Time for shopping
Trump’s tariff tornado hit global markets; Sensex slumps 930 points, Nifty closes at 22,900 - the S&P 500 has lost $5 trillion in just two days as investors digest the tariff shock.
The social media is filled with fear, doom, and gloom. But, if you’re a rational investor who loves lower prices, you’re in luck.
As the old saying goes, “In bear markets, stocks return to their rightful owners.”
When the market goes on sale like it is now, I simply pull out my watchlist and start shopping. And I’m ready to start welcoming new members into my portfolio.
Warren Buffett explains this counterintuitive truth perfectly:
If you are going to be a net buyer of stocks in the future, either directly with your own money or indirectly (through your ownership of a company that is repurchasing shares), you are hurt when stocks rise. You benefit when stocks swoon. Emotions, however, too often complicate the matter: Most people, including those who will be net buyers in the future, take comfort in seeing stock prices advance
All this volatility today, it is impossible to fully explain it, until its experienced. You can use all the right words, but until you’ve lived through your portfolio dropping 30% in a month, you don’t truly understand it.
For new investors especially, I recommend starting with small positions and observing how you react when markets move in both directions. Because if you don’t learn about yourself first, the stock market is an expensive place to find out. And trust me — you don’t want that tuition fee to be too expensive.
Two reasons I’m excited about this volatility are -
- First, the companies I own with strong balance sheets will aggressively buy back their shares at these lower prices—increasing my ownership percentage without me lifting a finger.
- Second, I now have the opportunity to scoop up shares of wonderful businesses I’ve been analyzing for months, but were previously too expensive to justify buying.
It’s fascinating how when the market keeps climbing, everybody wants a piece of the action. But the moment it starts declining, suddenly nobody wants anything to do with it.
This behavior is truly perplexing because we don’t apply this thinking to anything else we purchase.
Bull markets make everyone brave, but during these time, I do the unsexy work—researching companies thoroughly, understanding their business models, competitive advantages, and most importantly, what price would make them compelling buys.
And right now, attractive opportunities have started to resurface again. “This Time” Is Never Different. Some will say that tariffs of this magnitude are unprecedented. But so was the pandemic. And the subprime crisis. And the dotcom crash. Each crisis came with its own unique wildcards that sent markets tumbling.
During a drawdown, peace of mind armed with a ready watchlist of quality companies is the best advantage any investor can have. The seeds we sow today—during times of uncertainty—will define the quality of life and wealth we enjoy many years down the road.
Are you preparing to run for shelter? Or are you getting ready to plant seeds while others are fearful?
Invest wisely!