I don’t think anyone expected a quiet start to the new year, but I’m not sure anyone could have predicted the flurry of shocking news stories that have flooded our devices and timelines thus far in 2025. Between the new Trump administration’s wave of executive orders, including the rollout of the Department of Government Efficiency (DOGE), California fires, airplane crashes, the ban (and return) of TikTok, the emergence of trade wars, a Gaza ceasefire, and Crypto mania, it’s been difficult to keep track of all the goings on all over the globe. In a world of existing information overload, 2025 has sprinted out of the gates and continued to add to our infobesity and information anxiety. Instead of DeepSeek, we need deep breaths!
Today, there is a growing landscape where some want to make big, short-term bets, (see the popularity of political (and Super Bowl!) prop betting and “Trump Tracking” websites), but we think it’s best to stay patient, long-term focused, and rational. While it’s easy to become reactionary amid our news consumption, we will continue to take a more patient “wait and see” approach, similar to the one that Fed Chair Jerome Powell described last week when detailing the Fed’s current stance. It is important to understand how some of President Trump’s new policies will be articulated and enforced and what their implications are for our monetary policy and broader economy before making major portfolio adjustments. Nobody has a crystal ball! Until then, it’s best to stay within our process of owning quality businesses that are resilient over time.
A ”wait and see” approach, however, does not mean that as investors we remain inactive. We continue to search for opportunity in the midst of unpredictability and market volatility. One example of this is steel. You may have seen recent Nucor buys last week in your portfolios. As Trump looks to protect American steel and increase its pricing power with his 25% tariff policy announced Monday, which should affect China, Canada, and Mexico (and the American auto industry) the most, we feel that American companies like Nucor could benefit. Nucor, the market leader in steel manufacturing and recycling, and importantly the lowest cost producer, may receive a boost, at least in the near term, from increased onshore manufacturing coupled with a decrease in import competition. Still, there are risks worth considering: What if President Trump rescinds the tariffs tomorrow? What if tariffs in the long run lower economic growth and the demand for steel? Does a market pullback and a lowering of tide lower all boats as well? Like I said earlier, nobody has a crystal ball! It will be interesting to see how this plays out. As always, we will keep trying to learn and evolve.
