Tag: Trump Tariffs

Market Gyrations and Other News

It’s been a truly horrific last couple of weeks on the stock market. It’s taken a big dive then reversed direction just as quickly. It’s impossible to keep up with the tariff policy changes announced by Donald Trump.

Folks are still trying to figure out which companies are going to be affected when the target of the tough regulations appears to be mainly China. A good example of a company that is likely to be affected is 4imprint Group (FOUR). This is a UK FTSE company in which I have a holding. It sells promotional goods mainly in the USA but a major proportion of their products are made in China. Since the start of the year the share price has fallen about 35%. EPS forecasts have not fallen much but there is clearly uncertainty about the future business.

Will the company be able to replace Chinese imports by production in other countries such as the USA, the UK or other low tariff countries? There are plenty that could produce the products at low cost so I think the answer to that question is Yes.

It seems way too soon to me to jump to conclusions about what will happen even if there is some short-term disruption to supply chains.

FCA Consultation. The Financial Conduct Authority (FCA) have published a consultation of changes to the regulation of alternative fund managers (that includes those who manage VCTs for example). I have not had time to  read it yet but you may care to do so – see: https://www.fca.org.uk/publication/call-for-input/call-for-input-future-regulation-alternative-fund-managers.pdf

Nationalising British Steel. It looks like the Government may nationalise British Steel, or otherwise financially bail it out. This is very annoying and even the Reform Party is in favour of this stupidity. Unviable and declining industries should be allowed to go bust as they can never be rescued except at enormous cost – to be paid out of our taxes. A short-term bail-out never cures the problems in the long-term. The Labour Government seems not to have learned from their past experience of backing losing horses.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

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Portfolio Review and What To Do Next

It’s the start of a new tax year today and the stock markets fell sharply on Friday – the FTSE 100 was down 5% while both the S&P 500 and NASDAQ were down 6%. Markets worldwide are crashing in response to the Trump tariff changes. As usual my portfolio is not immune to the falls even if I now have a somewhat defensive portfolio which is paying high dividends. When selling gathers momentum there is nowhere to hide. Panic is gripping the market regardless of the fact that the impact of the tariff changes has yet to become clear. Uncertainty is the name of the game and it will be some months before we see the impact on company financial results. I anticipate that it will be less than the doom mongers are forecasting. It is always remarkable how companies can adapt to negative events.

What should one do in such circumstances? Well I have been through such panics before. My tactic is simply to wait for an opportune moment to pick up some cheap shares. I always have some cash in my portfolio (about 10-15% normally) and that will be deployed when the market appears to have bottomed out – but that might be some weeks or months away. I will resist the temptation to buy more shares in response to minor bounces, and I never gear up my portfolio by borrowing cash in response to anticipated bounces.

I will move cash into our ISAs to maximise my ISA holdings now we are in the new tax year with another £20,000 allowance but there is no great hurry to do that.

The moral is keep calm and carry on.

Roger Lawson (Twitter: https://x.com/RogerWLawson  )

You can obtain notifications of new posts in future by following me on Twitter (now “X”) – see https://x.com/RogerWLawson where new blog posts are usually mentioned.