Resurrection?
The Economy on a Cross of Tariffs
ON MIKE’S MIND
Faith.
I have it.
In people. In our country.
As Spring regreens our world, this Holy Week is a time for many of us to reflect on our faith, regardless of our religion.
I, sad to say, am beginning to question my faith in some specific things, however.
Namely: my faith that in certain parts of our great country, the government and its localized regulatory environment are detrmined to kill small to medium-sized businesses.
This past month has been regulatory hell for a couple of companies that I and other Co/Investor Club members have invested in.
Which means a lot of wasteful legal costs.
Yes, we all need safety - as the collapse of the cliub rootop in the Dominican Republic showed.
But we do need reason and fairness for entrepreneurship to thrive, especially as our taxes pay regulators’ salaries.
The entrepreneurial spirit is the lifeblood of our society.
And when overregulation throttles it, jobs are los, capital is destroyed and citizens have to pack up and leave their homes for opportunities elsewhere.
I know, it sounds like I’m ranting and I am.
I love this country with all my heart but know enough by now (it took me long enough!) to know which parts of it to keep my investment dollars out of!
Two more thoughts about faith of the terrestrial kind.
One - I have learned to put my faith - and investment dollars - into States where they will treated kindly.
Two - I rest firmly in doing right by every person with whom I come into contact. In the end, this matters most, that I will be judged for good and as a faithful servant of my fellow man.
Onwards and upwards.
Happy Easter.
To Our Co/Success,
Mike
THE MARKETS
After a couple of weeks of turbulence, markets appear to be settling in, until the next tariff announcement, that is.
S&P 500: -1.21%, DJI: -2.64%, NASDAQ Composite: -1.46%
As Trump plans a war against Powell and the Fed, markets bet on cuts
The 2-year and 10-year yields both fell 17 basis points to 3.80 and 4.33, respectively
The VIX is finally cooling off, ending the week at 29.65
Stablecoins are becoming an increasingly hot topic in the news and Bitcoin seems to have weathered the tariff storm rather well
BTC: +0.09%, ETH: -1.48%, XRP: -5.50%
WISE WORDS
"Simplicity has a way of improving performance through enabling us to better understand what we are doing. Complexity tends to creep in, but the best systems remain simple at their core."
-Charlie Munger
Microcaps On Our Mind…
We’re putting the final touches on our latest research deep dive, dropping Tuesday, a refreshed report: “Off the Radar, Why Microcaps Still Outperform”.
Be sure to be on the lookout for that.
It’s also Planet MicroCap Showcase week, where 400+ investors and 80+ companies will gather in Las Vegas to spotlight ideas flying under the radar. We’ll be following from afar and watching closely for the kind of names we like to dig into.
Enjoy the rest of your Easter weekend—and stay tuned for Tuesday’s report. No egg hunt required.
The Savvy Investor…
Mexican Tomato Pricing May Lose Competitive Edge
Japanese Insurance Planning Big Move into Equities
Harley Davidson Activist Quits Board & Writes a Strongly Worded Letter
Publisher’s Note: A Cross of Tariffs?
In 1896, William Jennings Bryan delivered his immortal Cross of Gold Speech at the Democratic National Convention. In populist furor, he was defending farmers and laborers suffering deflation caused by the solitary gold standard which he believed unfairly served Eastern bankers and industrialists.
“You shall not crucify mankind upon a cross of gold,” he thundered.
That oratory almost won him the Presidency.
It’s fair to say that much of the world today is wondering why, you might say, Trump seems to be crucifying the American economy on a Cross of Tariffs.
Yes, the United States has lost so much of its robust industrial base. Yes, we have wild trade imbalances. Yes, higher interest rates cost us. And of course, yes, we have a ridiculous debt load, exacerbated by those rates.
But are tariffs the way to solve these challenges?
The American economy, driven by both gargantuan natural resources as well as the entrepreneurial spirit Mike described so lovingly above, is the greatest economic engine the world has ever seen.
But do these on-again, off-again tariff swings serve our economy or is he exporting the center of economic gravity elsewhere.
Reports are coming in from companies across America who suddenly have to write enormous checks to unload their cargo at our ports, who are being forced to massively reduce their inventory, who wonder how they can continue to operate.
According to Fortune, Trump’s economic approval rating has plummeted to 43% - the lowest of any President in his first quarter year - and we are only a couple of months into his administration. The impact of tariffs are barely even beginning to be felt.
If he sticks with them.
Which, honestly, in anyone’s guess.
For us as investors, our eyes are alert and everywhere.
On interest rates. On supply chains. On international markets. On high- growth microcaps that are not yet as tied into the fluctuations of global markets.
And, as always, like our spirit animal, Warren Buffet, we keep our eyes firmly on value, value, value.
It seems an apt metaphor this week - is Trump crucifying large segments of the American public on a Cross of Tariffs?
What is he killing? What might he be giving life to?
Like Mike, I have a deep faith in the goodness, decency, wisdom and ingenuity of the American people.
I worry, as does Ray Dalio, about macro-waves of empire and history.
But I have faith that we will resurrect.
Probably not soon enough to ameliorate the damage caused (and I’m not even going to begin to get into the collapse of international good will toward us).
But I have faith.
- Adam, Publisher.
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