As many of you know, the Trump administration is in control now, and they have been making big cuts to federal agencies and programs, and firing and/or laying off federal workers.
Obviously, the intent is to reduce federal waste and overspending.
I’m not going to get into the political ramifications on this blog post. But just compare what trading had been like under the Biden administration compare to now under the Trump administration. Surely, it can be thought of as too early to make such comparisons, but because a lot of efforts have been made to make major cuts to federal programs and agencies, that it’s important to make those comparisons at this point.
Biden’s Stock Market and Economy Was More Stable
Under four years under Biden, I felt the stock market was more stable. Biden inherited a ravaged economy and stock market, affected greatly by the Covid-19 pandemic and Trump’s response to it. In 2020 there was a stock market crash, and the country was under lockdown. People were dying and many were hospitalized with ventilators. We all know how horrible it was, but the Trump administration was trying to play down the severity of the pandemic, initially.
Biden inherited the mess, and was more busy with the economy and pandemic, that he kept Trump tariffs in place, at least most of them. If there was inflation during this time, I think that it was the residual impact of the trade tariffs that brought about any rise in inflation.
All that said, under Biden, the stock market was more stable compared to the past couple of months under Trump in 2025.
The Stock Market Under Trump, So Far
In 2024, the stock market achieved all-time highs. Nvidia was surging because of the focus on AI-driven microchips and technology. Those all-time highs were achieved several times in 2024.
After Trump was re-elected in Novemeber 2024, the stock market trended downward, only to start trending back upward closer to Trump’s inauguration. When Elon Musk was appointed to “clean up” the waste in our federal government with DOGE (Department of Government Efficiency). Federal agencies like USAID (a long running agency providing humanitarian aide) were essentially gutted and employees worldwide were fired. Other agencies were looked at and more firings and layoffs commenced.
The ripple effect of these massive firings and layoffs affected the stock market immediately and we saw a downward trend since about the beginning of February 2025.
The official launch of the new trade tariffs also wreaked havoc on the stock market, as the DOW fell almost -800 points in two consecutive days, and we’ve seen more red days than green. The green days I considered repreives from the red days, and more red days continued and we are still seeing those effects of the tariffs and gutting of federal programs and agencies, with the Department of Education being just one such federal entity to get hit with Elon’s DOGE.
What Can Happen Now?
Well, Warren Buffett saw the writing on the wall. He sold many of his positions in the 4th quarter of 2024. He even sold major stakes in AAPL. He reduced his positions, and to provide more cash to buy more shares when the stock market is down. Good strategy, but it looks as if he saw all this coming.
Western Sage Equities is more cash now than stock positions. And we are following Warren Buffett’s lead, and you can follow Warren Buffett’s holdings here.
Something of note: It looks like Warren Buffett is invested in the Chinese EV car company BYD, and no shares whatsoever in Elon Musk’s TSLA.
Either way, we continue to follow our motto: “If you fail to plan, you are planning to fail.” —Benjamin Franklin
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