You often hear the word “reset” when analysts come on television to describe what’s happening now. That’s genuine Wall Street gibberish and, as you know, I don’t like that language. I translate it on the spot. A reset really means something bad is happening that has caught us by surprise. We can no longer like the stock or the sector as much as we once did.

Right now, at this very moment, there are so many resets going on that it’s awfully hard to nail all of them down, quantify them, and decide what they mean to the portfolio. But let me give you a Main Street edge, one thing that is certain: past performance means nothing in the Trump era of investing. 

That doesn’t mean we throw our hands up, give up, and go to cash. This isn’t the 2007 financial crisis. It just requires a different mindset and an understanding that there are fewer stocks to like and we have some of those names, along with others that are excommunicated — at least for now.

Friday evening was encouraging. I felt like I had gotten through to the president with regard to the needless punishment of Apple and Nvidia for their associations with China. Not lost on President Donald Trump: Nvidia and Apple are the two most important companies in the stock market today.

Instead of what could have been a doomsday scenario for both companies, but especially Apple, we got a reprieve. The Trump administration issued guidance late Friday that exempted smartphones, computers and other tech products from its reciprocal tariffs. However, there is a reset, judging by the comments Commerce Secretary Howard Lutnick made Sunday on ABC’s “This Week.” The interview was confusing. Lutnick made it sound like we are dealing with a short reprieve, and no more, as companies present a strategy to reshore their products. Nvidia has already made a commitment and is making semis here through construction of fabs by Taiwan Semi. We don’t know the gross margins, but they are obviously not as good as those made in Taiwan. 

Apple is a tougher case. The company’s shifting of some production to India, the default destination for the iPhone, may not be what the president wants. There are hardliners within the government who want no exemptions. Apple must break ground in the United States to make its products. The impossibility of it all makes me think that Apple goes from “must own” to “never own,” which would be a reset to end all resets. But what are we supposed to do? Take a beating in the name of a strategy we have had for years when the election of President Trump heralds a new era where phones are much more expensive and we don’t upgrade unless we break our phone? And we buy Apple at our own financial peril? 

The potential saving grace would be if this means phones made in South Korea are also subject to tariffs. If so, Apple could steal more market share from Samsung. Of course, phone companies must continue to subsidize the selection of new phones to encourage switching. Again, that means we have a reprieve but it’s going to be a new status quo, and it is one that I find untenable when it comes to investing. I believe it is an imperative to cut back this position tomorrow into any strength.

As is so often with Club, we can’t do what you can do. It has been the bane of my charitable trust for more than 20 years and it is one of the reasons why I abhor those who judge how we have done here. I was a successful fund manager, 24% average annual return after all fees versus a benchmark 8% during my 14-year-run and there’s no reason to think I got stupid when I started this project and I still think it a project. You get what other people paid millions for and all I can do is my best, but my best in the face of this president isn’t good enough. From what I can tell, nobody else’s best is either.

In other words, I can’t envision a world where I can extract myself from this position until Friday, even as I would like Monday’s prices. That said, I want you to know if there is additional clarity that exempts Apple, but not Samsung — and from what I can tell that hasn’t brought up outside of me mentioning it Friday and who knows if the White House even listened — I will have to change my mind back to my previous, much more positive view.

Who knows what “exemption” means anymore if you can have an exemption Friday and an excommunication Sunday. As John Maynard Keynes told us, if the facts change, we must change, too. 

The problems with Apple being “transferred,” a better word than reshoring, is that it would gut earnings for years and reduce it to an also-ran tech company. I have no other way to say it. We might still prefer the iPhone, but the iPhone in your hand may be your phone for good. Why upgrade if the cost is $3,000, unless a Democrat wins the next election, and the candidate runs on some sort of peaceful coexistence between us and China. 

Of course, it is possible that the Apple doomsday decision might be alleviated as part of some sort of “talking with China” policy, meaning it is better to talk than have an economic war devolve to a hot war. That’s something we want to avoid but it is not clear if the far-more-prepared China feels the same way. Such a strategy can’t mean permanent status for Apple to build iPhones in China because there is no imperative in this White House to help Apple whatsoever. In fact, the antipathy toward Apple is a relatively untold story that only I insist on telling. Believe me, there is no love lost, despite Apple’s commitment to spend more than $500 billion in the U.S. over the next fours. There’s a constituency within the White House that still believes Apple is two-faced, all talk and no action. 

I am not an Apple defender or a promoter. All I can do is tell you that there are some in the White House who feel Apple is a bad actor, and the president, for all I know, is among them. The unnerving silence from Apple just puts the reset on Trump Time. 

Suffice it to say, this new position is made with a heavy heart. Apple has been making us money since it was about $5 share. But sentiment is not something in keeping with portfolio management, and as of now, it’s a dismal prospect for my trust.

Nvidia the stock is divorced from the fundamentals of Nvidia the company. It doesn’t matter that CEO Jensen Huang says that the Chinese Deepseek initiative is actually positive for Nvidia. It doesn’t matter that I believe Microsoft’s cooling data center ardor just means it is transferring cap ex to OpenAI so it can make its quarter. It doesn’t matter that other hyperscalers swear by their data center needs or that the arms merchant that is CoreWeave will most likely tell us a story of “sold out” of all of Nvidia’s chips. 

It doesn’t matter because the stock is captured by lunatics. How can my charitable trust be held hostage by lunatics? 

Once again, I have to measure the temper of the times, and the fluidity of events, and recognize that they have been overtaken by its meme status, and I feel I have lost my way with Nvidia as it has become a name and not a company.

How this all happened remains a mystery to me because we were onto Nvidia seven years ago and I have chosen to be ignorant to the metamorphosis of this stock’s status. Further, I had hoped that the stock had shed those fellow travelers, those who knew little about the company except that its stock had strong  momentum and the proper direction. I thought that after its precipitous fall it would lose its meme status. 

It has not.

It is no longer investible under these circumstances. Stocks change, we change. William Jennings Bryan once famously said that “you shall not crucify mankind upon a cross of gold,” and likewise we can’t crucify our portfolios upon a cross of Nvidia. It’s all fitting given that the president fashions himself as an acolyte of the relatively unstudied William McKinley, the Gilded Age president much admired by Trump.

Wells Fargo missed. It just did. I don’t know how, given that the cadence of the quarter was a good one and the compliance overhang is lessening. But JPMorgan didn’t miss and the disparity was painful. BlackRock turned out to be much more hostage to the worst beginning of a presidential stock market since Herbert Hoover. In that environment, it’s difficult to own an asset gatherer as the assets themselves are going down in value. 

As these columns are devoid of spin, Wells Fargo and Blackrock missed the mark. 

Why stay with Wells? I liked the cadence and I hope the asset cap, now seven years on, should be removed with a more open-minded Federal Reserve and a much better-run management team without anyone left from the old regime. That makes it needlessly punitive. As we mentioned in our summary, Wells bought a lot of stock back at a real bad level, something akin to what Nucor did. We need to watch these buybacks during such treacherous times. I am not wedded to Wells, but it is cheap and will have loan growth unless we have a recession. The stock acted as if the recession has already started.

Blackrock was going for higher multiple status with all of this public-private infrastructure investing. It also has the best technology in its Aladdin programming. But without the outperformance of its most important asset — stocks — the infra plan was just dross, something to dress up the company’s underperformance. You should not have a premium multiple if you are levered to the value of stocks, hence the hideous action of this stock since we purchased it.

We are patient and our patience has historically rewarded us. BlackRock can regain its allure. But it seems like a big mistake right now, one that you could argue could not be foreseen. Did anyone think that Trump 2.0 would be the worst thing that could ever happen to stocks? That said, who cares about forgiveness? I care about a degree of proficiency as a manager and while Wells has been a good one over time, it’s been horrendous this year, but not as bad as BlackRock. At least Wells has been making us money. 

I am furious at myself because of BlackRock.

If we sell BlackRock right here and the market turns up we will have made a mistake. After all of these years, it turned out to be a bull market stock and not much more. 

The resets are all over the place. Anything even remotely connected to China is something that feels like investing in there in 1971, before President Richard Nixon went to China. It is arguable that you must sell anything connected to China and that includes Danaher and Dupont. 

The latter is so painful, as it went from winner to loser despite an ever-so-slight exposure to the Chinese government’s hit list. It’s not the electronics division that is being spun off. But the electronics division now has the sword of Damocles over its head so we have not bought more. We can’t. Who knows if electronics is next? The good news, if there is any, is that the electronics division is now recognized as worthless as part of any sum-of-the-parts analysis. 

Danaher is a once-great company that can become at least a better company the day that CEO Rainer Blair is fired. I have done enough work away from Wall Street to know that there is a basic failed initiative of the company to seed potential clients. It just disappeared under Blair and that’s still one more indication on top of his ridiculously suboptimal buyback and endless missed quarters. All of this company’s history since the time I first started investing in it in the 1980s indicated it would pivot and do the right thing. That history is, in a word, rendered worthless by the CEO.

Final reset: the data center. Once the keystone of the new industrial revolution, it is now a sign of profligacy. That has made Dover and Eaton, which have small portions of the data center as keystones of their stocks, considered washed up. Dover is a company made up of a portfolio of different end markets and should not be held to a data center pigeonhole. 

However, I have no illusions about Eaton, though it has the data center as well as climate controls as bedrock product lines. The swiftness with which the market changed their stripes caught us unawares and big gains weren’t taken. 

That sin is on us. Damn, again, my woulda, shoulda anger steams beneath a somewhat placid exterior.

Once again, ahead of a Wednesday Monthly Meeting, I don the hair suit of portfolio shame. I figure let’s get it over with so we can spend more time on your questions than we have typically done. That way, we can be more expansive on what you want and less remonstrative in the most painful of ways. So get those questions in. Unless something changes radically, it will be business as usual in the Trump regime and everything is minute by minute. Witness the addition of Dell to the bullpen, only to have it cast off to oblivion and then brought back from the dead on Friday.

Bear with us. We will get it right more often than others. Understand that the situation is fluid because the president’s judgment is fluid, not because our tenets are forgotten. We can do better, but we can’t be clairvoyant and clairvoyance is called for in this market. 

(See here for a full list of the stocks in Jim Cramer’s Charitable Trust.)

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