Markets were rattled this week after President Trump announced a sweeping tariff policy that many economists warn could trigger a global trade war—and potentially a recession. The new plan includes a 10% baseline tariff on all imports and sharply higher duties—up to 54%—on goods from China, Japan, South Korea, Taiwan, and the EU.
Global markets plunged in response. The Nasdaq entered a bear market, the S&P 500 dropped over 9% for the week, and the Dow closed down nearly 8%.
Countries have already fired back. China imposed a 34% retaliatory tariff on U.S. goods, announced export restrictions on rare earths, and added 11 U.S. firms to its “unreliable entities” list. Canada readied countermeasures, and the EU condemned the U.S. action as unjustified. Japan’s prime minister called it a “national crisis.” Fears of a tit-for-tat trade war are mounting, and JPMorgan now places a 60% probability on a global recession by year-end. Oil prices dropped, bond yields plummeted, and the VIX hit its highest level in five years.
In this environment, fear is driving the conversation. Pundits and investors alike are asking whether this is the beginning of an economic crisis.
Recognizing the difficult times ahead, I posted this on the subreddit, /rvalueinvesting yesterday.
“Remember, This Is The Pullback We’ve Been Waiting For
If you’re a long-term investor who even casually cares about valuation, this market has been tough to navigate for a while. Pullbacks are always something we say we want, particularly as value investors, but they usually come when things are scary. Financial crisis, global pandemics, policy shocks… the discount never shows up gift-wrapped.
Yesterday’s tariff news felt like one of those moments. It’s vague, feels arbitrary, and creates a lot of uncertainty. It feels scary. And yet, that’s exactly the environment where opportunities show up.
I’ll admit it, days like today make me uneasy. But as an investor, I remind myself that underneath the noise, what’s really happening stocks are getting cheaper.
And that’s what we’ve been waiting for.”
The post has received over 550k views so far and sparked a mix of thoughtful dialogue and outright frustration. My intention wasn’t to be political. My aim was to provide perspective and encourage a reasoned response to a very difficult situation. But the comments reminded me just how easy it is to be swept away by the emotional tide of “this time is different.”
Some Perspective
Let’s take a step back.
In 2008, I was just getting started in my investing career. I worked on the 12th floor of a commodity trading company. I remember the day Lehman Brothers collapsed. The stock market was had already gone through its bouts of volatility, but on this day the financial crisis became real. I remember management rushing past my desk, trying to assess exposure. My screen was a sea of red, and stocks faced difficult days ahead. Despair lingered in the air.
It felt hopeless.
Five years ago, the world shut down. COVID had spread globally. There were travel bans and stay-at-home orders. Economic activity froze. There was no cure for the novel coronavirus. No clear path forward. People were sick. Many were dying. The market fell day after day. The red index levels accompanied by death tallies.
It felt hopeless.
And now? Today, fear has a different name. Tariffs. Trade wars. Political vitriol. Many Redditors expressing that this time is different; that the crisis is self-inflicted. Some claim that the president and his cabinet are purposely destroying our country. The fear is undoubtedly real. But again…
It feels hopeless.
This emotional pattern is familiar. And for investors, it’s worth remembering what tends to follow: Recovery.
Navigating the Uncertainty
This site—Arbalist Money—isn’t about trading the news or making macro calls. It’s about finding high-quality businesses at reasonable prices. It’s about long-term value creation. And while tough times don’t exempt great companies from pain, they do tend to highlight which ones are built to last.
Check out recent articles like:
- Magnificent 7: Which Stocks Offer the Best Value Post-Pullback?
- 5 High-Quality Stocks to Watch During This Pullback
- S&P Global vs. Moody’s: Better Investment in 2025?
The pullbacks, crashes, and panics; whatever you want to call them, can be gifts in disguise if your timeline stretches beyond the next earnings report. Even at the index level, if your strategy involves owning the Dow or S&P 500, history suggests that buying into despair is often a good bet. Not immediately. Not next week. But 10, 20 years from now? You’ll probably look brilliant.
So, here’s what I’m doing: I’m a buyer of this weakness. Slowly, incrementally.
I’ve kept a portion of my portfolio in cash, mostly in short-term Treasury’s, specifically for a moment like this. I don’t know where the bottom is. I never do. But I know how to recognize great businesses that create long-term value. And those are the businesses I’ll be adding to. They are the compounders with strong moats, disciplined management, and a long runway for growth.
I need to be clear: I do not want to discount the severity of this moment. This does not mean the fear is unwarranted. It doesn’t mean the pain isn’t real. But in times like this, some perspective can keep us from making mistakes.
I am staying focused on the long-term strategy which has served me well.
Stay tuned.
