Trump: You’re gonna feel ‘pain’

Dear Reader,

What’s been on my mind since the weekend has been tariffs

Look, let’s not kid ourselves…

As Trump himself said, there’s going to be some pain.

And you know what? It’s nice to hear someone level with the American people.

We are investors, so we have to understand how this is going to impact our investments.

And to think about how this is going to work as investors, think about how it works as consumers.

Trump slapped 25% tariffs on Mexico (delayed a month) and Canada, and 10% tariffs on China.

All these countries sell us a lot of goods.

So, to understand why the market is not going to take this well, think about what’s going to happen here…

Take, for example, cherry tomatoes, which come from Canada (and which I snack on every day) – they’re going to go up 25% in price.

China sells us Tonka trucks for our kids – they’re going to go up 10%.

Maple syrup from Canada will be 25% more expensive.

Tequila is from Mexico – if/when these tariffs hit, it’ll go up 25%. Avocados, guacamole, will also be 25% more expensive.

Smartphones come from China – they’ll be priced 10% higher.

The biggest hit is going to be cars.

Most of them are manufactured in Mexico because of the NAFTA deal Clinton put into place and Trump renegotiated in his first term (so he’s actually attacking his own deal).

Think about a 25% tariff on cars…

If the average car in America costs $35,000, post-tariffs it’s going to cost $42,000 …

From one day to the next you could see car prices jump $7,000.

So this is obviously inflationary. Which is why the Fed was smart not to lower rates.

The other thing you have to think about is, what does that do to the stock market?

Well, if the price of cars goes up, what happens to profits at General Motors and all these other companies?

They go down.

This is why the market sold off. Profits go down.

What happens to smartphones? Apple? It goes down.

And if you’re Samsung – you know, South Korea hasn’t gotten tariffs – they’re going to say, gosh, now is a good time to crush the competition.

This is bad for the market, obviously.

Consumer spending will take a hit.

The monthly payment on a $42,000 car is a lot higher than on a $35,000 car. You might see car payments jump from $500 a month to $650. That $150 you’d spend taking the family out to bowling, etc., you don’t have to spend in the economy now.

And of course, these tariffs and the resulting consumer spending slowdown are coming at a time when the market is the most overvalued it’s been since the dot-com bubble.

So we see a lot of reasons to be cautious.

But look, we’re all big boys and girls here – we have to play the ball where it is, not where we want it to be.

So as we enter a more treacherous part of the swamp…

You know we’re like a little group on Lord of the Rings on a big adventure…

We were in the mountains and hills and now our little band of Behind the Markets brothers and sisters are going to enter a swamp…

It’s going to be a bit more treacherous.

We have to watch our step so we don’t slip into the swamp.

But you know, we’ve been in situations like this before.

Preparing for and playing dips is what we do best.

We recommended Palantir (SYM: PLTR) around $7 a share in the fall of 2022 when everything was down and sold for gains over 400% in 2024.

We recommended Square (SYM:SQ) into the 2020 Covid panic and sold four months later for a 73% gain.

One thing I’ll leave you with is this: when Trump first came to office in 2017, nobody knew how to deal with this, it was such a break from the past.

But now, other countries are actually banding together and pushing back on the U.S.

So it’s going to be interesting game theory here how other countries respond and if they start to form independent trading blocs, which makes what Trump is doing a high-risk gambit.

But we will see where this ends. Nobody knows the future. All we can do is take it as it comes.

We live in interesting times.

I’ve been through a lot in my 33 years as a professional investor and I feel good about our strategy – pulling in our sails – making high-conviction investments while playing it safe.

One area I’m super bullish on under Trump is defense.

In Breakthrough Wealth our defense stocks have knocked out like 9 triple-digit wins in 12 months.

I just put out a new recommendation, “Our #1 Micro-Cap for February.”

Palantir just added another million shares, bringing their total ownership in this company close to 20%.

Go here now to learn how we do things at Breakthrough Wealth and get “Our #1 Micro-Cap for February.”

“The Buck Stops Here,”

P.S. I eventually plan to take this free report down, so do yourself a favor and check it out now…

FREE: “Our #1 Micro-Cap for February”

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