More Articles | Free Reports | Premium Services As I write this, the S&P 500 is gyrating wildly. It dropped about 1.8% before markets opened this morning. A few short hours later, it was in positive territory again. The Dow faired about the same. The Nasdaq lost nearly 4% pre-market, and had also recovered by lunchtime. Wall Street’s fear gauge – the CBOE Volatility Index (VIX) – surged 24% in pre-marketing trading. Will the day close in the green? Or will it close lower, adding to the 11% losses we saw Thursday and Friday? We’ll see. But one takeaway is clear: Volatility is back. What’s driving that volatility? For starters, the 104% tariff rates scheduled to go into effect on imported Chinese goods starting Wednesday, April 9. This is in retaliation for China’s imposition of 34% tariffs on American goods… which was itself in retaliation for Trump’s 54% tariffs on Chinese goods. What does China counter with? We’ll find out soon enough. There are some glimmers of hope. Elon Musk, who Trump put in charge of the Department of Government Efficiency (DOGE), called for a “zero tariff situation” over the weekend. Today, Ursula von der Leyen, the President of the European Commission, threw out an offer of “zero for zero” tariffs. As believers in the power of free markets, that is absolutely something the Freeport Society would support. But it’s not clear that Trump would take that deal… or at least not yet. He’s made it abundantly clear that this isn’t about tariffs, per se. It’s about trade deficits. Trump wants zero trade deficits. In his own words, a “deficit is a loss.” He wants the trade deficit “solved.” That’s madness, of course. But let’s not speculate on what President Trump will do next. He’s impulsive and unpredictable, and trying to anticipate his next move is impossible. Instead, let’s focus on what we should do about it as investors. | Recommended Link | | | | "Most people won't know what to do when their savings run out... Or when the stocks in their portfolios fall by half," says Wall Street icon Louis Navellier. "It's going to affect everything about our normal way of life: Our money, the value of our homes, our ability to retire." When it makes landfall, its impact will be more violent and more severe than any financial crisis we've ever seen… Click here for details. |  | | A Bug in Search of a Windshield The Mag 7 – Amazon, Apple, Alphabet, Microsoft, Meta, Tesla, and Nvidia – are seven of the most impressive businesses in the history of American capitalism. All are leaders in their respective fields. And while I have some doubts about Tesla’s continued dominance in EVs given massive competition from China’s BYD, the other six are natural monopolies with almost indestructible businesses. They are fantastic companies. But fantastic companies are not always fantastic stocks. Back in February, I warned that the valuations in Nvidia and the rest of the Magnificent 7 were so high that they looked like typos. They were priced for absolute perfection. Furthermore, the trade was crowded and long in the tooth. Who didn’t already own Nvidia? It was already the largest position in virtually every hedge fund, mutual fund, pension plan, and mom and pop portfolio. What would Nvidia have to do to get the last three people in America that don’t already own its shares to buy? And not to pick on Nvidia... The story was similar for the rest of the Magnificent 7 as well. Any market that aggressively priced is the proverbial bug in search of a windshield. That windshield came in the form of Trump’s Liberation Day tariffs. What Now? It’s impossible to model exactly how this plays out. There are just too many moving parts. Even in a best-case scenario, we’re likely looking at higher inflation this year and almost certainly at least a mild recession. In a worst-case scenario, this may very well evolve into a hot war. It was lost in the tariff headlines, but part of China’s response to Trump’s tariff hike was to restrict its export of rare earth minerals. Investing in this environment is hard, but here at the Freeport Society we embrace this chaos. So, I’m not going to tell you to sell everything and hide in a cave. That’s not my style, and I’m not doing that myself. I have a core of “forever” stocks I own and never plan to sell. This market correction hasn’t changed my mind about that, and it shouldn’t change yours. All the same, now’s a good time to review your position sizes. If any of the Mag 7 (or any other growth stock, for that matter) has grown to become a disproportionately large piece of your portfolio, consider trimming it back a little. The best way for a great company to become a lousy stock is to simply own too much of it. Beyond that, my advice here hasn’t changed. You need to own gold. You should always own some gold. It should be a permanent position in every portfolio. But today, given the wild unknowns we face, it makes sense to own more than usual. Also keep a little more cash on hand. The market is flirting with bear market territory, but prices are still far from “cheap.” I can’t tell you for certain that the market is going lower. But it seems unlikely that investors will recover from the biggest shake up to global trade in a century in just six weeks? Having cash on hand puts you in position to go on a shopping spree once the bear mauling is over. Finally, don’t succumb to the panic in the markets. Hold the line. Embrace this chaos. It’s during times like these that we find the best opportunities to mint fortunes. I’ll have more to report throughout the week, so keep reading. To life, liberty, and the pursuit (and preservation!) of wealth, | 
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