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By Sean Peche, founder and portfolio manager, Ranmore Fund Management - a UK-based value investment firm.

A year ago, President Trump had just won the 2024 US election off the back of his "Agenda 47" plans to put America First, by: cutting regulations, turning the U.S. into a manufacturing superpower, ending inflation, maintaining the U.S. dollar as the world's reserve currency, and ending the war in Ukraine. Perhaps given the hope of higher U.S. corporate profits due to the Ai boom and reduced regulations, you'd have forecast the S&P 500 outperforming other global markets. And perhaps given Trump's affinity for crypto, you'd have been positive on the outlook for Bitcoin.

Well, a year later, the Ukraine war is still raging and the US has invaded Venezuela, there's been little change in US inflation (2.7% v 2.9%), the US dollar has weakened by 8% vs. a basket of global currencies, Bitcoin is down 6% (in a weak US dollar) and stocks outside the US beat the US by nearly 15%, the widest margin since 2009 (MSCI All Country World Index ex USA vs S&P500).

These examples remind us that you can't forecast the future. It's why we are value investors who don't pay too much for "the future" and why we prefer a diversified portfolio rather than a few "conviction" ideas.

We prefer to buy companies when they're out of favour and the market is pessimistic about the outlook because that's when you're not paying for "the future". I......................

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