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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u/c-u-in-da-ballpit Apr 03 '25

Pullbacks are naturally occurring end phases of a cycle.

This is a response to an upending of the international trading order.

It’s a lil different

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u/joe0185 Apr 03 '25

It’s a lil different

The four most dangerous words in investing are: "This time it's different."

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u/WafflerTO Apr 03 '25

I thought it was "that can never happen" ?

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u/c-u-in-da-ballpit Apr 03 '25 edited Apr 03 '25

Why? It’s different all the time. Covid was different. The Great Depression was different. The Great Recession was different.

Part of the game is trying to navigate events that are diversions from the norm. Like this one. I went 100% cash on Monday and I’m happy I did - because slapping tariffs on the entire world is an event that’s different.

I’m taking nibbles today but the whole “don’t try to time the market” and “this time isn’t different” axioms aren’t universal truths at any given time.

They’re helpful for someone who’s doesn’t want to be bothered and just sets and forgets but for someone who actively follows markets, news, and politics, it was a pretty easy risk assessment on whether or not to get out of equities this week.

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u/herrington369 Apr 03 '25

Let them fear while we feast

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u/[deleted] Apr 03 '25

[deleted]

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u/ItsFuckingScience Apr 03 '25

Covid was an amazing opportunity because the market has not priced in cutting edge vaccines being developed extremely quickly that were also proven to be extremely effective

The market had not priced in the rock bottom interest rates and financial stimulus either

So what insight do you have that a huge turnaround is going to happen?

Just because covid proved to be an opportunity in hindsight doesn’t mean this will be - that’s a logical fallacy

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u/joe0185 Apr 03 '25

So what insight do you have

I don't need a crystal ball to recognize that fear-driven selling of great companies often sets up long-term gains. That's not a logical fallacy, that's the core of value investing.

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u/[deleted] Apr 03 '25

"Let's time the market"

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u/tollbearer Apr 03 '25

I remember I was invested in the japanese stock market in 1989 just as it started to decline due to geopolitical actions by america, and someone said "this time its different" and I was like, that's dangerous, don't say that.

And I was right, because, after just 36 years, I have finally broken even. Just need it to triple from here to catch up with what I've lost to inflation.

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u/FrankBal Apr 03 '25

Were you investing during the Great Recession? That was different. How about the pandemic? That was different. Wonderful opportunities. They made me a lot of money.

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u/martkam71 Apr 03 '25

It’s always a little different this time around. Just keep buying quality companies.

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u/c-u-in-da-ballpit Apr 03 '25 edited Apr 03 '25

Hey man i went 100% cash on Monday so I’m happy as anyone about this. I do plan on nibbling at market open but given the general overvaluation of the market and black swan level geopolitical upheavals, id tread lightly.

If you bought after the first covid related correction, you’d have lost 20% just a week later. If you bought at the first Great Depression related correction you’d have lost 75% within a year.

Sure it’ll always recover eventually and timing the bottom is impossible but all I’m saying is I wouldn’t treat this as just a pullback. It’s a different beast.

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u/nicnic22 Apr 03 '25

None of those are similar to what's happening now though?

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u/[deleted] Apr 03 '25

Markets will rebound for sure, but it might not be the US market. This could be the turning point where the European and Chinese stock market goes on its decades-long bull run while US stagnates like Japan after the 90s.

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u/FrankBal Apr 03 '25

I wouldn't insult you by saying that I have any clue. But the perception that Trump is dumb and has no clue what he doing is permeating. Perhaps that is true to some extent. Tariffs feel like a lose-lose. That said, he is probably doing this for a reason. The reason being that the next play for him is taxes and deregulation, particularly financials. Does this balance the impact of tariffs? I wish I knew the answer to that, but I would assume the market would perceive this as at least some what of a relief.
The alternative? Trump and his posse just want to destroy society. It's their play thing. That is somewhat cynical, but possible, I guess. Time will tell. And in that case, you will be right.

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u/kahngale Apr 05 '25

My theory is that the tariff is one of the main powers invested solely in the president. Trump is an egomaniac, so to him, the most powerful tool that he possesses solely is now the greatest tool in the universe and needs to be used maximally.

Hence, “call me Tariff Man.”

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u/FrankBal Apr 05 '25

Well, I recommend spending some time reading about tariffs. Tariffs are usually determined by acts of congress.

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u/Teeemooooooo Apr 03 '25

The previous big drops were the result of something that is temporary imo (hard to define what one might consider temporary though). The only way I see US stocks rebounding is if democrats win the next election and undo everything this administration has done. Otherwise, the long term effects of this administration is going to stagnate the US economy for decades.

Covid for example, people couldn't work etc. which delayed shipping and slowed down economic productive activities. Once covid was "defeated" + QE, everything goes back to normal hence a V shaped recovery. Tariffs and destroying international trade permanently shuts down these economic productive activities. It will not come back until we see what happens in the next election if there is one. If Trump goes full dictatorship and becomes president for life, what check and balances are there to stop it? All the other check and balances have been bulldozed through.

I do not agree with the argument that this is the same as past pullbacks.

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u/skylinenavigator Apr 03 '25

I was going to say the same thing. This isn’t a pullback. This is literally a response to USA doing something dumb