Investors Get War All Wrong
Acts of Violence and War are the worst humanity has to offer.
Yet, war seems to be ingrained in our long history as humans as much as markets and trade are. If you can find ancient writing, there is probably a reference to a war or battle.
Western culture is founded, in many ways, on Roman Culture. Rome changed A LOT over its 1000 years of existence.
You know what didn’t?
LOTS AND LOTS OF KILLING.
If the Romans were not killing others, they were killing each other.
For those of you that think war is a part of ‘modern civilization’, in 2016 Archaeologists found a human genocide that is at least 10,000 years old…
…Predating the Alphabet!!!!!
That’s right, we figured out how to kill each other thousands of years before there was a Beta and a Vega.
This might be the reason the market’s reaction to acts of war tends to be so muted. Generally speaking, when there is war, markets tend to have some volatility at the onset of fighting.
After fighting is proven to be non-nuclear, markets tend to rally. Why? Because War is the Worst Humanity has to offer.
It also happens to be extremely profitable to wide sections of the world economy. If you want to see crazy returns just take a look at commodity stocks, defense stocks, manufacturing, and energy stocks as they all do really well, historically.
Now that tech has become a big section of the economy, I have a hard time imagining the tech sector not doing EXTREMELY well in the middle of a war as well.
Thus, while it currently appears as if the trading of shots is more likely to die down than it is to increase, in my Double Your Money In 2020 Live Event, I go into exactly how to handle it in your portfolio
In fact there is something specifically that options do once markets figure out this one thing.
With the VIX at 15, you are likely to see an 11 VIX as much as you are a 20 VIX.
There is the phrase ‘cool under fire’… the VIX tends to actually cool under fire.
War is hell, it is the worst humanity has to offer. Maybe that’s why there is so much money to be made on it.
Did I mention commerce predates the alphabet….
Your Only Option,
PS – Our thoughts and prayers are with our soldiers at this tense time where cool heads must prevail. I don’t mind being brash and saying that I will make money in markets in order to spend that money in our economic system that supports our brave men and women down range.