The Long Term Investor

And of course....the treasury freak-out. Brother....

On Treasurys’ Post-Tariff Ride
Perspective and scale suggest headlines are overreacting.

https://www.fisherinvestments.com/en-us/insights/market-commentary/on-treasurys-posttariff-ride

(BOLD is my opinion OR what I consider important content)

"US Treasury yields have lurched in both directions since President Donald Trump announced a heftier-than-expected, bizarrely calculated slate of tariffs last week. But it was up moves earlier this week that had headlines asking: Are US Treasurys still a “safe haven” for investors? Many suggest yields should be falling at times like this. But slow down. Today’s rising yields are relatively small in scale and very short term, and a close look at both ends of the yield curve bucks headlines’ claims.

Rising US bond yields (and falling prices, which move inversely) have many folks concerned. Before President Trump’s “Liberation Day” announcement, 30- and 10-year Treasury yields sat around 4.5% and 4.2%, respectively. When the tariffs were unveiled, yields initially fell back, hitting 4.4% and 4.0% in the days thereafter. But they began rising. 30-year rates since rose to 4.9% while the 10-year touched 4.5% before cooling to around 4.3% on Thursday.[ii]

Some tie this to foreign owners of US debt dumping their holdings, and hey, maybe some nations are doing this to an extent to raise capital. But that is speculation and anecdotal at this point. We won’t have exact data until the Treasury releases its next international capital flow report in May. But there are ways to test the claim. If capital were really pouring out of Treasurys to international investors’ home currencies, exchange rates would reflect it. They don’t. Most major currencies, like the euro, show little effect versus the dollar.[iii] The Japanese yen has swung more but is still within its trading range of the last two years.[iv] China’s yuan has barely budged. Japan and China are America’s two largest foreign debtholders.[v] A huge selloff would likely have hit the dollar—not the case. Additionally, Uncle Sam auctioned some 10-year Treasurys Wednesday, and demand from “indirect bidders”—aka foreign investors—spiked. That doesn’t smell like foreign capital flight to us.

Either way, pundits’ biggest question remains: Why are yields up? This is based in conventional knowledge that, in a perceived crisis, investors often seek shelter in US dollar denominated-assets, chiefly government debt (called a flight to quality). America’s bond markets are the world’s deepest and most liquid, so nervy investors generally snap up US debt, lowering Treasury yields. For instance, we saw this during the eurozone debt crisis in the early 2010s and 2022’s regional bank collapses. Even in 2011, when everyone was freaking out over the US’s debt ceiling downgrade and a potential default, the preferred haven asset was US Treasurys.

Hence, if yields are rising now, bears claim, Treasury market fundamentals must be quite bad. But markets are much more complex than this. Yields at the long end of the yield curve are rising, but the short end is darned stable. Shorter-term debt tends to be the prime beneficiary of a flight to quality. Longer maturities tend to depend more on inflation expectations. When people broadly expect inflation to heat up, yields tend to rise—and vice versa. Right now, the vast majority of pundits deem tariffs (wrongly, in our view) inflationary, and the “Liberation Day” announcement rekindled hot inflation fears. This raised expectations for “higher for longer” Fed rates, which you can also see in higher pricing on inflation swaps (derivative contracts where one party swaps fixed-rate payments for floating-rate payments linked to an inflation index).[vi] And this happened against a backdrop of relatively low liquidity, as hedge funds have significant short positions, which prompted some cash-raising. When investors need cash, they tend to reach for the easiest thing to sell: US Treasurys (and stocks).

So that very technical and nerdy (sorry) trip through markets’ plumbing argues against something being abnormally wrong. So does historical context. Folks, look again at the scale of the moves. We are talking about fractions of a percentage point. These aren’t huge, even on the less-traded 30-year. When you look beyond the past few months and the low-rate 2010s, you see yields’ climb thus far isn’t huge historically speaking. Exhibit 1 shows this, charting 30- and 10-year Treasury yields since 2000.

Exhibit 1: Treasury Yields Aren’t Sky High


Source: FactSet, as of 4/10/2025. 30-Year and 10-Year Treasury yield, constant maturity, daily, 12/31/1999 – 4/10/2025.

Relative to history, yields are still benign. Heck, 10-year yields are down since January, flat since stocks’ February high and still well below levels seen in 2023 and late 1990s. Such a small, short-term uptick shouldn’t warrant doom-and-gloom. This strikes us a classic myopic overreaction lacking longer-term context.

That said, some argue the selloff could continue amid the Trump administration’s erratic policy decisions. Several outlets questioned if Trump was having a “Liz Truss moment,” calling back to UK Gilts’ spike after Britain’s then-Prime Minister unveiled a spate of modest tax cuts in autumn 2022. But this is an apples to oranges comparison—bonds sold off then because the country’s over-leveraged pension funds were forced to unload Gilts to raise cash quickly and meet margin calls. That exacerbated what we think would otherwise have been a normal, fleeting sentiment reaction. That was a UK-specific issue tied to a specific pension tactic common there are the time.

Mind you, we can’t—and won’t—predict policy moves. But today’s tariffs and volatility don’t change the fact that US debt is still quite serviceable via tax receipts, which cover debt payments many times over. That doesn’t preclude more short-term volatility as tariff uncertainty continues and Congress debates taxes and the debt ceiling. But overall, we aren’t seeing some underlying crisis here.

Moreover, we wouldn’t sweat rumors of a foreign selloff. As we covered in our March reader mailbag, US debt is overwhelmingly held here. As of January, foreign ownership of US Treasury securities amounted to around $8.5 trillion, or about 23.5%.[vii] Including Belgium, where it reportedly holds many of its Treasurys, China held 3.1% of total US government debt, its share having tumbled in recent years to little effect. The remaining 76.5% is owned by American investors (mutual funds, depository institutions, state and local governments, pension funds, insurance companies and individuals) and the Fed. If China elected to sell, we suspect plenty of buyers would line up to snap up those bonds. So even if a massive foreign selloff occurs (unlikely, considering it would skyrocket the selling country’s currency, which again, isn’t happening, and wreak havoc at home), it would probably be less painful than widely feared.

In our view, fear over bond yield volatility seems overdone. It is small historically and the US isn’t facing a plumbing emergency a la Britain in 2022. To us, this is a classic case of sentiment-fueled swings. Remember to keep perspective and scale when headlines panic."

MY COMMENT

Yes..... the media really went all in on the articles hyping some sort of impending treasury market disaster. BS.

I guess to also go all the way out there.....I dont see any way we are in or near a RECESSION....either. There is a total disconnect between the strong economy and the media perception of us having a bad economy right now.

The economy may be erratic or strange...but it is doing very well as far as I can see around me.

 

The above pretty much sums up my view of the markets right now......and more importantly......3-8 months down the road.

 

It never hurts to review the basics:

8 Charts Every Investor Needs to See When Markets Crash
Here is your bear market survival plan backed by 100 years of data.

https://investorplace.com/smartmoney/2025/04/8-charts-investors-need-when-markets-crash/

(BOLD is my opinion OR what I consider important content)

"Key Takeaways:

• Every major stock market decline in the past 100 years has been followed by new all-time highs.
  
• Innovation and progress have consistently driven long-term market recovery.
  
• Panic selling during a market crash can lead to missed opportunities for gains.
  
• The most successful bear market strategies focus on long-term thinking and investing in innovative companies.
  
• Major crashes like 1987, 2000, and 2008 were followed by significant bull markets.
  

Hello, Reader.

You know that for every one problem in America, there are thousands of brilliant people working on innovative solutions.

These are the types of people who invented the lightbulb… the television… the pacemaker… the airplane… and the iPhone.

They are people who have the brains and worth ethic to create incredible businesses like Starbucks, Facebook, Amazon, Whole Foods, Apple, Nike, and Google.

These companies have provided good jobs to millions of people… they provided goods and services to thankful customers… and they produced hundreds of billions of dollars in wealth for their shareholders. All by creating and innovating.

It’s been that way for centuries… and it will continue to be that way in the future.

Below is a chart of the Dow Jones Industrial Index from post-World War II through 2021.


Incredible, right?

The stock market declines of 1987, 2000, and 2008 – while painful at the time – are just speed bumps on the long-term chart. And the takeaway is clear: Over time, American prosperity rises and the stock market goes up.

With this picture in mind, my advice is to “make the trend your friend” and ignore the naysayers. Don’t panic over a market correction and don’t let the fear-stoking headline of the hour scare you out of your holdings of high-quality innovative companies that are poised to change the world.

During stock market corrections, I ask you to focus on what really matters: progress, transformational industry trends, creating value for others, and innovation.

Remember that despite all the negative occurrences of the past 100 years, shareholders of innovative companies that serve their customers have made fortunes.

It’s been the surest way to get rich in America for more than 100 years. It will be that way for at least 100 more. That’s why staying bullish on human progress and innovation is at the foundation of what we do at InvestorPlace.

It’s also why, when our subscribers write in to ask if we have “bear market survival” plans, we send them this essay.

Our “bear market survival” plan consists of reviewing the facts above, thinking long-term, and looking to buy high-quality stocks at discount prices.

Our “bear market survival” plan does not consist of selling stocks in a panic.

I believe that when an investor can “deprogram” themselves from obsessing over “the market” and interest rates – and instead focus on the things above… the things that history has shown really matter – that investor ascends to a higher level of understanding when it comes to money and investing.

It’s one of the most important milestones on the journey to mastering money.

The Next Time You’re Tempted to Panic, Look at These Eight Charts

Since 1928, there have been 27 bear markets in the benchmark S&P 500 stock index. After each and every one of them, stocks went on to reach all-time highs. The track record here is perfect.

Recent history has eight outstanding examples of why a smart “bear market strategy” consists of keeping the facts in mind, thinking long term, and not getting scared out of stocks.

We like to think these

eight charts are an antidote to a harmful financial disease we call “Short-Term-itis.”
For example, during the famed 1987 “Black Monday” crash, the stock market dropped 33.5% in a single day. It caused a short-term global financial panic.

However, less than two years later, the stock market reached an all-time high.


Then you have the big stock market decline of 1990, which was created by worries over a U.S. recession and the Gulf War. Stocks fell 19.9% during this decline. However, stocks recovered and hit a new all-time high less than a year later.


Then you have the big 1998 market decline. Stocks fell 19.3% over the span of a few months. Stocks quickly recovered and reached a new all-time high by early 1999.


Then you have the 2000-2002 bear market. This crash came after the dot-com boom reached its frenzied peak in March 2000. Although this was one of the worst market downturns in U.S. history, stocks went on to recover and reach new all-time highs in 2007.


Next, you have the stock bear market that accompanied the Great Financial Crisis of 2008. Stocks fell an incredible 56% during the decline. However, stocks went on to recover and entered a historic bull market that lasted a decade. Fortunes were made during the recovery, and the market reached a new all-time high in 2013.


In the midst of the decade-long recovery that followed the 2008 crash, the market saw a decline of about 19% in late 2011. Stocks recovered and reached a new all-time high by early 2012.


In 2018, the market suffered a gut-wrenching decline of 19%. But by the summer of the following year, stocks had recovered and reached another new all-time high.


Then there is the pandemic stock market drop and recovery of 2020. When the world realized Covid-19 was a serious worldwide problem, the market fell 53% in less than two months. However, government stimulus helped the market recover, and stocks reached a new all-time high by the end of the year.


Summing Up

You’ve just gone on a tour of the biggest financial disasters of the past 60 years.

You’ve reviewed the most famous, most horrible bear markets and stock crashes in history… like the Black Monday crash of 1987… the dot-com crash of 2000… and the Great Financial Crisis of 2008.

You’ve also seen the track record here is perfect. Each period of rough times was followed by all-time highs.

These recent recoveries highlight a very long trend…

Every major stock market correction, every crash, every bear market in American history has been followed by new all-time highs.

That’s why we state once again… for emphasis…

During stock market corrections, focus on what really matters: progress, transformational industry trends, creating value for others, and innovation.

Remember that despite all the negative developments of the past 100 years, shareholders of innovative companies that serve their customers have made fortunes.

Remember that it pays to bet on America.

Remember that a wise “bear market survival” plan consists of reviewing the facts above, thinking long-term, and staying long stocks."

MY COMMENT

For me it is all about.....PROBABILITY.

 

THANKS ROAD. Of course I dont expect anyone to agree with all that I say or sometimes much at all. We all live in our little bubble universe composed of our experiences and biases. What works for me in thinking and investing will NOT necessarily work for anyone else.

That is why it is important for every single investor to find what works for them and just do it over, and over, and over, for as long as it works.

IGNORE all the noise......and......ignore what everyone else is doing and thinking. In the end it is all about......"YOU"".....and what works for you. You have to be true to yourself.

 

Having been involved in negotiating over my entire time as a business owner.....I got to be very good at it. It AMAZES me how much people today do not negotiate much at all. I see many younger people that have not idea how or when to negotiate. It amazes me how little people negotiate something big like buying a new car or even a house. I see those house buying shows on TV and often think.....wow....that was a really high first offer....they left a lot of money on the table.

Of course the idea of negotiating often makes people uncomfortable....if they have never done it. My primary business function was negotiation....often involving big money issues. Once in a while I would be a mediator or an arbitrator......but my whole primary business function was negotiation.

I did a few papers on the process and at times did some speaking. At times I testified in our state legislature on various issues that were inherent in some of the "things" that I negotiated.

At my peak....I could negotiate anything.....and I did. It is amazing how much EVERYTHING is negotiable. After a while I got tired of doing it outside work for smaller purchases or services. At that point I just would negotiate big personal things like buying a house or a car or piece of art, etc, etc, etc.

 

As usual......the smart investor is looking for deals.

Investors aggressively buy the dip as Trump's tariff turmoil continues to shake markets

https://finance.yahoo.com/news/inve...oil-continues-to-shake-markets-133641635.html

(BOLD is my opinion OR what I consider important content)

"The fallout from President Trump's tariff announcements and revisions hasn't yet pushed investors to shy away from an old habit: buying the dip.

Data from VandaTrack showed the week following "Liberation Day" saw "record dip-buying flows from retail investors," including $3 billion in net purchases on April 3, the largest daily total since VandaTrack began collecting this data in 2014.

Global markets sold off sharply in the initial reaction to Trump's reciprocal tariff announcements that pushed levies to their highest level in a century. Across trading on April 3 and 4, the S&P 500 (^GSPC) experienced one of its worst two-day stretches in history.

Since this initial crash, markets have remained volatile, with the index seeing its best single-day rally since 2008 last Wednesday, April 9.

"Even prior to Trump's tariff U-turn, retail investors remained well short of capitulating," the VandaTrack team wrote in a note on April 9. "The glass-half-empty interpretation is that if this rally turns out to be a mere bear market bounce, the risk of further downside remains on the cards."

VandaTrack's team added that retail traders not buying the dip is a "hallmark sign of equity market bottoms," but it's not a "necessary condition for an equity trough."

"At the slightest whiff of good news, people come roaring back in because that FOMO [fear of missing out] never goes away," Interactive Brokers chief strategist Steven Sosnick told Yahoo Finance last week.

"It's always there. No one ever wants to miss a rally."

'Risk appetite is still alive'

VandaTrack's data isn't the only indication investors have been aggressive in scooping up stocks during the recent drawdown.

An April 8 note from Bank of America showed the firm's clients were net buyers of $8 billion worth of stock during the week of the initial tariff announcements. This marked the fourth-largest weekly inflow in Bank of America's data going back to 2008.

Data from Deutsche Bank published Monday also showed equity inflows of nearly $50 billion last week — the largest amount seen in 2025 — including $31 billion flowing into US stocks.

Deutsche Bank chief strategist Bankim Chadha told Yahoo Finance the data shows "risk appetite is still alive."

Chadha added that the recent flows might not be an indicator that investors are intentionally buying the dip but rather a continuation of a post-pandemic trend of consumers putting excess savings into stocks.

Still, Chadha said the recent "robust inflows" show those investors haven't taken an overall negative view of the economic outlook amid the tariff turmoil.

Tariff fears thus far have spiked predictions of higher inflation and slower growth, though as seen in last week's inflation reading, the data itself hasn't deteriorated yet.

"If we do get bad inflation growth or labor market data, it's another issue that could potentially draw basically on performance of equity markets," Chadha said.

Market sentiment surveys, however, show money managers growing increasingly cautious as tariff uncertainty persists.

On Tuesday, Bank of America's latest fund manager survey showed a record number of investors intend to cut their allocation to US equities, and expectations for a recession over the next year logged their fourth-highest reading of the past two decades."

MY COMMENT

The last first....it is the professionals the money managers, short traders, and Hedge funds that are in panic. The little investor....powering forward as usual.

You will not see this mentioned much in the media. They....the media....live in the world where it is doom and gloom 24/7.

They are totally focused on the politics and the process of the tariff negotiation that they will not even be able to see or admit the final result in the end.

 

WOW.....not a bad little market so far today. And a good one yesterday as well. Who would have ever guessed.

BUT....as usual it is early in the day.....and.....the day will only firm up after all the opening orders are done and the entire country is awake.

 

The market so far today.....as EARNINGS come in.

S&P 500 ticks higher as investors digest latest earnings and tariff volatility eases

https://www.cnbc.com/2025/04/14/stock-market-today-live-updates.html

(BOLD is my opinion OR what I consider important content)

"U.S. stocks wavered on Tuesday, as investors analyzed the latest batch of first-quarter earnings reports and enjoyed a recent decline in market turmoil.

The Dow Jones Industrial Average rose 55 points, or 0.2%. The S&P 500 added 0.2%, while the Nasdaq Composite
flickered around flat. The three averages are coming off back-to-back winning sessions.

Tuesday’s moves were in stark contrast to the volatile swings seen in recent sessions. The Cboe Volatility Index (VIX) fell below 30 after hitting a high of around 60 last week.

Bank of America added 4% after exceeding analyst expectations for the first quarter. Other major reports due this week include United Airlines and Netflix.

Beyond earnings, Boeing shares fell more than 1% after Bloomberg reported that Beijing ordered Chinese airlines not to take more of the company’s planes.

Stocks received a tailwind into this week after guidance on Friday from U.S. Customs and Border Protection revealed exemptions from “reciprocal” tariffs for electronic products such as smartphones, computers and semiconductors. Still, comments from President Donald Trump and Commerce Secretary Howard Lutnick on Sunday suggested these exemptions might only be temporary.

Despite recent gains, the three major indexes are still clawing back losses seen in the wake of Trump’s original tariff announcement on April 2. The Dow and Nasdaq have each slid more than 3%, while the S&P 500 has dropped more than 4%.

“The worst-case scenario is off the table,” said Larry Tentarelli, founder of the Blue Chip Daily Trend Report. But, “the problem is we could get a headline at any time and the market goes down 3%.”

AND

Bank of America tops analysts’ estimates on better-than-expected interest income, trading

https://www.cnbc.com/2025/04/15/bank-of-america-bac-earnings-q1-2025.html

Citigroup results exceed analysts’ estimates on gains in fixed income and equities trading

https://www.cnbc.com/2025/04/15/citigroup-c-earnings-q1-2025.html

MY COMMENT

Of course companies are going to down-play guidance and the media will jump on that to ignore and nit-pick earnings. In other words....nothing new.

 

Speaking of focus on the "process" of something versus the ACTUAL "end "result".........in investing all the day to day short term noise and volatility is the "process".......the long term shows the actual "result".

Process is usually MESSY. BUT....necessary to endure to get to an end result.

Too many investors get way too caught up in the "process" of it all. This is where the DRAMA is. This is where doom and gloom and fear-mongering live and control the markets and investors. This is where the media and ALL politicians live and thrive.

 

I would say that in my business life I was a....political insider.....on a local and state level...but I was not a lobbyist or involved in politics.. After a while it drove me crazy.....seeing stuff in the news and knowing the real behind the scenes story.

After a while I intentionally separated myself from it by moving to a different city and county and commuting to my business. I intentionally stayed ignorant of local politics in my new city and county.

Having inside information can....DRIVE YOU CRAZY.....if you are not all caught up in it.

 

As to the above I will also say......I was interviewed many times in local and national media when I was in business. CBS Evening News, Time Magazine, Army Times, etc, etc, etc, all the local TV stations, many other national newspapers and magazines.

AND....I can honestly say that NEVER.......NOT ONCE.....was the quote in the article or show....exactly..... what I really said. LOL.

And....that was back in the old days when media was somewhat accurate.....compared to today.

 

Speaking of politics and the political process brings me to one of my favorite stories.

In August of 1993 my kids were 9 and 12 years old and we decided it was the perfect time to take them on a trip to Washington DC to see all the monuments and history. We did all the usual tourist things....Viet Nam Memorial, Smithsonian, Lincoln and Jefferson memorials, all the sites associated with the assassination of Lincoln, etc, etc, etc. We were typical Washington DC tourists.

We were staying in a hotel that was very close to the National Mall....so we were able to walk to all the sights. The weather was beautiful and one evening we decided to walk the National Mall and Capital grounds to see everything all lit up for the evening.

We ended up walking to the capital from the back side of the building. When we got close....just goofing around....I went up and tried one of the doors on the back side and it was open. So....we went in.

We found ourselves on the floor below the main floor of the Capital building. We were walking around the hallways looking at all sorts of hearing rooms and offices.......reading the name tags of the rooms. The place was totally deserted. After we wandered around the bottom floor for a while we decided to go up to the first floor and the main lobby area.....the same area you saw in many January 6 photos.

We went up the stairs and when we got up to the main entry level.......we saw people there in the halls. There was security at the main doors screening and allowing people in.

We saw a group of people in a line being led along by a "guide". We figured....hey good luck....they are doing night tours of the Capital....so we just added ourselves to the back to the line of people and just blended in.......we figured we would "crash" the tour.

The "guide" took our group into a very tiny back hallway with a back staircase and left us there. We started to get nervous that we would be found out. As we waited in that back staircase it become obvious that other people had some sort of ticket.....and it was NOT a tour. I told my wife and kids to wait there and I would go out and see what was going on.

I went back out to the main entry of the Capital and people were still lined up outside waiting to come in. I asked someone....what is going on? Their answer.........tonight is the Senate vote on the historic Bill Clinton Deficit Reduction Act of 1993.

This was a HUGE deal at the time and the center-piece of the Clinton agenda. We were just dumb tourists and had no idea of anything happening in DC while we were there.

I went back to the little back hall and back staircase and told my wife and the kids what was going on. We still had no idea what group we had "crashed" or why we were in the tiny back staircase area. We were getting pretty nervous about being discovered but we just kept waiting along with the group. We figured when we got caught we would just play dumb.....which we were.

A short time later our "guide" came back and took us up the little stairs. At the top we came out and......BOOM.....we were in the lights and glare and massive turmoil of the entry to the Senate Gallery. Security was there screening everyone with metal detectors and other machines and dogs. People were in suits and all dressed up.....we were dressed as tourists.

When we went through the screening machines my wife got stopped. She had some of those plastic eggs in her purse that kids toys come in. I imagine they thought they were some sort of possible bomb.......but.....she showed them they were kids toys and they let us continue.

We just hung in there....went through the screening and were ushered into the Senate Gallery and given seats. All the various Senators were there strutting around the floor of the Senate waiting for the vote. What a bunch of peacocks.

We ended up siting in the Senate Gallery with all the officials, politicians, and Democrat elites for the passage of the historic Clinton Tax Bill.

When it was all over we started to leave the gallery and were just outside the door when I heard someone call my name. I turned around and on the other side of a velvet rope was a member of the House of Representatives that I knew from my state. We talked for a while and I told him how we had accidentally "crashed' the Senate Gallery. He lifted up the velvet rope and got us over to the "Member" side......and told us...."you may have come in the back door but you are going out the front door with me".

We rode down in the private "members only" elevator. He escorted us around the capital a bit and than said good-night since he and his wife had to go to some sort of after-party to celebrate the vote.

So there you go....that is how a couple of....RANDOM..... tourists with two kids were able to be present in the Senate Gallery in August of 1993.....with all the Washington DC Elites....for the historic Clinton tax bill vote. It was actually a pretty cool lesson for our kids in how government works.

 

Averages are looking good.....although....I have not looked at any of my individual stocks so far today.

 

A little late day FADE. Nothing to write home about....especially for me with my NVDA and PLTR dominating my portfolio. So...I ended with a very nice smaller gain today. I also beat the SP500 today by 0.60%.

A good day.