# Why did we not see this coming? **URL:** \ **Category:** Uncategorized\ **Created:** [April 28, 2025, 8:29am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171 "2025-04-28T08:29:13Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![PhilMongoose](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/philmongoose/32/12331_2.png) [@PhilMongoose](https://forum.mustachianpost.com/u/PhilMongoose)\ **Post date:** [April 28, 2025, 8:29am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/1 "2025-04-28T08:29:13Z")
The Trump tariffs created a large one-time dip in the market. However, the fact that Trump was going to introduce tariffs on liberation day was known well in advance. His views on tariffs were also well-known and communicated. So how did most of us get caught off-guard? I can only conclude that I was too complacent and too lazy. I thought that it is more Trump noise that would be the start of negotiations and back-tracking (and to be fair, it may well end up that way) but I already had a preview of how disruptive the measures against Canada and Mexico were. Does anyone else feel that they mis-managed this episode? ---
**Author:** ![Abs\_max](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/abs_max/32/12379_2.png) [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)\ **Post date:** [April 28, 2025, 8:40am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/2 "2025-04-28T08:40:11Z")
I believe there are two reasons 1. we always try to find reasons to justify our approach. For investors who have seen significant outperformance in US stocks, they wanted to believe that for Trump it’s important that stock market outperformance continues. Hence most ignored the risks. Even today most will find 50 reasons why US will continue to outperform. 2. the extent of tariffs & the rationale used was beyond the wildest imaginations for most people. Hence the shock reaction ---
**Author:** ![cubanpete\_the\_swiss](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/cubanpete_the_swiss/32/15446_2.png) [@cubanpete\_the\_swiss](https://forum.mustachianpost.com/u/cubanpete_the_swiss)\ **Post date:** [April 28, 2025, 8:43am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/3 "2025-04-28T08:43:56Z")
I always see everything coming. Unfortunately after the fact. Fortunately it does not matter for me, as I trade what I see. ---
**Author:** ![cubanpete\_the\_swiss](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/cubanpete_the_swiss/32/15446_2.png) [@cubanpete\_the\_swiss](https://forum.mustachianpost.com/u/cubanpete_the_swiss)\ **Post date:** [April 28, 2025, 8:44am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/4 "2025-04-28T08:44:47Z")
BTW: we still don’t know if this was just a dip or the start of something worse… ---
**Author:** ![markus654](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/markus654/32/14844_2.png) [@markus654](https://forum.mustachianpost.com/u/markus654)\ **Post date:** [April 28, 2025, 8:49am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/5 "2025-04-28T08:49:49Z")
Because politics and investing is not my full-time job. ---
**Author:** ![Abs\_max](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/abs_max/32/12379_2.png) [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)\ **Post date:** [April 28, 2025, 8:49am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/6 "2025-04-28T08:49:54Z")
It’s always a dip - just depends on how long you are willing to wait for recovery Everything goes up in 20 years 🙂 ---
**Author:** ![dbu](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/dbu/32/1552_2.png) [@dbu](https://forum.mustachianpost.com/u/dbu)\ **Post date:** [April 28, 2025, 8:57am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/7 "2025-04-28T08:57:56Z")
> [@PhilMongoose](#): > > So how did most of us get caught off-guard? What would be your action if you weren’t? Sell pre-emptively (when?) and then rebuy? (When?) I didn’t get caught off guard, I just didn’t care as I am not trading the news, and I am happy to buy at lower prices (have another 20 years to run). And Trump and US of A will ultimately always do what’s best for capitalism. 😅 But others that are later in accu / close to decu phase should of course be (have already been) more adjusted to risks like these (before they materialize). ---
**Author:** ![PhilMongoose](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/philmongoose/32/12331_2.png) [@PhilMongoose](https://forum.mustachianpost.com/u/PhilMongoose)\ **Post date:** [April 28, 2025, 9:06am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/8 "2025-04-28T09:06:32Z")
> [@dbu](#): > > What would be your action if you weren’t? > Sell pre-emptively (when?) and then rebuy? (When?) I think there could have been options such as: 1. Hedge with puts or short futures 2. Given the very high valuations, re-balance into assets such as gold, cash or T-bills ---
**Author:** ![Abs\_max](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/abs_max/32/12379_2.png) [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)\ **Post date:** [April 28, 2025, 9:12am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/9 "2025-04-28T09:12:31Z")
Have you ever considered what if markets go down by 60% and then recover only in 20 years? Would you still not take any action if you knew this before the crash ? ---
**Author:** ![dbu](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/dbu/32/1552_2.png) [@dbu](https://forum.mustachianpost.com/u/dbu)\ **Post date:** [April 28, 2025, 9:16am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/10 "2025-04-28T09:16:41Z")
A) Nobody can know that in advance. B) I don’t buy once and hold forever. I keep on buying through all that time while it’s in the hole under the ATH. So the “recovery _of the market_ only after 20 years” happens way earlier _for my account_. ---
**Author:** ![Mirager](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/mirager/32/12344_2.png) [@Mirager](https://forum.mustachianpost.com/u/Mirager)\ **Post date:** [April 28, 2025, 9:23am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/12 "2025-04-28T09:23:27Z")
> [@PhilMongoose](#): > > Does anyone else feel that they mis-managed this episode? Yes and no. Yes because the tariffs were well telegraphed, well in advance, no because I chickened out due to self-doubts of when to get out, what % to get out, and when to get back in. I think if I could travel back in time I’d in all honesty do the exact same thing, even knowing the future. Stacking cash and switching ~10% to gold, and rebalancing in the dip **massively** softened the blow, though. ---
**Author:** ![Mirager](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/mirager/32/12344_2.png) [@Mirager](https://forum.mustachianpost.com/u/Mirager)\ **Post date:** [April 28, 2025, 9:35am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/15 "2025-04-28T09:35:11Z")
You mean from the point of view that stacking cash is bad? ---
**Author:** ![Abs\_max](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/abs_max/32/12379_2.png) [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)\ **Post date:** [April 28, 2025, 9:41am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/16 "2025-04-28T09:41:18Z")
That is true, it would depend how much the annual contribution is…with 5% contribution per annum, the recovery time is about 15 years even when market itself takes 20 yrs to recover. ![image](https://forum.mustachianpost.com/uploads/default/original/3X/2/0/20c3125ef78867dcbc3abfdb98253cf8349f816f.png) ---
**Author:** ![Abs\_max](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/abs_max/32/12379_2.png) [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)\ **Post date:** [April 28, 2025, 9:44am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/17 "2025-04-28T09:44:53Z")
Why does it need to be this extreme? why cant it be simply the case of overshooting on the other side in terms of returns Last 25 years return on MSCI ACWI is 6% Last 5 years return on MSCI ACWI is 15% But i think maybe 60% crash and recovery in 20 years might be too extreme. Hopefully this never happens 🙂 P.S -: if we just revert to 25 year average of 6% , then next 20 years returns need to be about 3.8% CAGR (in USD terms) to compensate for the 15% in last 5 years. ---
**Author:** ![dbu](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/dbu/32/1552_2.png) [@dbu](https://forum.mustachianpost.com/u/dbu)\ **Post date:** [April 28, 2025, 10:05am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/18 "2025-04-28T10:05:36Z")
Thanks for the calculation. However - if I got it right - this is only “forward looking” i.e. also assumes one has _just started_ investing right before the crash, i.e. historic avg buy price = ATH? I believe for majority it’s not the case. 🙂 ---
**Author:** ![Abs\_max](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/abs_max/32/12379_2.png) [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)\ **Post date:** [April 28, 2025, 10:11am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/19 "2025-04-28T10:11:53Z")
Yeah i was just starting from current position (whatever it is). So not calculating past returns.. Whatever the current value is . if it drops by 60% , then the portfolio will move as shown in chart. can be a nightmare for retirees ---
**Author:** ![EPeon](https://forum.mustachianpost.com/letter_avatar_proxy/v4/letter/e/e495f1/32.png) [@EPeon](https://forum.mustachianpost.com/u/EPeon)\ **Post date:** [April 28, 2025, 10:45am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/20 "2025-04-28T10:45:32Z")
> [@PhilMongoose](#): > > However, the fact that Trump was going to introduce tariffs on liberation day was known well in advance. His views on tariffs were also well-known and communicated. So how did most of us get caught off-guard? Supposedly, the market has already priced in all available information. So how could the entire market with all its brilliant analysts be caught off-guard?? Or should us FIREr‘s have had a unique insight? (Arguably it feels like we should have, but then, we don’t want to be market timers, or do we? Of course, if it makes us loads of money 🙂). Looking ahead - is there a case for us to be right now in the same situation again, a last hurrah, the Wile E Coyote moment? See Krugman: > **[Trump Is a Virus](https://paulkrugman.substack.com/p/trump-is-a-virus?r=ewr4&triedRedirect=true)** > > Chaos is about to take its toll > Preliminary data suggest that imports from Asia, after surging as importers tried to front-run tariffs, are now collapsing. See the chart at the top of this post. The CEOs of Target and Walmart reportedly [warned Trump](https://www.cbsnews.com/news/walmart-target-trump-tariff-supply-chains/) that we may be seeing empty shelves within weeks. And foreign trade won’t be revived by hints dropped at closed-door financial conferences. Companies need some certainty about policy, which they won’t get. ---
**Author:** ![Abs\_max](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/abs_max/32/12379_2.png) [@Abs\_max](https://forum.mustachianpost.com/u/Abs_max)\ **Post date:** [April 28, 2025, 10:52am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/21 "2025-04-28T10:52:43Z")
> [@EPeon](#): > > Supposedly, the market has already priced in all available information. So how could the entire market with all its brilliant analysts be caught off-guard?? because human beings always try to find a reason to believe that rationality always prevails. if someone says i will shoot myself if you dont agree to my terms, most will think that the person is not going to do that.. but then there is always an occasional person who does pull the trigger ---
**Author:** ![EPeon](https://forum.mustachianpost.com/letter_avatar_proxy/v4/letter/e/e495f1/32.png) [@EPeon](https://forum.mustachianpost.com/u/EPeon)\ **Post date:** [April 28, 2025, 10:59am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/22 "2025-04-28T10:59:06Z")
> [@Abs\_max](#): > > if someone says i will shoot myself if you dont agree to my terms, most will think that the person is not going to do that.. but then there is always an occasional person who does pull the trigger Well - arguably the person in charge acted entirely „within character“ (if one dares to use that word) so the only surprise may have been the amplitude of acting - and the amount of BS reasoning surrounding it… ---
**Author:** ![Bojack](https://forum.mustachianpost.com/user_avatar/forum.mustachianpost.com/bojack/32/281_2.png) [@Bojack](https://forum.mustachianpost.com/u/Bojack)\ **Post date:** [April 28, 2025, 11:06am UTC](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171/23 "2025-04-28T11:06:46Z")
> [@PhilMongoose](#): > > how did most of us get caught off-guard? The tariffs were more severe than the worst case scenario that everyone imagined. They were also announced in an erratic and confusing fashion, with these boards. I think this inspired a lot of uncertainty in the market. [Next page](https://forum.mustachianpost.com/t/why-did-we-not-see-this-coming/16171.md?page=2)