Value Column by Hans Peter Schupp

15 MAY, 2026

Stay calm and seize opportunities

Hans Peter Schupp, managing partner of Fidecum AG and advisor to the Contrarian Value Euroland Fund (ISIN: LU0370217092), explains how he is steering the portfolio through the turmoil of the Iran war.

„In the short run, the market is a voting machine but in the long run, it is a weighing machine.” — Benjamin Graham

Benjamin Graham was convinced that stock prices are influenced in the short term by investor sentiment and opinions – much like during an election. In the long term, however, a company’s actual value and earning power – that is, the weight the company brings to the scale – determine its price performance.

The influence of short-term sentiment is particularly evident during times of geopolitical turmoil, such as the Iran War. Individual statements by politicians are enough to cause massive price swings – not because anything has changed in the companies’ prospects, but because the market is nervous.

But especially during such periods, staying less active is often the better decision for investors. Not every political statement warrants an immediate investment decision. Those who react to every bit of excitement by buying or selling usually end up playing catch-up. That generally leads to frustration. Patience is the better guide.

Of course, like everyone else, I don’t have the slightest idea how this conflict will unfold in the short term – that is, over the next three to six months. However, I am convinced that we will eventually return to some sort of normality. Donald Trump’s escalation toward Iran was an attempt to compensate for domestic political weakness through foreign policy. If people’s daily lives do not improve, a correction will set in sooner or later.

Besides, this isn’t the 1970s. Today’s global economy is far less dependent on oil than it was back then. At around 2 percent, crude oil production accounts for just under a quarter of what it did during the Iranian Revolution in 1979. The apocalypse is not coming.

The most important point investors should consider regarding the Iran issue is therefore independent of when and how the conflict ends. The key question is: Assuming all of this ends one way or another in the foreseeable future – do we really believe our portfolios should look any different than they do now? If so, why? If not, why should we even look into the details of how the Iran conflict unfolds? It seems foolish to me to pursue an investment strategy right now that differs fundamentally from the one followed before the start of the Iran operation.

Of course, at the start of the Iran conflict, we took a close look at the holdings in our portfolio and examined whether anything had changed structurally for these companies. The answer in every case was “no.” That is why we have not made any changes whatsoever to the portfolio’s fundamental strategy or to our active stock selection.

Nevertheless, we have been more active than ever in recent weeks. Normally, our portfolio turnover is around 25 percent per year. In March alone, it was already ten percent. The reason for this lies in the enormous price fluctuations. They significantly altered the weightings of individual stocks in the portfolio. In such cases, we regularly reset the weighting to the initial level, thereby taking advantage of the countercyclical opportunities offered by a volatile, politically driven market.

One example is the performance of our portfolio holding Lanxess (ISIN: DE0005470405). Our fundamental assessment has not changed since the start of the Iran conflict. You can read about it in the column from October 4, 2025: https://en.fidecum.com/column-58-chemicals-in-a-cyclical-downturn-opportunities-for-investors/.  However, the stock price fluctuated between 12 and 22 euros. In our view, prices around 12 euros represented a significant opportunity. By adjusting the weighting, we nearly doubled the number of LANXESS shares held in the portfolio. Later, after the price recovery, we reduced the position by nearly half again to lower the percentage weight in the portfolio to the desired level. We took a similar approach following sharp price increases, such as with ENI (ISIN: IT0003132476), or following price declines, such as with Volkswagen (ISIN: DE0007664039).

Political uncertainty is unsettling, but it is not necessarily a disadvantage for patient investors. We are confident that a company’s intrinsic value and earnings power – in other words, its fundamental strength – will increase its market value over the long term. In the meantime, we generate additional returns by making adjustments where sharp price movements have significantly shifted the weightings in the portfolio.

Our investment approach

For 30 years, the Contrarian Value Euroland Fund has adhered to the principle of investing in undervalued European companies with solid business models and long-term potential. We do not view our holdings merely as positions on a stock list, but rather as if we were acquiring the entire company. This inevitably results in an approach that is less influenced by short-term market movements than by the question of whether the business, valuation, and outlook are aligned.

About the Author: Hans Peter Schupp is a member of the Executive Board of Fidecum AG and an advisor to the Contrarian Value Euroland Fund.