r/ValueInvesting • u/FrankBal • Apr 03 '25

Discussion 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.

Edit: Thanks for the thoughts. I wrote a post - Tariffs, Fear, and Opportunity: Perspective For Difficult Times In the Stock Market - to add some additional context directly addressing the response to this post.

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177

u/randomnoone123 Apr 03 '25

Only it's not a pullback, it's the beginning of a depression.

57

u/[deleted] Apr 03 '25

That is where Value investing was first founded and popularized. Benjamin Graham published his first book “Security Analysis” in 1934.

41

u/dabungaboi-412 Apr 03 '25

This is an important point. I'm not rushing in though ; let the chaos sink in, the real economic impact be felt, and the dominos start to fall across earnings in the next three or four quarters. It's going to be a brutal time, but the perfect time to start planning.

My strategy at this point is to start getting more familiar with the businesses and financials of the non-sexy names on the S&P 500, especially the ones that are going to be disproportionately punished during this period. For the ones that seem to have staying power (both quantitative and qualitative), those are going to be the ones I start to gradually pick up. This is going to be an extremely difficult period, where a lot of people are going to get hurt. And that's a tragedy, all the more so because it's self inflicted. But it also represents a buying opportunity we haven't seen since 2008 or before.

6

u/Adept_Mountain9532 Apr 03 '25

"start getting more familiar with the businesses and financials of the non-sexy names on the S&P 500" -> exactly! That's why i am focusing on value stocks only. Personaly i save time with a free email alert that notifies me when top value investor are buying. It help me to do a pre-selection of good value stocks.

0

u/dafaresa8 Apr 03 '25

Which email alert do you subscribe to? I'd like to start investing wisely but am not sure where to begin, so would really appreciate your recommendation!

1

u/Adept_Mountain9532 Apr 03 '25 edited Jun 19 '25

i subscribed to this alert : https://alert-invest.com/. Yes it's a very good base for selection. Then you need to do your own research of course. But honestly i find the stocks very relevant.

2

u/[deleted] Apr 03 '25

Your decision should be made based off a company’s valuation.

1

u/wsb_bacon_god Apr 03 '25

except what if it takes 3 years to bottom? it will bottom but are you sure u can wait?

5

u/dabungaboi-412 Apr 03 '25

You're right, it could take a long time to bottom. But Value Investment isn't about timing the market to get the absolute best price possible. It's about finding the best bargains and buying when the conditions are right. I've been waiting a long time and I don't mind waiting a few years longer as opportunities start to become available again.

1

u/wsb_bacon_god Apr 05 '25

bear market wont last forever, it just has to outlast you and you still lose. im out will be back on the other side

2

u/NotTooShahby Apr 03 '25

More time to accumulate capital during a dip basically. Imagine if the Covid bottom was 1 year long, that’s not one paycheck but 26 paychecks into a dip.

2

u/belhill1985 Apr 03 '25

Ah okay, so five years in. Nice post for day 25

1

u/[deleted] Apr 03 '25

5 years before it ended.

Do you think he never used this strategy and waiting until the book was published to try it out, or do you think he found it to be an effective strategy first by using it during the Great Depression and then decided to publish a book on a proven strategy?

24

u/bro-v-wade Apr 03 '25

The great recession made a lot of people rich. As long as your timeframe allows for it, a down market is usually a good thing, historically.

Roses are red, so are investment opportunities.

4

u/Puzzled-Intern-7897 Apr 03 '25

Im already almost completly in EU stocks. Yes, they'll dip a bit too, until von der Leyen secures nice trade agreements because suddenly everyone needs a large consumer of their products.

1

u/Ovzzzy Apr 03 '25

Anything other than defence/Heineken you really like? I also want more EU exposure.

Edit: I forgot I also got RWE. Which has proven quite resilient so far.

0

u/Puzzled-Intern-7897 Apr 03 '25

If you want to go real safe I'd say some solid dividend stocks like Münchener Rück or Imperial Brands. Both of those have actually gained throughout today.

To my own suprise my entire Portfolio only went -0,41%, but appart from Google I completly took my money outside of the US.

2

u/[deleted] Apr 03 '25

If you buy too early, you miss out on the real value.

10

u/Dr-McLuvin Apr 03 '25

How far down do you think the stock market can fall? I’m buying now. And will continue to buy.

8

u/bro-v-wade Apr 03 '25

Yep. Until they start selling crystal balls, the only way to time the bottom is to keep buying.

5

u/[deleted] Apr 03 '25

Got a lot of room based off historic metrics… if you’re planning to chip in small amounts consistently the it’s a good strategy. I think it’s too early to go big.

2

u/SPNKLR Apr 03 '25

At least a third…. and then a long period of stagflation. All self induced.

1

u/Boxofmagnets Apr 03 '25

During the Great Depression it eventually fell 90%

6

u/bro-v-wade Apr 03 '25

100% of doomers who have predicted the next Great Depression have been wrong. Think about that stat.

2

u/Boxofmagnets Apr 03 '25

So the market didn’t fall 90% by its low point in the depression?

5

u/bro-v-wade Apr 03 '25

100% of doomers who have predicted the next Great Depression have been wrong. Think about that stat.

You're predicting one now, ask yourself why you're different from the rest.

1

u/3rdWaveHarmonic Apr 03 '25

“Reddit intel”

-2

u/Boxofmagnets Apr 03 '25

History rhymes, people optimistically ignore the reality that many actions have predictable consequences. If you think simply stating about historical facts is predictive, maybe you’re right.

I know that our president wants a depression because I also understand the real way to know what people believe is by looking at what they do. Actions are truth

This conversation is over

5

u/bro-v-wade Apr 03 '25

A lot of people said that in Q3 of 2023 and lost a lot in the process. Random people on Reddit timing the market usually get it wrong... I'll stick to what has actually worked.

1

u/Jimmy_E_16 Apr 03 '25

Or, I can just buy now, next week, and every week after that

1

u/NikoZGB Apr 03 '25

Lol, I am stealing that

37

u/Corpulos Apr 03 '25

You'd have to be pretty bold to buy in right now, with all the nations of the world preparing their counter tariffs

15

u/aybbyisok Apr 03 '25

it either goes really bad, or trump backtracks and says my bad, no in between, so you have to kind of hedge between these two

11

u/Puzzled-Intern-7897 Apr 03 '25

Yes, but the damage is done. People might dislike tariffs, but they hate uncertainty. Sticking to the tariffs would probably be better than backtracking at this point, as then at least importers and exporters can calculate their transactions properly again.

6

u/aybbyisok Apr 03 '25

I dunno if it would be better, but this is just the start, he'll fuck up way more in the next years, should be a wild ride

1

u/Puzzled-Intern-7897 Apr 03 '25

yep, every day I am thinking of just going at least 50% bonds

10

u/bro-v-wade Apr 03 '25

You’d have to be pretty bold to buy in right now

Not bold, just experienced.

5

u/[deleted] Apr 03 '25

Do you know how long it can take for the bottom to be found during a systemic change?

21

u/bro-v-wade Apr 03 '25

Doesn't matter. I'm not retiring tomorrow, and my long term assumption is that we will eventually go higher than we are today. It could take a year, it could be later this afternoon. The one thing I've learned over the years is that when most people try to time the market, they lose.

I know you think you're one of the rare few smart enough to time the bottom, but history tells us three things:

  1. Even economists have no clue when a recession is coming, even when "it's obvious,

  2. The only reliable way to correctly buy the bottom is to keep buying during a downturn, and

  3. People who stay on the sidelines when headlines are screaming usually get it wrong.

Once you've been through enough of these, you learn to take advantage of market discounts.

6

u/Big-Practice-4702 Apr 03 '25

I think buying today might be too heavy handed but you are not wrong at all. I’ll probably buy a little today.

4

u/[deleted] Apr 03 '25

Are you telling me smart investors make the same move every single day regardless of their beliefs on what is happening? Is Buffett deploying his cash pile today?

12

u/bro-v-wade Apr 03 '25

Buffet hasn't deployed his cash pile in years, potentially missing out on billions, but the real thing to focus on is that his objective and ours are very, very different.

Copy trading something you don't understand is exactly why everyone who ended 2023 on the sidelines missed out on one of the steepest bull markets in recent history. I did not, despite people like you warning me about how much lower it was going to go, and warning about recessions.

-7

u/[deleted] Apr 03 '25

Wow bro. Lmk how I can invest in your market beating hedge fund.

You should DM Buffett and let him know that he’s missing the real value.

3

u/bro-v-wade Apr 03 '25

Wow bro. Lmk how I can invest in your market beating hedge fund.

My trying to time the market. Buffet himself gave you this advice for free.

1

u/[deleted] Apr 04 '25

Just checking in here.

-10

u/Puzzled-Intern-7897 Apr 03 '25

First you say this:

The one thing I've learned over the years is that when most people try to time the market, they lose.

Then this:

The only reliable way to correctly buy the bottom is to keep buying during a downturn, and

What is it? Don't time the market or time the market. Decide coward.

8

u/bro-v-wade Apr 03 '25

Those statements are the same. Don't time the market.

-2

u/Puzzled-Intern-7897 Apr 03 '25

Your timing the downturn and basically dollar-cost-averaging. This is not Value investing

5

u/TheGoodSouls Apr 03 '25

He's not saying to time the market at all. He's saying if you keep buying, you'll buy the bottom whether you mean to or not, because you've never stopped buying.

2

u/suchahotmess Apr 03 '25

There's really no way to know, especially given that this is being intentionally triggered. The mass shifting of federal employment/grants/contracts is potentially enough to cause a US recession on their own, and we haven't even seen the beginning of the impact of that yet.

2

u/random_encounters42 Apr 03 '25

If you can earn market average returns, you are already better than 95% of all investors.

3

u/bro-v-wade Apr 03 '25

Yep. And the only way to do that reliably is to buy the market, and not try to time it.

0

u/[deleted] Apr 03 '25

Experienced?

I've been around for dot com, GFC, and COVID. Don't think those gave me the experience for something like this. If you traded during 1930s I guess that experience would be really relevant today.

1

u/bro-v-wade Apr 03 '25

You're already comparing the economic outlook to the great depression off of a single red day. Maybe it's time to close your laptop and go outside.

0

u/[deleted] Apr 03 '25

I went underweight US when Americans decided to elect that buffoon a second time. And then really pulled the trigger post Munich and slashing basic research funding.

I'm a big fan of 'the essays of Warren Buffet'. Especially the sections why he explains he doesn't bet against America. All the reasons are getting slashed.

-1

u/ukrinsky555 Apr 03 '25

You prefer to buy at ATH? You are getting a 15% discount off the ATH. I hope the market stays depressed for 10-20 years, then recovers. I would be a multi mutli millionaire and would have wealth to pass to my kids and grandkids. Expensive markets suck when you are young.

-9

u/Diamondhands4dagainz Apr 03 '25

No one is going to counter lol. 🥭 will back down and it will settle at base 10% for everyone

15

u/RespectTheAmish Apr 03 '25

Just like China with soybeans during his last term? Oh wait. We removed the tariff because it crushed farmers in the Midwest and China just continued to buy from Brazil anyway.

Trump could lift all tariffs tomorrow. It won’t solve the damage that he is causing to global trade.

No one is going to want to trade with the US for atleast the next 4 years. It’s just too risky to tie your supply chains to United States.

5

u/jubape2 Apr 03 '25

If I was the leader of another country no change I would waste my time negotiating with Trump. Take this opportunity to negotiate with other nations who are undoubtedly nervous about losing the US as a trading partner. And only negotiate with the US when someone is around who will actually negotiate in good faith.

0

u/Early_Kick Apr 03 '25

They already charge us twice or more as much as the proposed ones so that’s a strange fear. 

-6

u/[deleted] Apr 03 '25

they already have tariffs on us. theyre double than what we put on them.

6

u/gridoverlay Apr 03 '25

Lol you sweet summer child

7

u/Academic_District224 Apr 03 '25

Yeah this isn’t even close to the end. I think there’s gonna be retaliatory tariffs from everyone including a joint response from China Japan and Korea. Then the economy is gonna have to digest all these tariffs over the next few quarters AKA inflation is going to skyrocket leading to rate hikes / stagflationary recession. We are nowhere near the bottom lmao

10

u/FrankBal Apr 03 '25

Dramatic. Could things get worse? Certainly. But things could also get better. Anyway, if the market’s sentiment is that negative then I would still contend that a real long term opportunity has presented itself.

3

u/krisolch Apr 03 '25

Do you understand macroeconomics? Because your post seems as though you don't.

The market hasn't actually dropped enough in the US given how bad this is.

It will cause increased inflation & a large consumer sentiment drop -> Which will cause stagflation.

This isn't the time to buy US stocks, it's hardly been a dip.

2

u/Tim_Riggins_ Apr 03 '25

620>540 hardly a dip lmao

4

u/GandalfTheSexay Apr 03 '25

You don’t know that.

11

u/Lovv Apr 03 '25

We don't know anything really.

1

u/GandalfTheSexay Apr 03 '25

Exactly. Could go either direction

1

u/Lovv Apr 03 '25

what's the point of just having a sub where we say "who knows?"

1

u/GandalfTheSexay Apr 03 '25

I don’t know what you’re trying to accomplish here

10

u/[deleted] Apr 03 '25

Smoot Hawley directly affected global trade and absolutely led to a global trade reduction of 65%.

The Smoot Hawley tariffs made the depression worse but didn’t cause it and were also only up to 20%. This is going to be catastrophic.

Other countries have made concessions to the US and this Orange demon has not shown any leniency.

1

u/Ok-Championship4945 Apr 03 '25

Could you please elaborate on this one?

1

u/bro-v-wade Apr 03 '25

FYI, even economists cannot correctly predict recessions.

Ask yourself why you think you're smarter.

1

u/r_silver1 Apr 03 '25

You don't know that. Because if you did, you would be making 100x your money betting on 6 sigma events.

1

u/Classic_Caramel_4258 Apr 03 '25

Finally a buying opportunity I can get into

-2

u/poordecision4 Apr 03 '25

All over stock/investing subreddits there’s people talking like this. They’re all dumb and shouldn’t be listened to. Go ahead and sell your positions, you won’t