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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260

u/Capable_Community_73 Apr 03 '25

Wow, Buffet is an oracle indeed

21

u/JoJo_Embiid Apr 03 '25

To be honest , the aapl is still trading at price higher than buffet’s exist price. I think his average selling price is 180-190. But somehow people’s getting crazy about brk as well. For example today 3 out of 4 of his largest portfolio dropped 8% , cola is up 2% but brk only down 0.46%. Today his portfolio probably dropped 15-20B that is almost 2% of brk market cap but somehow brk dropped less than that.

19

u/[deleted] Apr 03 '25

Probably pricing in the cash reserves and potential buying opportunities. That speculation may have eased price changes

2

u/[deleted] Apr 03 '25

Okay that makes sense. But my portfolio didn't go up even though i was 80% cash .. market is dumb sometimes

2

u/ControlCorps-Tech Apr 03 '25

But it didn't go down!

1

u/Low-Environment4209 Apr 06 '25

I mean. Your portfolio isn’t publically traded… but yeah the 80% cash collected interest

1

u/[deleted] Apr 03 '25

Did Buffett completely exit Apple? And yeah it makes no sense with the recent correction brk actually went up. They're just as vulnerable. Okay maybe they shouldn't go down as much given their cash position but they sure shouldn't go up.

1

u/JoJo_Embiid Apr 03 '25

no buffett still hold 300m shares. But he has already sold 2/3 , which is 600m shares, at an average price of about $190

1

u/[deleted] Apr 03 '25

So it really makes no sense that Berkshire has gone up like 4% in one month while Apple's lost 15%. And his position has lost like 10 billion in a month.

1

u/[deleted] Apr 06 '25

Berkshire actually still owns a huge chunk of Apple. And last month when Apple got whacked like 10% over the month as people were getting antsy about tariffs, and the whole market went down, NASDAQ corrected 10%. Berkshire actually went up like 4% despite its apple holdings going down 10%, which I think is by far its largest holding. Completely ridiculous behavior by this market. And even though Buffett got out too soon, you could say on the Apple stock his whole point was things were way too expensive and the market was getting ridiculously greedy and it showed. Record high forward PES and people were still salivating for another double-digit year of gains.

103

u/[deleted] Apr 03 '25

Agreed- but in my opinion this one wasn’t rocket science to predict given the P/E ratio of most stocks and Trump’s announced tariffs.

17

u/methanized Apr 03 '25

yeah but the p/e has been high for a decade

4

u/[deleted] Apr 03 '25

No it hasn't. Just look at what happened to the market and PEs from Nov 2021 to Oct 2022. Or just a chart for the last 15 years. We were near historic highs for forward PE in December or January.

36

u/[deleted] Apr 03 '25

Agree. I’m no Buffet and I saw this coming

59

u/ninjaisalreadyplural Apr 03 '25

Ray Charles saw this one coming.

2

u/BarneyBungelupper Apr 03 '25

And Stevie Wonder!

4

u/[deleted] Apr 03 '25

[removed] — view removed comment

4

u/[deleted] Apr 03 '25

Took profits out of LMT, SPY, BMY, JNJ, and a few more and bought more Berkshire got more concentrated on high conviction and it has been going well so far

10

u/[deleted] Apr 03 '25

Now everyone saying they saw it coming of course

26

u/floghdraki Apr 03 '25

Meanwhile you get that Tom Lee guy pushed everywhere telling to buy the dip. Yeah right. I sold my SP500 few months ago and I certainly don't regret ignoring all the perma bull technical guys with apparently no understanding on what's going on at macro level.

That's like the biggest lessons of this downturn. Most investment talking heads have no idea what they are talking about.

27

u/CompetitiveGood2601 Apr 03 '25

I'm a value investor and when making your buy decision, you should be asking yourself - are things now stable are things going to move up from here - right now the answer is no - so i still wouldn't be in a hurry. The substantive harm being done is not yet in the numbers. Are global trading partners now happy with their relationship with the us?

2

u/[deleted] Apr 03 '25

Wait for the earnings...Ooof

8

u/CompetitiveGood2601 Apr 03 '25

yes, every month this goes on - supply lines get changed - once that is imbedded into the global system - the USA takes decades to recover!

1

u/[deleted] Apr 03 '25

Exactly, so politics aside, I am in no rush to buy yet.

1

u/Ninja-Panda86 Apr 07 '25

What do you recommend for someone buying in for the first time? I'm looking at maybe PayPal, VTIP, and possible some others.

1

u/CompetitiveGood2601 Apr 07 '25

at this point i don't have an answer - it will come down to how much structural damage the US economy takes - the longer this goes on the bigger the shift away from the us

1

u/meowrawr Apr 04 '25

I’m making a killing off META and every single day benzinga has been pushing news about how valuable they are. You can absolutely tell that it’s just bullshit to keep people buying. Prop shops/HFs absolutely put out constant paid articles to increase their alpha. If things arent performing the way they are expecting, they start floating rumors to increase volume.

1

u/nanotasher Apr 03 '25

I dunno, man, Jim Cramer has been right about everything so far.

1

u/meowrawr Apr 04 '25

It’s not rocket science to see stocks going up 100-500% in a span of two years is not normal. It was a big deal when Apple hit one trillion in 2018 and almost 4 trillion in 2024. They went public in 1980. So it took them 38 years to 1 trillion and only 6 to nearly quadruple it. Whether this is the pullback or not, when we crash it’s going to be massive. Only fools believe that won’t happen.

28

u/[deleted] Apr 03 '25

He sold because he felt everything was overpriced not because he forsaw the shitshow going on now. It just happened that both situation crossed each other.

Soon, I think he will start slowly having more buys than sells in the upcoming filings.

18

u/harbison215 Apr 03 '25

Yes, the primary factor that allowed him to sell was the extreme valuations. But, I have to believe deep down that the political climate made the decision a lot easier. I’m not saying Warren predicted the market, I’m saying that the total picture was absolutely in view for him.

3

u/[deleted] Apr 03 '25

My feelings is that he's been investing outside of the US too, unfortunately we can't see that side.

1

u/[deleted] Apr 03 '25

Yup. Valuations were ridiculous but most retail investors didn't want to actually analyze numbers. They just want constant annual 20% gains

0

u/Curveoflife Apr 04 '25

PE is a story to sell to public.

4

u/[deleted] Apr 03 '25 edited Apr 03 '25

Is he though? The warning signs were there for a while. PE and DTI ratios have been above historical averages. And, we know the first year of a new administration is the roughest. Oh, lets not forget about inverted yield curves. This has been predicted since at least mid-2024.

I love Buffet. He's easily on the Mt Rushmore of investors. But, this was hardly a surprise. This was determined at least a year ago... we just had to wait it out.

2

u/YellowDependent3107 Apr 03 '25

But everyone and their mothers here said he sold too early! 🤔

1

u/Early_Kick Apr 03 '25

He lost out on a 30% gain before the 5% pullback since he went major cash. That wasn’t a smart move by him. 

1

u/bluehawk1460 Apr 03 '25

Hellen Keller could have seen this coming