Hubris, Nemesis, Tariffs, Kings
done for
It’s been a fast market in tariff sensitive stocks, as the people who voted for the tariff man have discovered that the tariff man might impose tariffs.
If one were to design a tariff sensitive stock, it would be hard to go past Cettire as a template. Cettire has built its business on dropshipping goods from Italy thereby legally avoiding duties on items costing less than USD800, and illegally avoiding duties on items costing more than this by using FSFE and HS code switching.
Cettire say that only 7.5% of their sales into the US are from Canada, Mexico or China.
Concentrate
It’s self evident that if the de minimis loophole didn’t exist then neither would Temu, Shein or Cettire. Whilst the Orange man has decided that China is bad, the main game for Cettire is Italy and therefore the EU.
What does the orange man have to say about Europe?
“The European Union has abused the United States for years, and they can’t do that,” Mr. Trump said on Monday.
Having imposed tariffs on China which included removing the de minimis exemption that Cettire built their business upon - Cettire are at the whim of the President as to their existence.
Cyclical or structural? Who cares. It’s buggered.
Hubris brings Nemesis
If I was working at Regal and seeing first hand how the principal had wedded himself to the stock, I’d be thinking about Magellan and Platinum, and how my career was now wedded to the hubris of one man. I’d be looking at the charts of PTM and MFG and plotting them against RPL with a lag.