The Boyar Value Group’s 1st Quarter Letter 2025

Boyar Research argues that the first-quarter selloff, while sharp, reflects a necessary reset in expectations rather than a fundamental breakdown. The S&P 500 fell 4.6% in Q1 2025, with the "Magnificent Seven" down nearly 15% on average, yet the broader market damage stemmed from policy-driven uncertainty—chiefly President Trump's tariff announcements on April 2nd, which erased $3.1 trillion in equities in a single session. Nvidia's valuation multiple compressed from 53x to 35x trailing earnings, and Tesla's from 198x to 118x. The top 10 S&P 500 stocks still trade at 24.4x forward earnings, well above their 20.6x historical average, while the index as a whole sits at 20.2x forward earnings, roughly 21% above its long-term norm. Boyar Research contends that the underlying economy remains resilient. Retail sales were strong in March, wage growth has outpaced inflation for nearly two years, and unemployment hovers around 4%. However, recession odds have risen from 22% at year-start to 45%, and growth is expected to slow. The firm notes that falling oil prices—crude down from $80 to $64 per barrel—act as a stealth tax cut, particularly benefiting lower and middle-income households. Proposed tax cuts and deregulation could offset tariff headwinds, though the outcome remains uncertain. The managers frame current conditions as historically favorable for patient investors. Consumer sentiment has fallen to 57.0, near lows seen in June 2022 and August 2011—both excellent long-term buying opportunities. After past sentiment troughs, the S&P 500 has delivered 12-month gains averaging 24.1%, versus just 3.9% after peaks. The firm emphasizes that volatility is structural, not predictive: the index has finished higher in 73% of years despite average intra-year declines of 14%. The message: uncertainty is the price of admission for above-average returns, and periods of fear have historically preceded opportunity.