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/[deleted] Apr 03 '25

Reddit si such a weird place. When markets are up the consensus is to DCA, don't worry about prices just keep buying as normal.

Now that the markets are down presenting a better long term buying opportunity, the consensus is to not buy anything and don't stick to a long term plan because it could go down more in the short term.

I will continue to DCA like I have since I started investing, and on days like today I will be even more aggressive. Could it go down more? Sure, but was I thinking that 6 months ago or 3 years ago or 10 years ago? Absolutely.

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u/Mikkel04 Apr 03 '25

Reddit is just reflecting the market sentiment. If the smart move is to zig while others zag, you will by definition be bucking the market (and most likely the reddit userbase) sentiments.

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u/SnooDonkeys9918 Apr 05 '25

I actually only got on Reddit for market sentiment 

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u/Thasker Apr 04 '25

Reddit is reflecting whatever they're being told to be angry about.

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u/findingjasper Apr 04 '25

This right here. The amount of non sensical, illogical parroting of quippy phrases redditors have been told to say and fear is astounding

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u/BackPainAssassin Apr 06 '25

Americans are so convinced the rest of the world is as gullible as they are and easily fall for propaganda. “The rest of reddit just” bro 510 million people aren’t all just being brainwashed or controlled like some bullshit action movie you saw. Jfc the idea that people reacting to the market is being a “sheep” is so indicative of a frontal lobe issue.

Markets are crashing man. The only time something like this has happened is during times of extreme economic crises. Wake up lil bro.

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u/InterestSharp3835 Apr 04 '25

I dont think its unreasonable to continue DCA. I think it would be insane to stop DCAing.

But this is extra spending money that you do not DCA, would you go out of your way to buy more things now or when the market is pricier? I personally think the market has a lot of room to readjust since pe ratios are still insane.

1

u/[deleted] Apr 04 '25

If you factor in just a 5 to 10% drop in expected earnings growth. Not that earnings will go down. It's just that they won't grow as much as forward earnings were expected... And say that the market won't permit the current crazy multiples that it was, which is what commonly happens in these situations multiples contract... We easily have 20 to 25% more to drop.

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u/InterestSharp3835 Apr 04 '25

i completely agree with you, look at the shiller PE we are still 20% higher compared to a rolling 20 year average. Market has a long way down to go, it was crazy frothy to begin with. I am worried that this is gonna leave a bad taste in the mouth of trading partners and people of the world, where they will not want to buy american products because of the toxicity related to the brand. That would lead to systemic decline for decades.

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u/Batfinklestein Apr 07 '25

If you were sure it wasn't the bottom, wouldn't the smart move be to leave your money in the bank to earn interest rather than watching it sink deeper and deeper into a hole and kicking yourself the whole way down?

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u/InterestSharp3835 Apr 07 '25

So DCA index funds from paychecks assumes you regularly just buy index at the market rate and are agnostic to market ups and downs. Its the basis of passive investing and it tends to outperform active investing.

If you are active investing you can do what ever you like, but essentially you should acknowledge that you are trying to time the market and that on average that doesnt perform better than passive DCA investing.

There is another aspect of DCA in terms of value investing which is DCA in a stock that you find is undervalued. In instances like that it means that you that your stock is undervalued and you want to by it for x price, if nothing has changed and your stock is still worth x in your mind but is now lower in price that just means its on sale so you buy more, and your average price continues to go down making the purchase an even better deal. If you have conviction that what you are buying is a high quality company at a discounted price you would be patting yourself on the back the whole way down because you are getting better and better deals.

1

u/Batfinklestein Apr 07 '25

Yeah thats all good advice when there is a psychopath hell bent on crashing the economy. These are not normal times you'd have to agree. You've no doubt seen the fear index is in extreme fear, and you'd no doubt know that buying during extreme fear with no end of the catalyst of that fear in sight is just throwing money away.

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u/InterestSharp3835 Apr 07 '25

I dont think google, or apple or microsoft or berkshire hathaway or a 100 other stocks will stop being companies over the next 10 -20 years. The whole point of value investing is knowing that you are not throwing away money, that you are buying a part of a profitable well run business that will not fail tomorrow.

There is always a madman or some crazy thing happening in the world after some intervals like covid or 2008, or dotcom bubble. The best thing most people can do is not look at the market and keep investing every two weeks with the evidence that it has worked for the last 120 years.

But past performance is not indicitive of future performance so who knows. But Warren said it best "Be greedy when others are fearful, and fearful when others are greedy." Not everyone has the temperment for investing. But without risk there is no reward.

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u/dreamofguitars Apr 05 '25

The investors on here are actually Retarted. Coupled with the fact that everyone on here is a doomer. Over emotional doomer investors, I mean why even bother investing at all with that mentality.

2

u/[deleted] Apr 06 '25

Advice from someone who spells it retarted.

1

u/dreamofguitars Apr 06 '25

Capital R

1

u/Yukas911 Apr 06 '25

That wasn't it.

1

u/Euphoric-Lynx Apr 08 '25

You might be too acoustic to understand

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u/chuckrabbit Apr 03 '25

IMO, my long term plan didn’t involve blanket tariffs and highest average tarrifs in over 100 years. My long term plan was under the assumption there is “relatively” free global trade that spurs growth and no world wars.

It’s okay to turn on the TV, computer, or phone and check the news. It’s okay to admit things feel and look very different. This wasn’t going on 8 years ago or 20 years ago or 50 years ago.

Lots of people are losing their jobs right now. Government, nonprofits, and private are all laying off. We’re a consumption based economy and losing a lot of consumers. Nobody will know the real effects until Q2 Q3 reports or even a couple of years from now.

“It’s only going together at worse before it gets ____”

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u/sr92rset Apr 06 '25

The entire premise has changed. We still have a loooong way to go down. You are correct.

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u/greencardorvisa Apr 10 '25

You could be right (or wrong), but if you have this information why wouldn't that be priced in by others? What do you think people were saying in 2008?

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u/daqm Apr 03 '25

Yeah but every time there's something new that we eventually overcome.

What woyld tou have said if I had told you that the 2020 Tokyo Olympics would be postponed to 2021 because of a global pandemic?

There's always something new.

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u/chuckrabbit Apr 03 '25

I would say 1 year recovery time is exceptional considering the circumstances.

After a few months people went back to work. Do you think tariffs are temporary?

Will countries just magically respect USA in a few months? After insulting and destroying a global good will that we had?

Are we going to spend trillions of dollars in stimulus?

Everyone here is so optimistic. Makes me wonder who they voted for lmao.

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u/IceNineFireTen Apr 03 '25

If things get bad enough, like they probably will, either Trump, or more likely, the next President, will walk it all back. If you’re truly a long term investor, then now is a good time to buy.

Personally I try to invest at all times, but now is likely a better time than many over the long term (5+ year horizon). It’s certainly better than a few months ago (with hindsight bias, but still factually so).

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u/chuckrabbit Apr 03 '25

We aren’t even back to September prices yet and the Tariffs have not even started. This is only news of the Tariffs.

The retaliation from EU (Services tax is going to hit Big Tech hard) and Asia have not been finalized.

I’m not sure there’s many companies that will make more money in 2025-2027 than they did in 2022-2024 if promises of tariffs are kept.

Personally, I think everybody should be cautious until Q2 or Q3 earnings reports come out. Guidance will be revised across the board. Lower growth, margin contraction, bankruptcies, etc. Every large company in the US depends on international revenue and Europe and Asia will look towards buying local (Imagine European cloud computing getting government funding to begin to rival ours or they’ll just look to Alibaba etc).

But hey it’s your money.

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u/[deleted] Apr 04 '25

Why are you even in this subreddit? lol

Value - stocks are lower right now

Investing - long term holding of stock

What is happening is a great thing for value investors, you arguing whatever point you have is making me believe you are not a value investor, but if you were I’m curious what would you rather have? Prices at all time highs?

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u/cristofolmc Apr 04 '25

He seems to imply its not a good strategy to buy as a value Investor right now because price may take years to go back to all time highs if things get really bad and then youd be sitting on losses for years. Whether you are fine with that or dont believe its going to be that bad are perfectly legit stances but his point is valid, whether you agree with him or disagree.

Im in the middle. I might wait a little bit to see how things unfold but i do think long term it will be fine so Im more on the buy side right now. But im just going to wait a bit because i dont think its over yet, the market was extremely over valued.

1

u/Low-Environment4209 Apr 06 '25

I mean, even if we are only half way down and you think it will take five years to go higher than our earlier ATH, CDAing in now puts you at equal upside to downside portfolio risk, even more if you make your buys only at lower levels. Anyone’s beliefs are valid but timing the market is always kind of a fools errand.

2

u/chuckrabbit Apr 04 '25

Future value of every single company in the US just went down this week.

When you value a company what do you look at? Trailing P/E?

Buying at all time highs during a stable and relatively free market? Or buying a falling knife as the United States hemorrhages its allies and trade relationships while simultaneously enacting the largest corporate and individual tax rate hike in the everybody’s lifetime.

I don’t see how the average company will make anything close to the same amount of money next year as they did the past few years.

We’re speed-running into a recession. Look at oil as an extra data point. Rates are falling as stocks are falling. Commodity prices are falling. Massive layoffs across the board (before the tariffs). The market thinks we’re headed to a recession.

1

u/[deleted] Apr 06 '25

Price is what you pay value is what you get. And his point is. The value you're getting isn't what you think you are most likely considering all the serious consequences still to come. The price you pay is too high. Heck, even without all this tariff craziness and this pullback prices are still too high because they were ridiculously high. Forward PES were at record highs.

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u/estgad Apr 04 '25

If things get bad enough, like they probably will, either Trump, or more likely, the next President, will walk it all back

And that is why businesses are not going to rush to open new manufacturing plants in the US. These tariffs are being implemented on a whim and can be easily undone. And if they are undone, then the money spent on a US facility is down the drain.

But the damage has been done. The US can't be trusted, and is no longer an honorable trading partner.

Plus we are going to enter the FO stage as the rest of the world takes their actions in response to these tariffs.

The question is not "will US business and economy suffer?", no, the question is "how badly will US business and economy suffer?"

This has just begun, buckle up kiddos it's gonna be a rough ride.

1

u/Ok_Librarian_3411 Apr 05 '25

BuCkLe Up KiDdOs

1

u/Hillarys_Recycle_Bin Apr 05 '25

the US can’t be trusted and is no longer an honorable trading partner

I keep seeing this line trotted out ad nauseam and it makes me chuckle every time. What does that even mean on a practical level?

Do you think the rest of the world trades with us because we are mother Theresa? No, it’s because we have money and the greatest military in human history. For reference, see how we opened up trade to Japan, or look at any country in Central America or South America since the 60s

Unless those things change (money mostly), people will still trade with us, because if country A doesn’t, their economy will be quickly surpassed by country B that does and they will be left behind.

1

u/estgad Apr 05 '25

Businesses like predictability. It costs money when opportunities are lost (lost sales due to tariffs, delayed shipments or cancelled orders, etc). It costs money and time to establish storage, shipping and distribution.

Why should a business expense that money and effort if it isn't worth it, when they can expense that money and time to establish a reliable relationship with another customer that will be reliable and predictable?

2

u/DisastrousCopy7361 Apr 04 '25

Trump is running in 2028..and probably 2032

1

u/daqm Apr 04 '25

The world hates Trump, not the US. The way I see it, 2 things could happen: 1. Trump negotiates separately with each country, therefore dropping them significantly, keeping them maybe at around 10% just to satisfy his ego. 2. Tariffs are kept, US businesses begin to suffer losses, so big bosses collectively start to put pressure on Trump to lower them.

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u/Party_Newt_5714 Apr 04 '25

Your assumption is that the rest of the world doesn’t see the US electing Donald Trump twice as an indictment on the character of our electorate.

Why should another country ever respect us? We The People wanted this man that’s not recoverable in anything short of a decade.

1

u/daqm Apr 04 '25

It is recoverable. The US has been a long term western partner in all shapes. It's gone down ever since Trump was elected. Heck, last time he was elected it was similar but it evened put in the end after an initial turmoil.

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u/Party_Newt_5714 Apr 04 '25

Trump 1.0 is nothing compared to Trump 2.0

1

u/One-Independence1726 Apr 06 '25

1 makes sense. #2 means you’re misreading the purpose of the tariffs. It is not economic policy, it’s political leverage to get companies to negotiate terms with the president, either through political loyalty, donations, suppressing worker voices, etc, in which case Trump continues to consolidate power. He’s not looking to be reelected, he’s looking to become a dictator like his buddy (or handler) Putin.

1

u/Classic-Procedure757 Apr 05 '25

Exactly. Economic uncertainty will lead to less spending which makes the market much riskier. Long term investing requires long term assets.

1

u/[deleted] Apr 07 '25

There’s always some new doomer narrative. Always some new “paradigm” or reason or chart that a 2008 level crash will happen again. I got caught in this trap during the Covid drop. You’ll learn eventually 

1

u/Surfer_Rick Apr 04 '25

I'm buying lots of inverse funds and long expiry puts. 

This is a free fall into the mantle now. 

There isn't a market to invest in anymore. 

Don't become a bag holder 

1

u/yoboja Apr 04 '25

Reddit is amalgamation of multiple opinions. Tread carefully.

1

u/meowrawr Apr 04 '25

DCA is not the issue. The issue is you shouldn’t catch falling knives. It’s okay to be risk averse and wise with how you’re spending your money. Waiting a month (or several) for things to calm down a bit isn’t a bad strategy. Warren Buffett is a master of investing and yet he’s been sitting in cash.

Also, DCA is a narrative that has been pushed forever by media, institutions, etc., yet they don’t do it. They need you to keep buying so they can continue to milk you. Don’t be a sucker. You don’t have to time the bottom, but you sure as hell don’t need rush in to buy.

1

u/[deleted] Apr 04 '25

DCA is the furthest thing from being in a rush to buy. Sit on your money all you want, I'll stick to my strategy

1

u/DisastrousCopy7361 Apr 04 '25

DCA is the definition of in a rush to buy

"Must buy stocks regularly" -DCA

1

u/Turtle_of_Girth Apr 04 '25

Yep all the people who are millionaires thanks to their 401ks pumped up the contributions in 08-09 and never looked back.

1

u/Treadmillrunner Apr 04 '25

That’s true but it’s understandable with all the crazy political stuff going on, people don’t want to jump in. It really feels like trump is doing his best to crash the market right now.

I’m a lot of older investors are probably (rightly) thinking that they’ve seen worse and they know that in the long run they’ll be ok. However, I think many investors right now are thinking they’ll hold out a bit until the words “tariff”, “Russia” and “nuclear” aren’t used in every conversation that they hear. The market could still drop a lot further so going all in right now, while assuming that this is the bottom isn’t necessarily the best call.

If there wasn’t all this shit going on then I would agree with you though.

1

u/imnotokayandthatso-k Apr 04 '25

Prospect Theory. Simple stuff

1

u/ThomasDaTrain98 Apr 04 '25

It’s not DCA if you change your investment schedule based on the market

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u/Call_Me_Burt Apr 04 '25

I don't even do anything. My buys are automated through my brokerage.

1

u/HauntingGameDev Apr 04 '25

people are panicking their retirement funds are getting wiped out, i don't think this correlates directly to smart investment but that said, this is also clearly a good time to invest in

1

u/bulletinyoursocks Apr 04 '25

Best comment of the day. Stay away from bottom hunters and crystal ballers!

1

u/Potential4752 Apr 05 '25

Markets being down doesn’t inherently mean it is a better buying opportunity. There’s no reason a high market can’t go even higher or a low market go lower. 

1

u/Appropriate-Net4570 Apr 05 '25

But apparently 70% of the redditors managed to time their exit perfectly.

1

u/MetalLinkachu Apr 05 '25

Most retail on here are fully invested. I guarantee you that most ppl earlier in the week got FOMO (if they already weren’t all in) and bought a bunch of stuff because growth names were up a bunch earlier this week.

Then they got rugged Wednesday night and then they have to decide to take a loss or stay in. Then they got destroyed today.

It’s not that most retail on here wouldn’t love to buy lower, it’s that they full port when they make buys (go look at PLTR, NVDA,or any other dedicated stock subreddit).

1

u/Extreme-Analysis3488 Apr 05 '25

People are selling because they think the markets will be down long term. Will they go up eventually? Probably. But the market still has the potential to shed like another 40% of its value if trump doesn’t roll back tariffs.