Louis Llanes Reflects on Market Crashes and Shares Long-Term Investment Wisdom
October 19, 1987 — infamously known as Black Monday — witnessed the largest one-day percentage drop in the history of the Dow Jones Industrial Average, wiping out approximately $500 billion in market capitalization and rattling investors worldwide. Yet, Louis Llanes, a portfolio manager and contributor to TheStreet Pro, recalls feeling the opposite of fear. “No, no, no,” he said. “It got me excited because I was more involved with global macro at the time. You could be short, long, in commodities, stocks, bonds, currencies.”
Founder of Wealthnet Investments, LLC and author of The Financial Freedom Blueprint, Llanes discussed his broad market perspective and investing insights during a May 15 interview on TheStreet Stocks & Markets Podcast with Chris Versace, lead portfolio manager for TheStreet Pro Portfolio.
Llanes emphasized the importance of investing with a long-term view, noting that newer investors tend to fall into two camps: those who are self-directed and capable, like engineers, and those with less time, such as busy managers. For all investors, he advocates strategy grounded in economic fundamentals rather than emotion. “The biggest problem you get is…people hearing all sorts of things and only focusing on the wins, not the losses,” Llanes said. “Those who talk a lot about how much money they made probably aren’t doing as well as you think.”
source: Yahoo Finance
Highlights:
Llanes views Black Monday as an opportunity, highlighting the value of global macro investing.
Advises investors to build strategies based on economic principles, not emotions.
Cautions against being swayed by anecdotal success stories in investing.
Navigating Tariff Turmoil: Llanes’ Take on Trump’s Trade Policy and Market Impact
Expect Winners and Losers as Tariff Strategies Evolve
Turning to recent market disruptions caused by President Donald Trump’s evolving tariff plans, Llanes pointed out that the initial tariff shock was always expected to be rolled back due to its impracticality. He explained, “Right on its face, we knew it wasn’t feasible. So we knew there’d be some pulling back.” While negotiations are likely to normalize, the aggressive initial announcement accelerated dialogue and movement faster than traditional, country-by-country approaches.
Llanes urged investors to recognize that tariffs will create a landscape of winners and losers. He anticipates interest rates to remain elevated, largely supported by increased U.S. investment. Contrary to alarmist predictions, he believes tariffs will not trigger runaway inflation.
He warned that rapidly growing, highly overvalued companies could face significant headwinds as the higher interest rate environment tightens capital availability and investor appetite. “That will hold up interest rates,” he said, “and I think that’s going to affect the real fast-growing companies that are way overvalued. They’re going to struggle, I believe.”
Highlights:
Tariff rollback was expected due to impractical initial implementation.
Tariffs accelerate trade talks but create a market with clear winners and losers.
Interest rates likely to stay higher, supported by rising U.S. investments.
Overvalued, fast-growing companies may struggle in the tightening environment.
Llanes’ Core Investing Rule: Cut Losses Quickly, Let Profits Run
Advice to Investors to Avoid Emotional Decisions Amid Market Noise
Llanes reiterated a timeless investing principle: “As soon as you know you’re wrong, get out.” He stressed cautious management of winning positions as well, advising investors to be hesitant about unloading securities prematurely. He acknowledged that investors, especially those with demanding careers such as doctors, often receive mixed signals and noisy advice. This can cause emotional reactions rather than rational decisions based on sound economics.
His counsel is to maintain discipline, focus on long-term strategies, and avoid being swayed by market hype or panic. “Let your profits run, cut your losses short,” he summarized, highlighting this rule’s enduring importance in navigating volatile markets.
Highlights:
Immediate exit recommended when recognizing a losing position.
Exercise caution before selling profitable investments.
Emphasizes disciplined, economics-driven strategies over emotional reactions.
