[Free] Bear Market Business Models: The Companies Built to Win When the World Is Falling Apart + Weekly Article Roundup

Most companies crumble in a crash. These business models quietly get stronger—and we own several of them.

When markets crash, panic becomes contagious. Your portfolio bleeds. The talking heads on CNBC start shouting. Friends send nervous texts. Everyone wants to know the same thing: Should I sell?

But amid the noise, a quieter truth emerges - one you can build real wealth on: some businesses thrive when the market tanks.

Not just survive. Thrive.

And now, with newly announced blanket tariffs on all U.S. imports, the investing landscape has shifted again. These tariffs will amplify inflation, squeeze margins, and push vulnerable companies over the edge. But if you know what to look for, they’ll also expose the strongest business models - the ones you want to own.

This article lays out the traits that define recession-resilient and tariff-resistant companies, the business models that profit from chaos, and practical ways to position before volatility returns in force.

---

Why Most Businesses Collapse in Bear Markets (and Under Tariffs)

To understand the winners, you have to first know why most companies fail during a downturn.

When markets fall, liquidity dries up. Demand shrinks. Credit tightens. And now, with sweeping tariffs on every import, costs across supply chains are spiking overnight. Companies that depend on foreign components or goods have no choice but to pass those costs onto consumers - or eat them.

This is happening while demand is already fragile. That’s a dangerous mix.

Bear markets reveal balance sheet weakness. Tariffs add pressure to already thinning margins. And together, they expose businesses built on hope, leverage, and long-distance supply chains.

The biggest losers tend to share a few key traits:

• Thin margins with high fixed costs

• Reliance on imported goods or components

• No pricing power to pass cost increases through

• High customer churn or weak brand loyalty

These are the first dominoes to fall in a high-tariff, high-volatility environment.

---

What Makes a Business “Bear Market-Proof” (and Tariff-Resistant)

The companies that thrive in a crisis don’t just cut costs and hope. They go on offense when others retreat. They grow market share, protect cash flow, and operate lean, flexible models that adapt quickly to inflation and disruption.

The new tariffs will make that adaptability non-negotiable.

You’ll want to own businesses that exhibit:

• Domestic production and local supply chains: Those least exposed to import tariffs will instantly gain a pricing edge. A tip: small cap companies tend to be more domestic oriented than larger companies.

• Essential products or services: When people must buy, even higher prices don’t stop demand.

• Recurring revenue or contractual pricing: Stability in revenue means more breathing room when costs rise.

• Strong balance sheets: Optionality to absorb shocks, buy distressed competitors, or pivot when others can’t.

We’re not just talking about surviving here. These businesses can grow stronger when competitors buckle under the pressure of falling demand and rising costs.

---

7 Bear Market Business Models That Actually Benefit from Crashes (and Tariffs)

Let’s look at business models that consistently perform well during downturns—and now, could gain an even greater edge as tariffs ripple through the economy.

1. Discount Retailers and Dollar Stores

In a downturn, consumers trade down. But in a tariff-driven inflationary environment, even more Americans seek out low-cost alternatives. The surge in demand for discount goods is both recession-driven and tariff-fueled.

Retailers with lean domestic supply chains or strong private-label offerings will outperform those reliant on imported inventory.

2. Auto Repair Chains and Replacement Parts

New car prices are expected to jump $5000 - $10000 per vehicle on average.

This will encourage consumers to put off buying new cars for longer. There will be more older cars on the roads, and as a result a greater demand for repairs and service.

AutoZone, O'Reilly, and other parts retailers become critical infrastructure during recessions. So do national repair chains. It’s the same story in home appliance repair, HVAC services, and similar "fix-it-don’t-replace-it" categories.

3. Debt Collection, Bankruptcy, and Distressed Asset Firms

Rising consumer costs due to tariffs could accelerate defaults and delinquencies. That means more work, and more revenue - for debt collection agencies and distressed asset buyers. Their business model thrives when others can’t pay.

4. Insurance and Extended Warranties

With tariffs raising costs across the board, the value of protecting what you already own increases. Consumers often add warranties or insurance when replacement costs spike - making these services more desirable in both recession and inflation.

5. Consumer Staples and Generic Brands

High tariffs on imported food, hygiene products, and household essentials will drive even more demand for low-cost alternatives and domestic producers.

Private-label and generic brands stand to win big, especially if they manufacture locally. Retailers that can quickly switch to domestic supply chains will take share from slower-moving peers.

It is quite possible that many domestic producers will raise prices to match the higher tariff-laden prices of imported goods. As a consumer this will make things expensive for you. As a stock owner in these companies, you will enjoy higher profit margins and greater returns.

6. Gold and Precious Metal Royalty Businesses

Most investors know gold tends to rise in times of fear and inflation. But owning a miner brings all sorts of operational risk.

Royalty and streaming companies like Franco-Nevada or Wheaton Precious Metals solve this problem. They get a cut of production—often with no operating responsibility. This business model scales during commodity booms and hedges against inflation and fear-driven environments.

7. Litigation Finance and Legal Services

Recessions bring conflict. Layoffs, broken contracts, unpaid debts, collapsed partnerships. All of it funnels into the legal system.

That’s where litigation finance firms and certain legal services companies thrive. They fund or support lawsuits in exchange for a cut of the settlement. These companies are uncorrelated to the broader market and often see surging demand during downturns.

---

Our Approach: Margin of Safety and Strategic Positioning

Here’s the key: You don’t wait for bear markets—or tariff shocks—to prepare. You prepare by owning undervalued, durable businesses ahead of time.

In our Premium Small-Cap Value Portfolio, that’s exactly what we do. Every stock is chosen with a deep margin of safety, a strong balance sheet, and the ability to weather inflation, market shocks, and now, policy risk. That discipline means we often don’t need to react—because we’re already positioned.

Inside the Founder’s Club, we go further by allocating to sectors built for this exact moment: consumer staples, REITs, utilities, bonds, and preferred stock ETFs. These allocations give us income, durability, and ballast—without giving up upside.

This is how you create a portfolio that not only survives downturns, but becomes stronger through them.

---

How to Invest in These Bear Market Winners

You’ve got three practical paths to get exposure:

1. Individual Stocks
Ideal if you’re doing deep research or following a trusted source (like this one). Tariff-resistant companies in niche verticals are often under-followed and mispriced.

2. Sector ETFs
ETFs focused on domestic producers, utilities, or staples can offer diversification and a first layer of defense. Just be selective - they often include both winners and mediocrities.

3. Alternative Assets and Private Companies
Some of the best models - like litigation finance or distressed credit - are often found in private markets. But a few public vehicles exist, and we're constantly scanning for them in our Premium and Founder’s Club strategies.

---

The Hidden Opportunity: Use Bear Markets as a Springboard

The headlines are screaming. Markets are volatile. Tariffs are rattling entire sectors. This is where most investors retreat.

But you? You should be advancing.

If you own the right companies, bought at the right prices, a bear market is just another buying opportunity. And a tariff shock is a forced repricing of the landscape -a chance to invest in tomorrow’s leaders at today’s chaos-driven valuations.

Crises create concentration. Capital shifts to the prepared. That’s your edge.

---

Want the Full List of Our Bear-Proof Picks?

You’re now armed with the framework. But if you want to see the actual stocks we’re buying, including the ones we believe will thrive in this new tariff-driven market -consider upgrading to Premium.

Here’s what you’ll get:

• Full access to our Premium Portfolio

• Every deep-dive stock report we publish (with price targets and allocations when added to the portfolio)

• My personal portfolio for your reference

You don’t need to guess. You need names. You need discipline. We give you both.

---

Weekly Roundup off Free Articles Published on Our Website

You can read these articles for free on our website - the Substack remains mostly premium articles. There may be a limit to free articles you can read before you need to register to continue accessing more articles. I highly recommend registering and subscribing - this will take your investing to the next level up.

I will follow up with another update on the portfolio performance YTD as well as some portfolio movements for next week in a separate post.

Note: I took a break this week from publishing stock screens as I believed the “Liberation Day” will send most of the stocks reeling. This is exactly what happened. I will resume publishing stock screens next week and we will together look at all the newly discounted opportunities.

Income Investing

1. Dividend ETFs vs. Building Your Own Portfolio: When to Choose Each - It is a choice between control vs convenience

2. How to Build a Dividend Growth Fortress That Survives Any Recession

3. Why Closed-End Funds Might Be the Most Misunderstood Investment on Wall Street

4. How to Use Preferred Stock ETFs as a Hedge in a Volatile Market - Preferred stocks are often overlooked, but they provide stable prices and reliable cash flow, a perfect foil to volatile stocks in your portfolio

Risk Management

1. Why Risk Tolerance Is the Single Most Underrated Edge in Value Investing

2. How to Use the Kelly Criterion to Avoid Portfolio-Killing Mistakes

Value Investing

1. Free Cash Flow and the Margin of Safety: A Double Defense for Value Investors

2. Why the Carhart 4 Factor Model Still Matters (Even for Value Investors Who Ignore It) - This is a natural expansion of the Fama and French 3-Factor Model.

3. Stop Guessing: How to Use Fundamental Analysis of Stocks to Know What a Company Is Really Worth

This is all for today. Please keep an eye out on Portfolio Update coming your way soon.

Regards,

Shailesh Kumar

Astute Investor’s Calculus