How To Ride Out Wrecking Ball Trump

Even after the fall, I figure sticking 20 percent invested isn’t too extreme. 

Decades ago, when Xerox couldn’t keep pace with Canon and Nikkon, I said “sayonara” to Xerox which was good for years and years to come. Even Xerox surrendered fully to Japanese competition. Its days numbered. No longer  9 cent a copy page was history.

Xerox management floundered in their acquisition program of diversification. Wall Street even saddled them with a second rate brokerage house. How the mighty had fallen! Just like Polaroid, too. 

Later on, cellular phones arrived. I started with Nextel at $3 a share. One day, my son, Scott,  who worked in marketing at Nextel called to explain the opportunity. “To hell with your transistors,” he shouted.  

Then, I found my way into Apple Computer and got to know Steve Jobs who was as difficult and cantankerous as any headman anywhere, any place. With the follow on in personal computers, Apple for me became a great lesson in my lack of fortitude and perception. 

Warren Buffett later showed up and took an enormous position in Apple, thereby violating all precepts of portfolio diversification. Buffett’s “make hay while the sun shines” concept rests in the high hundreds of billions and may reach over a trillion. This despite Donald Trump’s tariff invasion which seems aimed at taking down by several notches, Apple's primary. 

So far, the Apple as a stock hangs in. I finally succumbed and bought myself a 5% position, spurred on by Buffett’s fortitude. 

In the busy, worldwide cell phone marketplace, I’m curious to see whether Buffett shrinks his exposure or goes on to add another major leg to his play. 

The perils of following a guru into his world can be dangerous. Warren’s control position in Occidental Petroleum which recently peaked in the high fifties now ticks in high thirties (many billions invested here by Warren who likes to control hard assets).

Occidental Petroleum

If Apple ever had a reason for crumbling, now is the time. The market worries about Trump’s tariff war. The economic environment is more vulnerable to the double threat of inflation and an ensuing recession caused by wild tariff impositions. Then add in the issue of what the response of the FRB is supposed to be (probably no active policy action coming). 

We are in no man’s land where it’s better to do less than more. Maybe.