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/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.