Stock Portfolio Updates: Correction Deepens, Heed Stops By: Christopher Mistal | March 13, 2025 | Email | Print

Tip for tap tariff policy has economic uncertainty swelling and the market retreating in a manner that some are already comparing to covid-19 and 2020. This seems like a reasonable comparison but now is not 2020. I believe many of the market’s current concerns could be alleviated, likely just as quickly as they arose with more clarity and perhaps a slower pace. When (could the correction end) and where (a possible S&P 500 level) are two questions we would like to have answers to as the S&P 500 slips deeper into correction territory. 

 

To gain some potential prospective on the when, we compiled some data on post-inaugural market performance. Part of the data we shared in a blog post on Tuesday here (copy and paste link: https://jeffhirsch.tumblr.com/post/777762161481138176/4th-worst-post-inaugural-sp-500-performance-since). Aside from confirming the current market retreat has been tough, the table also showed us that this has not been the worst post-inaugural performance, recent history has 2009 and 2001 being even worse.

 

Transforming the data into a chart showing the 30 trading days before and the 100 trading days after the inauguration dates in the blog table resulted in the following chart. Please note, there are an average of 21 trading days per month. In addition to the “All” line, we also separated out past Republicans and past Democrats. Performance has been adjusted to set zero on inauguration day. Trump 2.0 is the current S&P 500 performance as of today’s close, March 13. The weak market performance by Republicans in the chart below is consistent with post-election year performance by party found on page 28 of the 2025 Almanac.

 

 

Trump 2.0 does appear to be tracking the Republican line fairly closely, although the magnitude of this year’s S&P 500 decline is greater. Should S&P 500 continue to track the historical Republican line, an initial low/bottom could occur in the second half of March with a potential retest in sometime possibly in early April. Then S&P 500 could begin to recover like it historically did under past Republican presidents.

 

 

At what S&P 500 level? Since our member’s only webinar on March 5, where Jeff spent time reviewing potential support levels, S&P 500 has plunged through its 200-day moving average and is effectively in no man’s land now just above 5500. This brings lower support levels into play. The next potential level is currently around 5475 and is based upon a trendline drawn from last April’s low through the August low. Below this level is the 5390 area in the vicinity of last September’s lows. At 5390, S&P 500 would be down 12.3% from its all-time closing high and just under its historical average correction of 14.1% since 1948 during bull markets.

 

 

Over the past four weeks through yesterday’s close (March 12), S&P 500 declined 7.5% and Russell 2000 dropped 10.2% while the overall Almanac Investor Stock Portfolio slipped 2.7% lower excluding dividends, interest from cash holdings, and any trading fees. The timely closure of the Free Lunch portfolio boosted the portfolio’s cash balance that served to buffer against broad market declines. However all three subsections of the portfolio did decline. Large Caps retreated 8.2% while Mid Caps and Small Caps declined 13.3% and 11.2% respectively. Across the portfolio eight positions have been stopped out.

 

In the Small Cap section of the portfolio, Mama’s Creations (MAMA) was stopped out on February 24. MAMA had previously doubled, and the remaining half position was closed at $6.23 for a total gain of 86.8%. During its tenure in the portfolio MAMA was prone to wide swings but when combined with recent market volatility and broad market weakness the swings lower got even larger. MAMA is in the consumer staples sector but as a small, borderline micro-cap stock, it is not the best candidate to hold during uncertain times.

 

Healwell AI (HWAIF) has also continued to struggle in the current trading environment and was down 30.4% as of its March 12 close. HWAIF is what we call a “ground floor” opportunity stock. It is not suitable for everyone and if purchased, consider its position size relative to your overall portfolio. HWAIF is growing its revenues, and its combination of healthcare and AI are likely to remain in demand for the foreseeable future. HWAIF also appears to have found support just under $1 and can still be considered on dips below a buy limit of $0.99. Should the broad market stabilize, we suspect interest in HWAIF will also pick up once again.

 

Back in January we did not correctly update Skyward Specialty Insurance (SKWD) in the Mid Cap portfolio section. SKWD was stopped out on January 23 when it closed below its stop loss of $42.45 for a 38.5% gain. However, last month SKWD was listed as buy on dips with a buy limit of $48.70. Because of this we have added a new SKWD position dated February 13, 2025. SKWD is on Hold.

 

Amalgamated Financial (AMAL), Trinity Industries (TRN), and IES Holdings (IESC) were also disappointingly stopped out. All three had been modestly higher in January but began to rapidly weaken with the market in February. IESC’s association with struggling AI stocks also did not help.

 

Lastly, in the Large Cap section, Leonardo DRS (DRS), Sterling Infrastructure (STRL) and Comfort Systems (FIX) were also stopped out. We had raised the stop loss for DRS last update in case there was a retreat in defense stocks on any possible Ukraine/Russia cease fire or potential peace talks. STRL and FIX also got wrapped up in AI excitement and the sector’s recent cooling. Volatility was expected but its magnitude was amplified by growing economic uncertainty.

 

On a positive note, Garmin (GRMN) reported solid earnings in mid-February that pushed its shares to nearly $250 before it got pulled into the overall market’s downdraft. GRMN was hit today but support appears to be holding above $200. GRMN is on Hold.

 

Per last month’s update, all remaining open Free Lunch positions were closed using their respective average daily prices on February 14. This sale proved timely as the market began to rollover shortly thereafter. It was a challenging year for the Free Lunch stocks. Typical small-cap outperformance in January failed to materialize and the Russell 2000’s struggles have only grown. Despite the challenges, several Free Lunch positions did manage to post double-digit returns and the top performing position, Innovex International Inc (INVX), was closed out for a 30.1% gain.

 

All positions not previously mentioned are on hold. Please see the table below for current suggested stop losses.