It’s rare that I feel compelled to send an update just two days after my last newsletter—something I haven’t done since the early days of the pandemic. But following the steep market declines yesterday and today, along with the conversations we’ve been having with clients, I believe a timely note is warranted.
Markets have experienced a notable pullback following Wednesday’s tariff announcements from President Trump, as investors concerns grow that the proposed measures may have broader economic consequences than initially expected. While this kind of policy-driven volatility is relatively rare, we’ve successfully guided clients through similar periods of uncertainty before. These developments can shift rapidly, and given the chaotic rollout of the policy, a partial or even full reversal could come just as swiftly.
The current pullback is one of the more notable we’ve seen since March 2020, highlighting elevated investor anxiety. And while there’s no shortage of speculation about the political motivations behind these moves such theories offer little comfort amid real-time market stress.
Our core message remains unchanged: discipline matters. We’re actively monitoring developments and assessing both the short- and long-term implications for the businesses we own. That said, it’s still early days. Tariffs can raise costs and disrupt trade, but their ultimate impact on sales and margins is often more nuanced — shaped by supply chain adjustments, exemptions, country-specific negotiations, and pricing strategies. The upcoming earnings season in late April and May will provide greater clarity on how our portfolio companies are navigating these challenges.
We understand that periods like this are uncomfortable. But reacting impulsively, especially without complete information, rarely leads to good outcomes. History continues to show that patience and discipline outperform reactive behavior. We also believe that market pressure and institutional feedback — including from the Federal Reserve — may help guide policy in a more measured direction.
While volatility is never welcome in the moment, it’s a normal part of the investing experience. Our defensive strategies are helping cushion the impact, and we remain confident that, with time, stability will return and the strength and quality of the businesses we own will shine through.
As always, we are watching closely and remain here to talk if you have questions or concerns.
- Jack