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The month that was:
April was one of the wildest months in the history of the stock market. On April 2nd, which President Trump called "Liberation Day," he announced large tariffs on almost every country in the world, much higher than investors expected. Over the next two days, the S&P 500 fell about 10%, and about $6.6 trillion in stock value disappeared. It was the market's worst two days since the start of the Covid pandemic in 2020. China put tariffs on American goods in return, and the U.S. raised its tariffs on China again, eventually to 145%. By April 8th, the S&P 500 was almost 19% below its high in February, close to a bear market.
Then, on April 9th, President Trump paused most of the new tariffs for 90 days. That day, the S&P 500 jumped 9.5%, its best day since 2008, and the Nasdaq jumped 12%, its second best day ever. After more ups and downs, the market recovered most of its losses by the end of the month. For the whole month, the Nasdaq went up by about 1%, the S&P 500 went down by about 1%, and the Dow went down by about 3%.
April shows something that has happened many times in history: the best days in the stock market often come right after the worst days. When investors are the most scared, prices can fall far below what companies are really worth. Then, when there is even a little bit of good news, prices can jump very quickly. Investors who panic and sell during the worst days often miss the best days. Studies have shown that if you missed just the 10 best days in the stock market over 20 years, your returns would be cut roughly in half.
Of course, no one knows ahead of time when the bottom will be. That is why I don't try to time the market perfectly. Instead, when great companies go on sale during a panic, I try to buy a little at a time.
Buys -
Bought 15 MU at $67.82
Bought 10 MRVL at $56.25
Bought 6 AMD at $88.21
Bought 11 LRCX at $63.53
Bought 5 AMAT at $139.97
Chip stocks were some of the hardest hit during the tariff panic. Micron, Marvell, AMD, Lam Research, and Applied Materials all fell to their lowest prices in more than a year. I sold some of these stocks earlier at much higher prices, and I bought them back at big discounts. AI is still one of the biggest trends in the world, and these companies make the chips and the machines needed to build it.
Bought 3 MSFT at $364.03
Microsoft is one of the highest quality companies in the world, and it rarely goes on sale. I started a new position.
Bought 7 ORCL at $137.71
Oracle makes database software and is quickly growing its cloud business, which rents out computing power for AI. I started a new position.
Bought 14 NKE at $57.79
Nike makes most of its shoes in Vietnam, China, and Indonesia, which all got high tariffs, and the stock fell to its lowest price since 2017. I added more shares at a much lower price.
Bought 5 EFX at $214.39
Bought 2 FDS at $414.61
Bought 3 IT at $390.85
Bought 5 IBKR at $154.15
Equifax, FactSet, Gartner, and Interactive Brokers are all businesses that sell services and information, not physical products, so tariffs should not affect them much. I added more shares at lower prices.
Bought 5 IESC at $163.81
Bought 3 MLI at $68.49
Last month I sold IES Holdings for a loss, and this month I bought it back at an even lower price. I also added to Mueller Industries.
Bought 7 DLTR at $73.31
Dollar Tree is a discount store, like Dollar General. When people are worried about money, they often shop more at discount stores. I started a new position.
Bought 2 BAH at $111.75
Bought 5 CDW at $158.72
Booz Allen Hamilton does consulting for the government, and CDW sells computers and technology to businesses and schools. I started small positions in both.
Sells -
Sold 10 SWK at $59.67
SWK makes a lot of its tools in China and Mexico, so the tariffs hit it very hard, and the stock fell to its lowest price in more than 10 years. I sold the shares I bought in January for a loss of about 34%. This was one of my worst trades ever. Even a company with more than 50 years of dividend increases can be hurt badly by something outside its control.
Sold 25 PFE at $23.11
I sold the rest of my Pfizer shares for a loss of about 13%. I am done with Pfizer for now.
Sold 18 SBUX at $84.00
Sold 6 MGRC at $105.18
Sold 2 ALSN at $92.24
Sold 1 NVO at $62.52
I sold some of my Starbucks shares, which I had owned for a long time, and my McGrath RentCorp shares, which I sold for a small profit. I also sold a few other shares to raise cash for my buys.
Buys and Sells -
Bought 17 DECK at $107.49
Sold 10 DECK at $101.20
Deckers makes most of its Hoka shoes in Vietnam, which got a 46% tariff. I bought shares as the price fell, sold some on April 8th for a loss, and then kept buying after the tariff pause.
Thanks for reading my newsletter!