The Mood Swings of Mr. Market

Tariffs in full effect

Reuters reports on the trade war escalation as the Trump Administration rolls out a series of new tariffs across virtually all US trading partners. In the article, Nigel Green, CEO of the global financial advisory deVere Group stated, “The reality is stark: these tariffs will push prices higher on thousands of everyday goods – from phones to food – and that will fuel inflation at a time when it is already uncomfortably persistent.” 

Staying Calm When Mr. Market Is Panicking

As Wall Street continues to price in a potential recession, the overall economic outlook looks bleak. While some may be tempted to pull out of the market entirely, it’s better to think about market downturns as a buying opportunity. Keep in mind that Mr. Market is sometimes irrational, and the evolved investor can leverage the general sense of panic that can grip markets, as buying opportunities at the right time.

There are several things you can consider if the stock market continues to decline, and likely employing all three is ideal:

1) Long-term hold – if you already have a strong position of high-quality stocks whose value thesis is still true, hold the positions and ride through the storm. Have confidence that the investments will rebound in price over time and that selling based on fear will create actual losses vs. losses on paper. 

2) Stockpile cash – execute a play out of the Warren Buffet textbook and begin saving cash aggressively. Think about trimming positions in stocks where you have substantial gains, whose business models may be impacted by a prolonged trade war, or have significant exposure to the Chinese market (e.g., Apple). By savings cash and converting riskier assets to cash, you begin to build up “dry powder” that can be re-deployed.

3) Refine your watchlist – now is the time to review your watchlist of companies with strong economic moats, solid financial performance, and an outlook of continued success over the next five years. Once you have used a DCF model to determine the intrinsic value of those stocks, compare those on your list. You should evaluate those that offer the biggest potential upside compared to a relative risk score.

If you’re like many, looking at your 401K portfolio right now might be painful. Fear not, consider which actions above you need to take and make patient, deliberate moves. Sometimes the best course of action is not to act at all.

Sponsored Post

RPM

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Over the past five years, RPM has grown revenue over 30%, a 5.7% CAGR to $7.3B in revenue while returning gross profit margins to north of 40% over the last four quarters, which was its historical norm pre-2018. In the Q2 2025 investor presentation from January 7th, RPM announced that it had achieved 12 straight quarters of consecutive EBIT growth. Another noteworthy data point from the Q2 report is that the company is overachieving on its 2025 Margin Achievement Plan (MAP). RPM CEO Frank Sullivan noted during the call that “it’s likely that the benefits of MAP ‘25 will reach $500M” which is higher than the original target of $465M.

The stock is down 11.5% in the past 6 months from its 52-week high of $141. The selloff has resulted in RPM having a current dividend yield of 1.8% and a PE ratio of 22.3. This is a stable, slow growth stock that if purchased at a more attractive valuation, could appreciate considerably over time.

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_{Legal Disclaimer: The Evolved Investor is for information purposes only and is, by law, not personal investment advice. Concepts and ideas are for your consideration only. We encourage our readers to do their due diligence. Investing has inherent risk, and investments can lose value.}