Good Monday morning. We start a new week in the REGJB, with trials set, and the State announcing "victim wants max."
However international events are intruding on everyone's thoughts. So let's dive in.
Oil. There is plenty of oil in the world that has been delivered or is being delivered and is out of the Mid East. Oil companies however use any excuse to raise prices. Today we will see prices rise to the mid 70's a barrel, and we could see 100 a barrel in the future. But most of that will be a non-supply/demand response, with news driving the price.
Iran. Iran has suffered under a religious theocracy for nearly fifty years. Women are beaten, degraded, and imprisoned for not following rules designed to make them second class citizens; intellectuals are scorned and prosecuted (and this doesn't just occur in Muslim religious theocracies, as the battle in Texas and Alabama to force the display of biblical quotes in public places continues unabated), and minorities like the LGBTQ community are persecuted and murdered. In recent months the Ayatollahs have ordered the wholesale murder of people protesting their regimes. The Iranian people, who have a long history of a brilliant and vibrant culture have suffered too long. The religious/criminal leaders need to go. While they led chants of death to America and death to Israel, they are facing their own elimination, and rightfully so.
Financial Markets. We went to 60% cash last week, buying short ETFs QID and SQQQ which are up nicely this morning. But the horse is out of the barn on those, so do not buy them today. As you consider your portfolio remember Warren Buffet's first rule of investing- when people panic, be greedy, and when people are greedy, panic.
If you have assets to deploy, here are our thoughts. Historically, markets have fallen about 1.1% on the first trading day of an international event similar to this one, and 4.4% over the two weeks following the event, and risen well over 10% in the two months following the end of the incident. We can expect those trends to continue. So today is not the day to buy, nor panic sell. There are issues unique to this event, as each event has unique possibilities. Here, the closing of the Straits of Hormuz for a longer period of time could inflict short term damage to world economies. China is the wildcard here as they purchase about 80% of Iranian energy products that Iran exports. China's response is at this time not discernable. It would be extremely unlikely for China to provide military support to Iran. Rather, we expect them to watch the situation closely and quickly re-establish ties with whomever ends up leading Iran in the coming months.
Any short-term Iranian military success will also cause a sharp drop in US equities. By that we mean the damage or sinking of a US naval vessel, or a more successful missile strike against US forces in the region than we have seen up to now. More likely is that Iran will continue to target soft civilian targets of their neighbors, like they have recently done in attacking Dubai's airport (our all-time favourite airport).
Many stocks will be attractive in the coming days, including the ETFs XLK, VOO and VOOG.
We, of course love NVDA below 180, META below 650, APPL below 270, AVGO (Broadcom, which reports this week) below 350 (it's around 320 now. Because it reports this week, this will be our first buy, either late today or tomorrow), and TESLA below 400.
TESLA is the most intriguing company. If you have been listening to Elon carefully, as we have, TESLA is transitioning from a car company to a robotics company where the market to sell or lease a personal robot is literally in the billions. If you're a 30ish ASA/PD/Young lawyer, we would advise to start picking up a few shares every month, as well as buying an ETF with a large exposure to TESLA. If you're older, there is still a near-term horizon which could pay off nicely, as many analysts view 2028-2030 as the time frame when robotic sales will begin to show up in the company's financial reports. TESLA at 400 could be akin to NVDA at 50, or AMZN at 20.
While it takes a significant amount of time, attention, and financial sophistication (like the ability to quicky read and comprehend a company's annual report or the 10K) to safely pick individual stocks (eliminating most of our robed readers) picking a good ETF with a great track record is a safer and easier way to make a smart investment. XLK, a tech ETF, has been our best performing ETF since 2020. Always keep an eye on the expense ratio. A price below .5 is a must. A good ratio is < .25% for a stock ETF and < .10% for a bond ETF.
Final thoughts. Regime change is hard. See, Iraq, 2000-2015. But sometimes it is needed. See Germany and Japan, 1930-1945. The leaders of Iran need to go. The Iranian people have waited too long for the world to step up to the plight.
26 comments:
Trump deserves credit - you’re almost there. Just say it.
Rumpole. I totally agree on TESLA.
But how about defense companies needing to build more missiles and fighter jets … Northrupt Grumman, Raytheon etc?
What happens to the hyperscalers? Do they continue spending $200 billion plus building out data centers forever?
Will shareholders tolerate decreased profits as they spend huge sums without knowing what the financial benefits of AI will ultimately be?
If they decrease spending, won’t that hurt NVIDIA and BROADCOM at some point?
What is the end game on AI?
Which companies will potentially fail? Software? Cybersecurity? Chipmakers? Auto manufacturers?
Banks?
Will the U.S. government enter the block chain world and make the dollar irrelevant by creating a universal token used to be able to purchase goods on the internet and AI inquiries?
Don’t you fear for the unknown future with doctors, lawyers, taxi drivers, architects, truckers, factory workers etc losing their jobs?
Will we all receive universal basic income from our federal government as they just print more money to respond to 50% unemployment?
Will Trump in the next three years CONTROL the world by ruling over most countries and their resources such as rare earth and oil in order to make America the leading country?
Please RUMPOLE. Help us deal with the future. Write several posts in a series to guide your loyal followers.
We need you know more that ever.
Color me skeptical when someone purports to go to 60% in their personal cash positions that this is someone who should be posting any form of financial advice. Just the tax bill on the gains (and if there aren't any, all the more reason the advice is dubious) would mean you need to come up with some out-of-this-world great investments. Please don't tell me you are investing strictly in tax protected accounts -- that means we are getting tax advice from a minnow.
Trump is great to demo work (Exhibit A: White House. Exhibit B: the DOJ). Building something back that will endure--not so much. That requires sustained concentration and attention, something he seems a bit short on (whether dementia or something else I could not say).
Let’s hear from Rumpole on the earlier comment.
Well which situation does this more closely resemble, Iraq or WW2? Nobody is saying the ayatollah was good, but regime change that will help the Iranian people or anyone else will not occur from this. In contrast many Iranians will be killed and wounded, many of the survivors will be radicalized and incentivized to harm Americans and Israelis, and the government will still be theocratic and repressive. Any different outcome would require an entirely different U.S. president and government than we have. We failed at this with more competent leaders (not that that is saying much) in Iraq and Afghanistan.
Wait until Iran or its proxies attacks an American soft target. Americans will realize what we’ve really done then. Since we can’t explain why we’re doing it now, we certainly won’t be able to then.
Release the binder!
I don’t love defense stocks. Never did. Never will. Except for Palantir. Been accumulating that for 18 months now. Anything associated with AI is in general a buy. Chips. Energy. Data centers. And I’m loving Broadcom this week.
Do you like TESLA Rumpole?
I call on the FACDL to release the binder of SAO complaints. The people of Miami-Dade are entitled.
Regime change is not our job. Now, all over the world, there is too much war and too much strife for poor people. This idiot president has started two wars without the consent of congress. If this is no impeachable, what is? Putin can now say, hey, Trump does it so why can't I. When Putin attacks Poland and Estonia, then what? General Patton was right, wipe out the Russians and fix the mess before it started.
Robed reader spotted
Boomer who spent the last ten years calling people who don't think men can become women fascists is calling for full scale invasion for Americans to fight and die for Israel. Can't make this up. I know i'm just a dumb Goyim but my enemies are in the Epstein files, not Iran.
Pahlavi was no Prince Charming.
The Epstein files are not in Iran.
They sure are.
That you have the gall to insinuate that a US/Israel unilateral assault on Iran is like waging war against Imperial Japan and Nazi Germany shows how senile and old you actually are. This is a brazen war of aggression against a non-threat. But, like any good Zionist, you cheer with glee when Israel murders and forces America to do the same. Because Israel's problems, to you, should be ours. And amidst all this violence and death that you adore, here you are making market calls, in true, selfish, Baby Boomer fashion.
To be fair Rumpole had a very early good take on Gaza. He is not reflexively pro-Israel like some. But on this, yeah, we bombed a girls school and killed many children. Were they the enemy? Well their families are certainly going to hate us now. We're destroying a country without even a pretense of how to rebuild it. We're creating utter chaos in an entire region, with no idea what will come of it and apparently no care. Killing the ayatollah (who would have died soon anyway) is meaningless in the face of that.
Look - war is awful. A tremendous waste of life. There are two different dynamics here. Iran is easy. It’s a country dominated by religious theocrats who abuse the citizens of the country. Replace the regime with a democracy and the problem is solved. Israel and Palestine is different and more difficult. These people must learn to live together. All that violence does there is continue the circle of attacks and reprisals. Think of this. Take an Israeli baby and a Palestine baby and raise them as brothers in the US with no political indoctrination. Do you think they would get along? Of course they would. The hatred that exists is because of the constant repetition of historical wrongs which can and will never be righted. So put it behind and save the next generation of children and let them live the peaceful life g-d wants for all creations on this earth. If you’re religious then remember the bible says we are all created in the image of g-d. That includes Jews and Arabs and everyone else.
Oh just replace the theocracy with a democracy. Easy peasy. Also explicitly what the US has disavowed any interest in doing, no nation building, just blow shit up. But maybe if we blow enough shit up a US-friendly democracy will arise, that's how it works right? BTW Iran had a democracy once in the early 50s, then the CIA coup'd the democratically elected leader in favor of the shah.
ordinarily respectful reader here. but this has got to be the stupidest sentence I've read in years, except for those of Trump: "Replace the regime with a democracy and the problem is solved." Sounds like a tweaking teen.
He was a playboy
Oh, look at this keyboard warrior, frothing with faux outrage while hiding behind anonymous bile. You equate defending against Iranian proxies—who've attacked US forces and funded terror—to cheering murder? That's not senility; that's your historical illiteracy on display. Israel isn't dragging America; it's the mullahs in Tehran exporting chaos, arming Hamas, Hezbollah, and Houthis to kill innocents. Non-threat? Tell that to the families of bombed embassies or sailors targeted in the Red Sea. As for "Zionist" slurs and Boomer jabs, they're just lazy ad hominems from someone too cowardly to debate facts. Keep seething; the world moves on without your virtue-signaling drivel.And speaking of Boomers, they revolutionized society, dismantling entrenched racism through the Civil Rights Movement, marching with MLK to shatter segregation and Jim Crow laws. They championed gay rights, igniting Stonewall and pushing for equality amid brutal homophobia. Women's liberation? Boomers fueled feminism, breaking glass ceilings and securing reproductive rights. They protested Vietnam, exposing war's horrors, fostering peace activism. Environmentalism boomed under their watch, birthing Earth Day and clean air acts. From counterculture to tech innovation, Boomers transformed a bigoted, war-torn world into one of progress and inclusion—legacies you conveniently ignore while whining from your echo chamber.
The comment's sarcasm oversimplifies history and policy. Iran's 1950s under Mossadegh was a fragile constitutional monarchy, not a pure democracy; he dissolved parliament and assumed emergency powers, alienating allies before the CIA-MI6 coup—driven by oil interests and Cold War fears, not anti-democracy sentiment. The U.S. hasn't fully disavowed nation-building; current Iran strikes combine targeted bombings, sanctions, and dissident support to weaken the regime and foster internal change, echoing "maximum pressure" strategies. Interventions can yield democracies: Grenada (1983), Panama (1989), and Balkans (1990s) transitioned post-U.S./NATO actions. A RAND study shows 63% success in U.S. interventions with planning and aid. Failures like Iraq stem from poor execution, not inherent flaws.
Targeted bombings? We double tapped a children’s school. We don’t have people on inside of the fighting forces which are IRGC. They are equipped for the kind of war they have to fight against US and Israel. The Iranian people see us as invaders and war criminals, correctly. Whatever grievances they have with their government are far overshadowed by their need to fight ours until we stop killing them and destroying their country. Regime change has never been accomplished by bombing. Trump and Hegseth are the least competent ever at their positions. Iran has a Revolutionary Guard and satellites for exactly this purpose. They are not Grenada or Panama nor were those accomplished by bombing, particularly civilian targets. We are not going to “win” this conflict. We don’t even have a plan to reopen the Strait of Hormuz. That as well as Iran destroying regional infrastructure will cripple US economically quickly, and we are already doing badly. A truly insane war even by recent U.S. standards. There’s a reason many presidents have wanted to do this and haven’t, any expert or even person with intelligence knows it will end badly.
Wrong…”tweaking teens” like socialism these days.
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