r/investing • u/waitbutwhycc • 2d ago

Most Predictable Drop of All Time

I posted here right after the first crash in February “Don’t buy the dip, this is more 1929 vibes than 2001.” In response I got almost 100 replies telling me not to time the market, before it got removed by mods for being a “question” (it was not).

Literally all Trump is doing is exactly what he promised on the campaign. And virtually every economist knew it would cause a recession. Even after the crash yesterday he doubled down, saying he might add tariffs on semiconductors and pharmaceuticals too. He is simply trying to remove us from global markets, and it’s working!

Buy the dip once people start actually pushing back against Trump - no real reason to buy before that point.

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u/Scaryclouds 2d ago

Agreed… but Trump is so chaotic, that it wouldn’t surprise me if he totally folded on the tariff stuff by end of next week, and by June, because so much of bullshit will have happened from his administration, that we (the market) will have all but forgotten about this tariff non-sense. 

Not trying to say it will happen, or even likely to happen, just that’s the particular issue Trump represents. Whereas any other administration would go a deliberative process, have a clear and understandable goal, and put out trial balloons to get a sense as to how others would react… Trump just springs massive tariffs on the entire world with little warning and unclear goals in mind. And they could go away just as quickly as they were implemented because some countries “made concessions” or Trump received so much domestic blowback he folded.

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u/HystericalSail 2d ago

The rest of the world will not forget about the tariff nonsense. This was the kick in the ass the rest of the world needed to make contingency plans, to work toward reducing their reliance on the U.S. for everything.

Executing on these plans will have costs, which will be reflected in guidance and earnings.

You can't un-burn your house. And we are definitely, very much on fire right now.

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u/krakenheimen 2d ago

The rest of the world will not forget about the tariff nonsense

While that may be the emotional reaction. The reason global markets are crashing is because of global codependency on trade with the US. Not because feelings are hurt. Once those barriers are lifted/negotiated wealth will drive all decisions like usual. 

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u/Lucky_Platypus341 2d ago

It's not emotional, it's pragmatic. No matter what happens with the tariffs tomorrow or 6mo from now, the US has proven itself an unreliable ally, both economically and geopolitically.

On the small scale, foreign consumers who have changed from US to other sourced products aren't going to switch back easily. That may be emotional/patriotic on their part, but people are stubborn. Unlike the US, most trading partners are required to show country of origin, and bitter resentment lasts a lifetime.

On the corporate scale, companies will change supply lines to minimize the potential impact on US irrational policies. If and when saner heads resume power, they would need a significant motivation to change back. Yes, this is the level most likely to kiss ass to make a short term buck, but most other countries have a lot more pull with their corps.

On a government scale, never before have allies been so vocal in their concerns about security risks with buying weapon systems from the US. They have no trust (or reason to trust) that the plans and vulnerabilities have already been shared with their enemies. That right there makes ALL of our current high priced systems and planes worthless! They have no trust that the US will not leverage software updates and parts. They do not trust that the US doesn't have a kill switch built in to the code if they do something we don't like. They are working on switching to EU designed and built weapon systems. It will take time, but I doubt they're ever going to rely on the US at the level they have before. Long term, that's a $118billion revenue generating weapons industry lost.

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u/Good-Bee5197 2d ago

Trump: "You guys need to spend more on your defense!!"

Europe: "OK, we'll do that, thanks for providing the political will to invest in our domestic capacity!"

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u/R0gu3tr4d3r 2d ago

Exactly this

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u/Dalewyn 1d ago

On the corporate scale, companies will change supply lines to minimize the potential impact on US irrational policies. If and when saner heads resume power, they would need a significant motivation to change back. Yes, this is the level most likely to kiss ass to make a short term buck, but most other countries have a lot more pull with their corps.

Even at the small business scale, rewriting supply chains involves working with new/different people, writing up and signing new documents and legalese, the whole nine yards. It's all hassle that companies both big and small do not want to go through unless the payout is substantial. "Nevermind, we're just kidding. Let's go back!" isn't substantial enough to rework the reworked supply chains again.

Long term, that's a $118billion revenue generating weapons industry lost.

I am absolutely ecstatic that we killed off the multibillion dollar blood money industry. I actually wasn't expecting this to happen, but Trump did it and I am pleasantly surprised for it.

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u/krakenheimen 2d ago

I do think there will be residual animus and that may effect policy. 

But choosing your customers based on grudges is a luxury. There’s no economy on earth that can supplant the US market. 

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u/swagfarts12 2d ago

Given that we are actively encouraging other markets like the EU to invest in China instead of the US, this isn't the case in the long term. You are correct in the short term of under a decade, but incorrect in the long term over multiple decades.