted how equity returns over the past years have been dominated by the “Magnificent Seven”.

The chart is striking. But even even excluding those seven, the rest of the index has risen from 100 to roughly 250 since January 2019 which is not too bad either.

Market Recap

• S&P 500: - 1.63 % (w/w)

• MSCI ACWI: - 1.32 % (w/w)

• STOXX 600: - 1.3% (w/w)

• 10-yr Yields: U.S. 4.1 % | U.K. 4.35 % | Germany 2.65 % | France 3.46 % | Japan 1.67 %

• Gold: ≈ US $ 4003 / oz (−0 % w/w)

• Brent Crude: ≈ US $ 63 / bbl (−1 % w/w)

Shutdown ≠ Selloff: The U.S. government shutdown (now day 40) constrains data flow more than risk appetite. Markets remain fixated on AI and liquidity, not Washington drama. First signs of a deal appeared today.

Hype Check: Michael Burry resurfaced on X with early 13F filings showing puts on high-multiple AI names (NVDA, PLTR). The market still “buys the dip,” but leadership breadth remains thin.

Valuation matters, so does judgment. Both start with listening to yourself.

I wish you calm markets and a good start into the week.