The current market downturn appears to be driven more by policy uncertainty than by a breakdown in the fundamentals of the high-quality companies we invest in. But when markets face rapid, sharp declines—like the one we’re currently witnessing—margin calls and forced liquidations from leveraged accounts often accelerate the sell-off. This dynamic can lead to panic selling, where even fundamentally strong companies are mispriced. The upside to such market dislocation is that it creates a rare opportunity to acquire high-quality businesses at significant discounts—opportunities that long-term investors should not overlook.

While continued volatility is likely in the near term, it’s important to stay focused on the bigger picture. Our investment horizon spans years, not weeks or months. Though short-term market movements can be unpredictable, the intrinsic value of well-positioned companies tends to endure—and it’s in that long-term resilience where the real opportunity lies.

Interestingly, shortly after markets opened on Monday, reports surfaced suggesting that President Trump was considering a 90-day pause on tariffs. The S&P 500 quickly surged over 400 points in response—only for the White House to later deny any knowledge of such a move. The index then promptly gave back about 300 points of that rally.

This dramatic reversal highlights how eager both institutional and retail investors are to rotate back into risk assets. There’s a clear sense that plenty of sidelined capital is waiting for the right moment to re-enter the market—likely at the first real sign of a bottom. No one wants to miss out if a trade deal materializes, which is why a sharp rebound could unfold just as quickly as the sell-off did.

As we’ve been pointing out in our recent social posts, the latest wave of selling has largely been self-inflicted—driven by the unpredictable actions of a single individual. And now, markets are reacting to every word Trump utters, despite his well-documented tendency to reverse course.

Later that same day, Trump escalated tensions by threatening a new 50% tariff on China unless it rolled back its existing 34% tariff by April 8. That would bring the total U.S. tariff burden on Chinese imports to a staggering 104%.

In theory, such a move should have sent markets reeling. Yet, the S&P 500 still closed more than 200 points above the session’s low. Even China’s markets opened Tuesday with strength, and by Wednesday morning, Chinese stocks had pared most of their losses despite opening sharply lower—the day the 104% tariff was set to take effect.

So what does all this tell us?

If the trade war is clearly intensifying, why have markets been so resilient—or even bounced—on days when sentiment should be at its worst?

Of course, we could be wrong. But in our experience, when bad news keeps coming yet the market stops reacting negatively—or even starts to rally—it’s often a strong sign that the bottom may already be in… or at the very least, that we’re getting close.

That said, we should be prepared for big moves in either direction. Volatility is likely to remain elevated, but within that chaos lies opportunity for those who stay focused on the long game.