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Sam Ro: If You Know Where Things Are Heading, Then You Probably Don't Know What You're Talking About

It's been a challenging few days.

There's been a mountain of news about the direction of global trade policy, which has been followed by a tsunami of research and insights intended to help investors make sense of it all.

I've spent a ton of time sifting through much of it, and I've concluded: It is impossible to know what will happen next.

While everyone agrees that the announced tariffs are negative at least in the near-term, the range of potential outcomes is very wide and impossible to define precisely. Not only are the indirect effects hard to capture, the uncertainty is heightened by the possibility that at least some of the tariffs are short-lived or negotiated lower.

Consequently, I'd caution against listening to folks who have a high degree of confidence in the particular outcome they're touting. There are just too many unknowns to be able to model a clean forecast.

A couple of analysts I follow had some particularly insightful commentary on the murky state of things.

"There is no tariff playbook," BofA's Savita Subramanian wrote on Thursday. "Known unknowns are plentiful." From her note:

Investors looking for historical parallels are faced with scant observations from incomparable eras (e.g., 1930s Smoot Hawley ended badly). Import/export exposure by company is difficult to estimate and not regularly disclosed. Full supply chains are hard to figure out. Secondary impacts are even hazier: prolonged negotiations could stall activity spiraling into a recession. Calls to boycott U.S. goods could ramp further. But pricing power and currency moves can mollify tariff impacts. Ex-U.S. multinationals can avoid tariffs (and maybe enjoy lower corporate tax rates) by expanding U.S. footprint. Our constructive equity outlook relies on ...