The call felt both bold and late. The S&P500 was already 5% off the late March lows. The war in Iraq showed no signs of slowing down. The S&P was still below its 200 day rally, a classic "retest of a breakdown", suggesting another plunge was neigh.
Two days later, on April 8th, the index rose more than 100 points. The biggest gain since the extraordinary 9.7% gains of April 9th, 2025. The move was led by anything directly linked to crude but, as is usually the case with such huge days, buying a basket of "almost anything" worked just fine.
Here's RealReal, Amazon, the S&P500 and Target since April 6th. I picked them based on being just the first 4 stocks that happened to pop to mind as I write this:
The funny thing about all this... meaning "funny in a deeply frustrating way for most people" is the only stock of the 4 having a strong year overall is Target, at 32%. As it stands now, after all the noise and stress and literal shots fired, stocks are generally having a "fine" year, in the hardest possible way:
If you'd taken the whole year off and simply ignored the last 4 months this would look like a pretty typical, maybe even pretty good year.
You could have traded it and made a fortune, particularly if you had access to certain government announcements ahead of time (a topic for a whole different column). But that's yesterday's news. There's only one question that really matters: What should you do now?
Continue to Bet on America
It's a cliche'. It's also absolutely not a political statement. Just a fact-based strategy. For the last hundred years, give or take, putting patient money to work precisely when it seemed least likely markets could rally has been the best-possible investment strategy. It's a long term play. I'm more worried me and my wife than I am for my kids, simply because we have less time to compound our gains. For my kids, who are young and have glorious compounding on their sides, the lesson is always buy dips.
Capitalism works. The Constitution works. Everything else is noise.
Control your Emotions
If you barfed up stocks at the bottom you'll be fine. Consider it a lesson. The first thing I tell stressed investors during down drafts is "sell until you can sleep". If you're tired, overwhelmed or relying on an event outside of your control to save you from a margin call you're betting on hope. Hope is not a strategy.
You Don't Need to Catch the Bottom
On March 6, 2009 you could buy the S&P500 at 666. It was a 50% decline from the October 2007 peak and one of the great "exquisite moments" in investing history. But it wasn't neccessary to be that cute. People who waited a month were still fine. If you waited a year the S&P cost twice as much but you'd still be sitting on 14% annualized returns compared to 18% if you'd nailed the March 6, 2009 lows.
Calling bottoms is a suckers play for people on TV. You have a longer time frame.
I'll take the final point directly from the April 6th letter:
Time to Buy, Carefully
I’m putting money to work now. Slowly, carefully, selectively. We haven’t seen anywhere near the carnage of 2008 but there’s been more than enough pain in New Era Consumer Blue Chips to start adding. Even in a worst-case, lingering nightmare war scenario where gas prices keep elevating and profits are crimped, there will be stocks that outperform cash. Anything better than Worst Case will trigger a rush into most sold-off stocks. That’s where I’m focusing my energy, and Porfolio investments, now.
If you haven’t signed up already the time to do so is now, before we’re chasing these names higher.
