What Investors Need to Know About Today's Market

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Elon Dreams, Mode Mobile Delivers

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Introduction

The past few weeks have been a rollercoaster.

US companies have started reporting earnings — but guess what?
Most CEOs are admitting they don’t fully know the long-term impact of Trump’s tariffs.

Here’s what we do know so far:

• Most goods entering the US now face at least a 10% tariff.

• Tariffs typically lead to higher costs for businesses, which in turn result in higher prices for consumers, weaker consumer spending, lower retail sales, and eventually, potential layo

• JP Morgan now pegs the chances of a US recession at 60% for 2025.

The Smart Investor's Framework - Understand What’s Really Happening

You might be asking: Are US stocks cheap yet?

Here’s the real story:

• Most of the market’s drop isn’t because companies are collapsing

• It’s mainly driven by fear

Let’s break it down simply:
A company's stock price = Free Cash Flow (FCF) per share × Price-to-FCF (P/FCF) multiple

• If FCF per share falls → It means the business itself is weakening.

• If the P/FCF multiple falls → It reflects growing fear and market pessimism, not necessarily weaker fundamentals.

So, what’s happening right now?

• Most companies haven’t even reported their full Q1 2025 earnings yet.

• Trump’s "Liberation Day" tariffs were only announced on 2 April 2025, after the quarter closed.

• Trailing 2024 financials? Still holding up strong.

Bottom line:
The recent stock price drops are mostly because investors are slashing price-to-FCF multiples — betting on a gloomy future that hasn't actually arrived yet.

What’s really happening in the market?

• Companies aren't crashing

• Fear Is
  

  Quick breakdown:
  Stock Price = Free Cash Flow (FCF) per share × Price-to-FCF (P/FCF) multiple

• Business weakens? → FCF per share drops.

• Fear takes over? → P/FCF multiple shrinks.

  Right now:

• Most companies haven’t even reported full Q1 numbers yet.

• Trump’s "Liberation Day" tariffs were announced after the quarter ended.

• 2024 business results? Still solid.
  

Translation:
This sell-off? It’s not about falling profits — it’s about shrinking confidence.

Markets are pricing in a bad future that hasn’t even happened yet.

Stay sharp.
Opportunities are being created right now.

Real Example: Meta Platforms

Here’s a real-world case study that every smart investor should know:

Between 2020 and 2024, Meta's Free Cash Flow (FCF) per share skyrocketed by 152% — jumping from US$8.20 to US$20.70.

And its stock price? It climbed about 84% during the same period.

What’s the big takeaway?

• Meta’s business grew almost twice as fast as its stock price

• Today, Meta is fundamentally stronger — yet cheaper — than it was four years ago.

  These kinds of mismatches — where the business strength outpaces the stock price — are exactly the opportunities that smart, long-term investors hunt for.

Bottom line:
The market may panic in the short term, but over time, business fundamentals always tell the real story.

Get Smart: Focus on What You Can Control

Here’s the simple truth:

• Tariffs? Wildly unpredictable.

• Market swings? Driven by fear and emotion.

• Business fundamentals? That’s where real opportunity lies.

If you panic and sell today, you could miss out when strong businesses bounce back even stronger.

Even the greatest investors don’t waste time trying to guess the short-term:

At the Smart All Stars Portfolio, we’re embracing this moment of uncertainty:

• Staying anchored to businesses with rock-solid fundamentals.

• Adding investments slowly, carefully, and strategically.

• Using decades of experience to stay calm and smart under pressure.

Remember this:
Short-term fear is fuel for long-term wealth — if you stay sharp, stay patient, and stay invested.

Happy Investing !