Welcome back everyone today on the Joseph Carlson Show. We have the tariff. Panic stocks are falling after Trump's liberation day when he unveiled his grandiose tariff plan. Now, whatever was being liberated, I'm not sure. I'm not confident of what was being liberated, but it certainly wasn't our portfolios. The Dow Jones is currently down 3%. As of right now, the S&P 500 is down 3.7%, the NASDAQ is down 4.7%, and they're going down further.
This isn't where they've gone down further in their backtracking. They continue to plunge. And the reason why I Simply put, the Trump tariff plan was far more extreme than anyone anticipated. In fact, out of the analysts expectations of the range of tariffs, this was on the most extreme side, in most cases more extreme than the most extreme side that investors expected. The Trump tariff plan is a. Broad set of. Tariffs at least 10% on virtually every trading partner across the. Globe.
The tariffs are slapped on so many countries that a lot of people have even heard of some of the countries. Some of them aren't even inhabited. They just have apparently. Penguins living on them, but they're getting tariffed as well. The tariff plan is so broad, so indiscriminate, so extreme with the numbers. So steep of tariffs. That it's almost difficult to even comprehend how this is going to work out, what's going to happen. Investors are in full on panic mode.
They're trying to absorb the information. Right now they're discounting any company that has any business outside of the US, which is almost every company. So what we're seeing here is the market's reaction to a plan that has an incredible amount of unpredictability. The market doesn't know what's going to happen. Investors don't know what's going to happen. Business leaders don't know what's going to happen. What's going on is literally unprecedented.
It hasn't happened in the past 100 years. No one living has a memory of anything happening like this. So what we're living through right now is an interesting time where investors are trying to discount companies for their cash flows in the future. But we have no clue what's going to happen. So we'll be going through the announcement yesterday, breaking down what it actually means, the math behind it and some of the mixed messaging that the White
House is giving. We'll also be going through what I believe are going to be the biggest winners and. Losers of this. Plan the long term implications of it and my game plan going through this now. Let's go ahead and start off by just highlighting some of the companies in their reactions today. This is how investors are reacting to Apple now. As of right now, Apple's down 7.85%. It's not everyday you see a company like Apple trade down above 7%. This is a huge sell.
Off in this company. Apple has a lot of. Exposure to China and China was one of the places that got the steepest level of tariffs. In fact, they're almost incomprehensibly high when we look at other companies here we have Amazon, another company that has huge exposure to China, not because they're doing a lot of business in China per SE, but because Amazon has a lot of sellers from China selling Chinese products. To the US. It's nothing new, but Amazon is now down. 7% as a.
Result Nike, of course. Manufacturers. A lot of its. Products, most of it comes from Indonesia, China, Vietnam, those countries all. Had tears put on. Them Nike has nowhere to escape. The tariff they're. Going to have to pay a lot of money additionally, which is a big input cost for this company. So this one's trading down big time today.
We also have software. Vendors, even companies that really don't manufacture products in different countries, they're just simply selling software, are going down. Now part of this is because a company like. Salesforce is just high beta. Meaning anytime the market goes up or down. Salesforce will likely follow, but to a bigger. Extent. So it's high beta. To begin with. But there's also the. Argument that the. Tariffs will likely. Slow down the economy. They stop trade. They create.
Friction. If that happens, companies will pull back on the amount of. People they hire Salesforce. Makes more money the more. Seats you have. They have per user license agreements for most of their companies. So if business slows down and you hire fewer employees, Salesforce makes less money. The stock is down 5% today after already being down quite a bit. It's down 22% year to date. We continue on Shopify. Even Canadian companies are getting hit hard.
Shopify, the online retailer, is down 17%. Now again, this is normally. A very high beta stock. It also trades at a pretty. Hefty valuation so as a couple things already working against it, but this company makes money from small businesses that in most. Cases. They they. Get their product from. Overseas, every place they're. Getting their product, you name it, is being tariffed. So all of these companies that are selling on Shopify now have input. Costs that are greater.
We have S&P Global right now. That's holding up a little bit better than the rest of the market now this company. 'S obviously very strong. Really wide Moat company, but I think S&P Global. Probably should be lower. Based on this news, S&P Global is a market company. They specialize in markets. They do better when the stock market is higher, when companies are issuing debt, when economies are growing, when there's more momentum.
This company overall makes more money in every line of business. When markets thrive and tariffs are likely to slow down markets, they'll slow down all different components of. S&P Global's business net is hit hard today. Investors have sold the stock down 5.6% on the day that's after. The stock is already. Down below 20%. Below its high. So this one really is selling down more today and investors are concerned because Meta. Has a lot of advertisers, lots
of small. Businesses advertise on Meta, that's how they make all their money. If those small businesses can't survive the increased. Cost of tariff. The increased cost of doing business. Advertising demand will likely pull back. If advertising demand pulls back, that of course will impact Meta's top line. Now, of course, we have Google. That one's down 2.9%. Now Google's not trading down quite as much as Meta. I think that's for a couple different reasons.
One of them is Google's already so cheap, the company's treating at such a low PE. Ratio that there's just a level of. Resistance there. How cheap can this company go? How much can you discount? It for future threats. O there's that. Aspect of it that it's already at such a low. Valuation much cheaper than meta at this point. But Google also is a little bit more. Diversified than meta, it's not solely reliant on small businesses. They have the cloud. Business. They have YouTube.
They have all sorts of. Different diversified revenue, so this one is impacted to a smaller degree. We have SML down 4.5%. This company remains right in the center of this whole debate. SML sells this. Specialized product that everyone. Needs to create these. Chips if there's less. Demand for these chips less importing, more barriers. It may impact ASML business now long term, I think this company is better positioned than investors believe.
But right now it's being sold. Off with the pack. Tesla's down 4.22%. No surprise here, you may believe. That the tariffs will. Help Tesla in relation to other car companies because Tesla makes most of their stuff in the US, but Tesla does a lot of business in China. They have manufacturing in Germany and right now these tariffs stand to make auto manufacturing far more expensive. NVIDIA is down 5.8%. This stock is. Already very high beta, so part of it is because.
The stock simply just trades around a lot, but it's also being grouped in because NVIDIA is going to. Face these tariffs as well they do. Business all around the world. There's now more friction and more cost to doing business around the world. Now finally we get to Costco, which is moving up today. It's in the green by 1.4, 6%, defying gravity. Costco's a company that many people are waiting. They're waiting for the time where Costco finally trades down. To a reasonable valuation.
It. Trades at such a lofty high multiple that. There must be some market crash or some time of panic where Costco finally goes down and here we have market panic. Here we have real, fair, real. Uncertainty, real predictions about the future and how things may work out in a bad way. And Costco's in the green. Well, why is this? For a couple reasons. Costco is a company that not only does well during good times, but it's considered a safe haven during bad times.
Costco is a subscription. Company that sells stuff everyone needs, no matter. What? They have to buy it. They have to pay for this stuff. So I view Costco as a company that investors flee to during times of uncertainty. Like we have, right? Now, Costco is uniquely positioned to have better cost structure than other retailers because of their limited amount of SKUs, meaning they sell fewer unique items so they can have more sweetheart deals in their bulk ordering even though things
will become more expensive. For Costco, they'll. Become proportionately far more expensive for competing retailers, increasing the value proposition of Costco. Relative to their competitors. So we have all of these stocks, the majority. Of which are deeply in the red and overall this is a response of the uncertainty and unpredictability, the increased risk that was introduced yesterday. Now before we go into my.
Strategy what I. Personally plan on doing throughout this and how I see it working out. I just want to go ahead and and. Relive a little. Bit of what happened yesterday just kind of go through and and what I saw and my reaction to it. So this whole thing. Starts off with. President Trump talking about how we've been ripped off right as Americans, we've been ripped off by other countries. That's the story. Now personally, I don't. Believe that's the case. I think of a country somewhere
else implements tariffs. I think that's their. Problem I don't think the US is being ripped off because. We have to pay tariffs. That's something you can argue, but that's very much a Milton Friedman way of looking at things. A free trade, easy to do. Business it's better for your country. So there's different economic arguments here and everyone's entitled. To their view, if you disagree with. It that's fine. So I don't personally believe as Americans that we're getting
ripped. Off this whole time by doing free. Trade, but putting aside. Whatever your personal philosophical. Economic views are President Trump goes up there and he makes that case. He makes the argument that the US is being ripped off by other countries. They have these tariffs. We don't. We're paying a tax to do business with them. They're not paying a tax to do business. With us. So he's. Kind of gauging it, he's kind of saying this is like
implementing. A. A. Fee like a membership, like it's like paying the Costco yearly membership to do business with the US consumer. He views the US consumer. As this very valuable thing to have access to. Our market and our our. Wallet to have access to. All of our consumers that want to spend money, they have all this economic spending power. You have to pay taxes to do so. You have to pay the membership to enter. That's kind of the way that he was phrasing this.
And then he brings up. This this board. Now the board is comically small, you can't even see it even with the cameras. The the reason that they made it so small is because he said it was windy, so if they made a giant one it would. Just blow away so. The the reasoning behind it was kind of funny to begin with, but of course you can't even see what's going on here. He holds this up. The the line items are like.
1212 pixel. Font and we can't see what's going on so we're we're trying to figure this out and then he's reading it off 1 by 1 now I found an HD version of the same image the board that. He had. That he was presenting. Here's an HD version of it. And this is what he calls the reciprocal terrace. Now keep in mind this is just one of the boards, so if you think it's only these like 50 countries, you're wrong. It goes on and on. There's like.
Six of these 6. Different images of every country that you can think of. In fact, I guarantee you there's countries you've. Never heard of before. There's ones listed that didn't even have many people living there and we're tariffing them as well. Now looking at this. Board, there's a few columns here. We have the country or territory. Off to the left. Which is like China, the European Union, Vietnam, so on. Then we have the. Tariff charge to the USA which?
Includes currency manipulation and trade barriers. So. This percentage right there looks like it's accumulation of all. Three of those type of factors you're. Factoring in the base. Level tariff they charge. You're also factoring in the fact that other countries manipulate their currency and. Also, there's trade barriers. Now trade barriers for people not familiar are non tariff ways that countries make it. Difficult or. Taxing or expensive to do business with them.
So technically they're not charging a. Tariff, but they're really. Doing the same thing by making it. Very difficult to import your. Product and flood your product into their country. For example, China does this all the time. They have forced technology transfers. China has required foreign companies to share and transfer their proprietary technology to Chinese joint ventures. So if you want to do business in China.
Like if I wanted. Qualtrum to do business in China. They may force me to give up proprietary information to give. Up the way. That I do things, the methods of doing things to other competitors. So you have to make these decisions which technically. Aren't tariffs, but they're. Costly and expensive, nonetheless there's a whole list of them there's. Quotas. There's licensing, there's agreements, there's red tapes, there's. Delays. There's overly. Scrutinizing inspections and so
on and so forth. Countries can do things to disincentivize imports without a blanket tariff and. I believe that's what. Was going to be factored in here. So my assumption was that they came up with some type of algorithm or some type of way of calculating the inclusion of trade barriers, price manipulation and the base level tariff and that's how they got to this number. But upon further investigation, we found out that these numbers have nothing to do with.
Tariffs or trade barriers? In and of themselves, they only have to. Do what? Trade imbalances, trade surpluses. We have an administration official. That gave us the. Exact calculation they used to quantify this reciprocal tariff number. Here's what the actual. Formula looks like. Now, it's been a while since I've done advanced algebra and I don't recognize a lot of these these symbols, but if you break it down, this is basically what it means.
You have the exports. A country does minus the imports divided by the imports. So you're basically just. Taking the amount of exporting, dividing it by the imports, the United States Trade Representative detailed a. Formula that divides. The country's trade surplus with the US. By its total. Exports based on data from US Census Bureau in 2024 and then that number was. Divided by two. Producing the discounted rate. So basically the number right here. Where it says tariffs charged.
To the US doesn't actually represent tariffs charged. To the US at all. For most of these countries, like China, you have a 7% tariff. It's very minor. This 67 percent is the trade imbalance. It's the trade imbalance in surplus that the US has with China. The USTR statement said that. While it was technically possible to calculate rates for the actual barriers. This methodology would achieve Trump's goal of driving down
trade deficits. So this is showing the relationship of. Trade we have. With these different countries, so it's important when looking at this chart. To realize that these. 2 numbers don't represent the same thing. The implication when you compare them side. By side is. That they're the same thing that China's charging US 67% to do business in China and we're only responding. With a 34. Percent tax on them. Therefore we're. Taxing them less?
That's not the case. The 67% is a trade imbalance calculation. It's not a tax, the 34%. Is a tax. So these two numbers are different. The amount that we're now charging them in tariffs is much larger than what they're charging us now. One of the confusing parts of this is President Trump mentioned that even in the cases where a country's doing. Specifically what we're.
Wanting them to do what Trump is wanting them to do, which means that they're actually buying more from the US than they're selling to the US. The opposite thing that China's doing, even for those countries where we're selling more to them than what they're what they're selling to us, we're still slapping on a 10%. Tariff. So we're still. Saying you have. To pay a tariff. Even when you're doing exactly what we want you to do. So this.
Is a head scratcher to me. I don't know what the incentive here is for charging countries, even when they're doing exactly what we're wanting them to do. So we know that the numbers. Off to the left. Of what they're charging us aren't exactly accurate, but we can only assume that the numbers that we're going to charge them right here on the right are accurate. This is. What we say we're going to charge these other companies in tariffs to do business with the US, We kick things off.
Here with a. 34% tariff from China now, obviously. We get a lot. Of stuff from China, a lot of imports from China. US consumers really like buying stuff from China. But with a 34% tariff that becomes dramatically more expensive. And there is a little bit of confusion on this one. We don't really know if this is in addition to the already existing 20% tariff from China or if it's just going to be 34%. So it might. Actually be 50. 4%, we don't
quite know yet. With the European Union, we now have a 20% tariff on them. So all of Europe now notably we have some big territories and countries missing like Canada and Mexico. So I'm still not sure of what we're doing there, but we have. Tariffs all across. Asia, Vietnam, Taiwan, Japan, India, South Korea, Thailand, Switzerland, Indonesia, Malaysia. These tariffs range anywhere from 46% for Vietnam.
Places where Nike is manufacturing a lot of their goods, all of a sudden their supply chains are in trouble. The the cost of doing business in those countries are going to be. Dramatically higher. So that's. The reason that Nikes down big today, what are they going to do in this situation? They really have nowhere. Else to go. Nike sweatshirts and Nike shoes are going to be dramatically more expensive if this doesn't get removed and you go through the. List here it doesn't.
Really get any better and the calculation overall is that this is around a 20% universal. Tariff, which is a. Staggering number when you think about a new tax of 20% to the entire world. Now, the argument here from many people still is that this is a negotiating tactic, that Trump is simply shocking the market, forcing other countries to take them seriously, forcing them to think about their relationship. With the US. And forcing them.
Hopefully to lower their tariffs so that we take ours off so that we have free trade across the board. That's the. Argument that many people are still making, and it's an argument that I had made. It made sense for Trump to use tariffs as a negotiating. Tactic that bring other. Countries to the table to make deals, to make solutions, to talk business. That's something that I could see happening on a select basis in a very strategic manner. That's what he was.
Originally doing a couple months ago. He would tariff. One country, bring them to the table and then make an agreement and. Usually it was resolved. Within 24 hours. Typically before the tariff. Even went into effect. So that seemed like it was more strategic negotiating tactic, but what we're seeing now seems like a change of tone. It doesn't seem like this is just a negotiating tactic. A lot of the commentary seems very mixed on this subject, but what I'm seeing. Is still.
A response from the White House that they're not really wanting to negotiate. For example, listen to this interview here has been whether these are negotiable and what the White House is thinking from here. I can tell you as far as this morning what we're hearing from officials, the signal they're sending is that these are not negotiable. They are not looking to strike deals right now. White House press secretary Caroline Levitt was just. This is a quote from a White.
House official quote this. Is not a negotiation. This is a national emergency. Any country that thinks that they can simply make an announcement promising to lower some. Tariff is. Ignoring the big central problem of their massive non tariff barriers. Just on CNN this morning saying the president is firm in his approach and that if countries had wanted to negotiate, they had 70 years to do it.
A White House official also told reporters yesterday that this is not a negotiation, it's a national emergency and that cutting tariffs now is not enough. That ignores the decades of trade barriers. So we have the posture from the white. House insisting that this isn't a negotiation, this isn't simply a negotiating tactic, because if a country just says they're going to. Lower their tariffs. It doesn't address the trade. Barriers in the other aspects.
So maybe they need to do more, but the attitude right now is that it's almost. Like it's too little too late. Other countries simply can't negotiate even if they want to, and that seems like the opposite message that doesn't incentivize. Bringing people to the. Table. For example, we have the. Example of Israel it. Was hit with a 17% tariff despite saying it would scrap levies on US goods. This shows that even countries that have given concessions that
have come to the negotiating. Table. That said that they want to work in good. Faith with the US. Are still kind of being ignored. As of least. Right now, we don't know if there's going to be a deal struck in the future, but right now it seems like every country's being tariffed. So we have this continued back and forth debate of whether or not this is a negotiating tactic or this is just the new normal, a new way of doing business under the Trump administration.
We have people like Steve Mnuchin going on to CNBC and he's on the side that this is a negotiating tactic. Still today, even after seeing what's going on, he still believes. That these tariffs. Will be taken down. I think it's the larger tariffs that are called the reciprocal tariffs. I'm hopeful that those will be negotiated down, that those are tariffs that will bring people to the table and we'll negotiate
them down. Now, ultimately, we don't know what's going to happen in the future, whether or not a lot of this stuff is going to be negotiated down or whether it's going to stick around for a while. We don't know either. Way but if the tariffs do stick. Around like they're presented here, the market is going to go lower that is going to. Be a very predictable. Outcome of this because these tariffs are simply too steep, do not have major impacts on the earnings of these companies on
their. Ability to source these products for the prices they have. So we'll see what happens in the future, but there's a tremendous amount of uncertainty now in terms of what I do in situations like this, knowing that we don't know a lot and there's a lot of uncertainty is in most cases, I use any type of weakness like this to buy into stocks.
Now that may come across as glib that I'm going to be buying stocks during this time period, or it may come across as me not taking this seriously, like I'm shrugging off these concerns and that I don't think anything bad can happen as a result of these incredibly high tariffs. And I assure you that's not the case during time periods where this. Type of stuff. Happens, causing stocks to sell off dramatically from prices they were just months ago is a
time period. I typically choose to buy. In fact, the time periods where the market sells off the most, like March of 2020 during a time period. Where there is a. Virus racing around killing millions of people. The entire economy was shut down. Logistics and supply chains were shut down. I continue to buy stock. During that time period, I didn't know what was going to happen. I couldn't have a. Crystal clear. Vision of the future, any time. Period where stocks. Sell down dramatically.
There's inherently a lot of unknowns. That is the reason that investors. Get cold feet that. Is the reason that great companies go on sale? So even though I don't like the reason stocks go down, I don't like the reason they went down in March of 2020. I don't like the reason they're going down today. The fact remains that these companies I'm buying are not going to be around. For a year or two. These are companies that will be around for the next 20 plus years.
So if I can get a more attractive deal on these companies amidst turmoil, panic, unpredictability, unpredictable futures, that's a time period where I'd like to increase my share count as much as possible during the time periods where investors are the most. Fearful. Is when we should be buying the most. So having said that, let's go ahead and go into my trades today. The first thing I did was I sold out of a company. All the way which was vici. I own no shares of VICI currently.
Now VICI was doing just fine. In fact, if we look at the company here. The stock price has barely moved. Today only down 1.3%, year to date it's up 9.5%. So this company's in the green, it's doing well. It held up well. It's a very low volatility stock that has really. Good fundamentals. There's no panic mode with VICI. This company will continue to pay investors dividends. They'll continue to collect rent.
I sold this company, which is a low volatility company that's in the green this year, to buy more into companies that have. Higher volatility. That are in the red by a greater extent now one of the. Companies that I introduced. New to my. Portfolio is Equifax. I just bought 100 of this company and I'll continue to add to this position. Right now, Equifax is an introductory position. Now I have it here in the financial. Category because Equifax is.
Overall, a financial and data analytic company. But a? Lot of people have a misunderstanding of what this company actually is. Now with Equifax, this is a company that in the. Previous episode I highlighted. As being an attractive. Stock with the sell off today I believe it provides. A unique entry point. So I decided. To start building my position in this company now I've already.
Talked a little bit about what? The company does, but I just want to mention a few things that I see in the future of this company. One of them is that most people know this company by the credit Bureau, meaning the Equifax is one of the three big credit companies. When you buy a home, you'll get your credit that ran by them because they know all this information about you.
But that's only one part of the company, the more exciting part of the company, one that makes up around half their revenue. Is their workforce solution. Specifically, they have a product called the. Work number, which is basically proprietary information on verifying someone's background. Where they have your work history, your. College information. They know all about you now. For employers, especially government jobs or large organizations, they want to know.
Who they're actually. Hiring. They want to know if you actually went and did. The things that you said that you did. That you went and worked for the companies you did, That you have the background that you do. Instead of calling up your old employer to verify that information, they now use the work number. By Equifax. They have the majority share in this verification market and this is a major. Growth path for this? Company, it's very. Difficult to create this.
Record base of millions of people and. Verify all of this. Information. So they are very strategically head in this important product. And then the third thing is Equifax has become a little bit like a data analytics company, similar to how Visa, MasterCard. Have these value add. Services. Equifax has the same thing. For example, they've partnered with MasterCard on offering identity verification solutions.
So they have fraud prevention and they're building out all these different analytic tools that they can partner with other businesses. This is another. Growth path for this? Company Now there's a lot more I plan on going into with Equifax when I do a full video on this one with their history and the database. Breach how they've. Moved to. Cloud they've re architected. The company. How they have major? Efficiencies and headwinds that
are behind them. There's lots of good things going on with this business, but it's one that I decided right now, given the hysteria, given the panic, I'll likely get a lot more attractive of a deal today than I will any other time. So I'm starting the position and I'll continue to add to this one, especially if it dips now in the Story Fund. I continue to add to this portfolio. I'm really excited about the Story Fund. The gains have gone from around 130,000 to now 87,000.
Just today specifically with Amazon, it's down $11,000 O Amazon has sold off big time. We're down 38. Luckily Netflix again is kind of holding U this portfolio. Netflix is really. Carrying a lot of heavyweight hair. While the rest of the Max Seven goes down and Netflix continues to do well, but Amazon is now my major focus. I bought another $5000 of Amazon stock this morning. Even though trade policies change, elections come and go, there's different.
Leaders different. Policies different. Agreements all the time. Amazon's a company that I believe will be around for 20 plus years. I don't really care. Too much if earnings get. Revised lower this year or they get revised higher? Either way, I want to own this company. Because of the earnings. Power I see 20 years from now or 40 years from now when you look at a discounted cash flow timeline the goes out 20 years and you look at a. Couple years. That don't make as much money.
That's not such. A big deal. It's not that big of an intrinsic value change in the stock. The best investors are the ones that can put all the macro aside and hold on to great quality companies through any environment. Benjamin Graham, Warren Buffett made their money. By holding GEICO. Through decades of time, during all different. Types of market volatility. And uncertainty, they didn't look at next quarter's estimates and sell. Out because they got.
Frightened. That's not the way that they made money in these compounders. Like GEICO the. Same thing can be said for many great investors. You look at Peter Lynch in the times that he bought. Aggressively was during. Macro environments when everyone else is panicking. So even though Amazon is going to be impacted heavily by tariffs, they're not going to avoid this somehow. I will still use.
It as an opportunity to buy into this company because over the fullness of time, I still see Amazon well positioned to win big. So that's what I'm doing with My Portfolio and I'll continue to give you more. Updates throughout this week. And next week, so if you haven't. Already. Subscribe to the channel and I'll see you in the next one.