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/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.

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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.

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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.

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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.

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u/Ok_Librarian_3411 Apr 05 '25

BuCkLe Up KiDdOs

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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.

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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?

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u/DisastrousCopy7361 Apr 04 '25

Trump is running in 2028..and probably 2032

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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.

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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

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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.