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Weekly Update 28 April 2025

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This content is provided for information purposes only. It is not a recommendation to buy, sell or hold any security.

Market gloom is thick in the air — with some justification.

Consumer sentiment is depressed, US inflation expectations have jumped, and businesses have turned cautious. Individual investors are the most bearish they have been in years, matching the tone of newsletter writers and hedge funds, whose portfolios have the least long exposure and the most short exposure in half a decade. yardeni.com/charts/bull-bear-ratios/

There are good reasons for the gloomy mood: www.ft.com/content/4aa1d7d7-4162-4e25-a6d6-a174a9626681

1. Over-rosy Wall Street targets. Consensus still pegs the S&P 500 at just under 6,000 by year-end 2025, a view that looks detached from today’s fundamentals.

2. Tariff shock. The effective US tariff rate has increased from 2.5% to roughly 28%, a move that independent research suggests could slice S&P 500 earnings by nearly 20%.

3. Stretched valuations. The S&P 500 forward P/E hovers near 19 versus a pre-Covid norm around 17 — almost twice the 10 P/Es seen in past recessions.

4. Fading “safe-haven” premium. Policy turmoil is chipping away at America’s reputational edge, yet US equities still trade at a 50% valuation premium to the rest of the world.

5. De-rating risk. A slide back to a 17× forward P/E implies an index level near 4,500 — roughly 20 % below today.

History says deep pessimism often sets the stage for a bounce, so the S&P 500 could prove resilient in the near term. Still, with US economic momentum rolling over after a 2.5-year upswing, strength looks to me like a selling opportunity.

Our portfolio is tilted toward Europe, where Trump-era pressure is catalysing fresh investment and policy support. Should US credibility erode further, capital flows into European assets could accelerate.

I anticipate EURUSD climbing to 1.20 this year and the S&P 500 weakening once tariff damage shows up in Q3 earnings. At the same time, I believe European indices will outperform, helped by undemanding valuations and expectations of a brighter economy in 2026-27. The strategy, therefore, remains to keep riding Europe’s relative strength.

𝟮𝟬𝟮𝟱 𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲
@triangulacapital +12.8%
SWDA.L -1.9%

𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗰𝗵𝗮𝗻𝗴𝗲𝘀
None

Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk. Past performance is not an indication of future results.

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© Triangula Capital L.L.C-FZ 2025 | All rights reserved.

Disclosures

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFD assets.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

eToro (Europe) Ltd., a Financial Services Company authorised and regulated by the Cyprus Securities Exchange Commission (CySEC) under the license # 109/10.

eToro (UK) Ltd. is authorised and regulated by the Financial Conduct Authority (FCA) under the license FRN 583263.

Your capital is at risk. Other fees may apply. For more information, visit etoro.com/trading/fees.

Pietari Laurila is not a registered investment advisor and does not offer investment advisory, fund management or wealth management services.

This page is provided for information purposes only. It is not a recommendation to copy the Triangula Capital strategy or to buy, sell or hold any security.

2009-2020 performance figures are from Pietari’s personal Interactive Brokers account. They are time-weighted returns calculated in accordance with the Global Investment Performance Standards (GIPS).

From 2021, performance is calculated by eToro.

Past performance is not indicative of future results.

Track Record

It is often said that past performance is not a guarantee of future performance.

That is true. But there is also some evidence indicating that portfolios that performed better in the past, do perform better in the future.

“[…] top-decile prior-alpha funds produce annual future alphas of about 150 bps, net of fees” Source

Risk warning: That is only one study. In general, past performance is not indicative of future results.

Aligned Incentives

Pietari invests the majority of his net worth in the strategy. This ensures that his interests are aligned with investors who copy the strategy.

“Funds with high-incentive contracts deliver higher risk-adjusted return, and the superior performance remains persistent. The top incentive quintile of funds outperforms the bottom quintile by 2.70% per year” Source

Risk warning: Pietari holds accounts with multiple brokers and may therefore have a conflict of interest when deciding which accounts he should trade in first.

Unconstrained Investments

The strategy has fewer constraints on its investments than traditional mutual funds.

The strategy portfolio can be invested in stocks, bonds or cash and these allocations can vary over time.

Compared to traditional mutual funds, the strategy also:

  • holds fewer securities
  • trades more
  • avoids following the index

Each of these points has been shown to be an important predictor of portfolio performance.

“We […] find that portfolio concentration is directly related to risk-adjusted returns for institutional investors worldwide” Source

“A one-standard-deviation increase in turnover is associated with a 0.65% per year increase in performance for the typical fund” Source

“We find that truly active funds significantly outperform closet indexers. Further, we find that the truly active funds are able to outperform their benchmarks on average by 1.04% per year” Source

Risk warning: Concentrated portfolios with few positions can suffer large losses if bad news arrives about any of the companies in the portfolio.

Cheap Stocks in Cheap Sectors

The strategy invests in geographies and sectors where values have collapsed due to macroeconomic problems.

Within these geographies and sectors, the strategy overweights stocks that trade at low valuations on measures such as price-to-earnings or price-to-net asset value.

Every stock in the strategy portfolio must also be a good company, with no obvious red flags or long-term threats to its business model.

The aim of the strategy is to maximize returns, even if this means taking more risks than usual.

Risk warning: The strategy portfolio tends to be concentrated in risky stocks, which means that its losses in any market downturn will likely exceed those of the market index.