My recent choice of articles may lead readers to wonder if I have become a Trumpophile given to Trumpsplaining. Actually, my biggest worry was noise storms causing anxious investors to do something regrettable.
US President Donald Trump has seized major political and economic narratives and kept them centre stage with a mix of shock tactics and showmanship, churning up asset markets. Through local (GNU) or global (Trump) shocks, mentally stressful events have abounded.
In seeking a better way to express this, I am deeply indebted to Saliegh Salaam of Vunani Fund Managers. He wrote a piece he called A Playbook for Market Volatility (or the “Stoic Pause”). Most market news we read is short term in nature — it decays quickly. As Charlie Munger used to note, “the dogs bark and the caravan moves on”. How do we build a longer-lasting mental framework for navigating inevitable periods of market volatility?
The original Stoics were ancient Roman philosophers who emphasised self-control and mastery. As Warren Buffett has noted, it’s not IQ that gets investors into trouble but temperament. Stoicism can be a tool to help manage your emotions. I refer again to Covid lockdown times (that’s the most recent crisis, so freshest in mind) in which Salaam felt grounded by the book Meditations by Marcus Aurelius. The takeaway line: “You have power over your mind — not outside events.”
This is key. In those times when “years happen in weeks” (tariffs, political upheaval, currency shifts), how do we preserve our mental wellbeing to maintain composure and make good decisions?
Salaam’s stoic framework is a three-step model: Can I control this? If not, can I influence this? If neither, watch alertly.
Focus on decisions and exposures that have tangible merit. That’s fairly easy in a stable environment. Reacting to noise with speculation is probably self-defeating. We can’t control tariffs or geopolitics, but we can shape outcomes by preparing portfolios for a range of scenarios. You prepare for inevitable periods of shock or market volatility by looking at things like your exposure levels. Subcomponents may have individual merits in normal times, but do these parts respond uniformly or differently under stress? Inflation, deflation, growth, recession, war, geopolitical surprise and central bank action are variable stressors. Can the way you prepared and positioned your portfolio deliver a tolerable outcome under surprise stress?
As Warren Buffett has noted, it’s not IQ that gets investors into trouble but temperament
If you can’t control or shape matters further, then rather spectate smartly, if it’s out of your control. (Salaam has a yellow sticky note on his computer screen that reads: “Control? Influence? Spectate?”.) Volatility means risk — but something hurting your portfolio can present an opportunity.
To exploit this, you must hold opposing ideas in tension. Argue against your own ideas. Be dispassionate. Tolerate the devil’s advocate. Avoid confirmation bias. Keep an open mind. There’s much unknown — and unknowable. The mindset isn’t about being right, it’s about being open to change.
Consider “the grandchild test”. Ask: will this matter in five years? Compare the transient from the enduring. What would your future self wish you’d protected during a downturn? Remember the formula for stock market returns: total return = rating change + earnings growth + coupon. Stick to that.
To avoid “strategic whiplash”, you need to set non-negotiable guardrails that perform well in all markets. Your guardrails save you from yourself. Tactics such as sector rotations, timing and asset classes must be tweaks that fit within these guardrails. Stoic actions during crisis are very deliberate; pausing to think and slowing down aren’t procrastination. Uncertainty means that even perfect information doesn’t guarantee correct decisions — there are too many second-order effects.
Portfolio implications: focus on controllables (don’t act as a spectator); be humble (forecasts break down easily); grandchild test (will events impact long-term drivers?); and guardrails over tactics. This works because clarity is a competitive advantage in turmoil. You can’t predict, but you can prepare.
Here’s the company checklist for stock pickers. Pricing power — can product prices and volumes resist stress? Does the company serve a need that persists across cycles? Balance sheet strength — can it weather adversity? Can management navigate structural change?
We won’t master uncertainty — but we can stop letting it master us. As Epictetus said: “It’s not what happens to you, but how you react that matters.”
Lucas is a portfolio manager at Vunani. These views are personal
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