๐๐ค๐ง๐ฉ๐๐ค๐ก๐๐ค ๐๐ฅ๐๐๐ฉ๐ โ March 2026: War Edition
Dear All,
This month, I'm taking a different approach. Rather than the usual performance review, I want to focus on how we're positioned for the ongoing conflict between Iran, the USA, and Israelโand what it means for the portfolio.
๐ ๐๐๐ง๐ ๐๐ฉ ๐๐๐๐๐ก๐๐๐๐ฉ๐จ
The Geopolitical Landscape
The Trump administration is pushing hard for a resolution, but the path to peace remains blocked. Israel shows no signs of a ceasefire, and Iran's conditions remain firm. Markets appear to be pricing in a quick resolutionโbut we cannot ignore the possibility of a territorial invasion, which could extend this conflict for months.
Scenario Analysis
In a prolonged war scenario with boots on the ground and oil at $150, I could see the S&P 500 trading down to 6,000โimplying another 10% correction from here.
On the upside, the operation has eliminated a significant layer of Iranian leadership. While I'm no military expert, the Iranian population has recently shown support for democratic reform, suggesting the radical elements lack broad popular backing. A peace agreement remains possible, and if reached, markets could rally sharply.
The Oil Picture
The global economy continues to operate in expansion mode. Yes, elevated oil prices pose a riskโbut context matters. Oil at $100 (where it sat in 2007, nearly two decades ago) doesn't break the system. It's $200โ$250 oil that would have severe implications. At current levels, oil remains manageable, which provides some comfort.
๐ ๐๐ค๐ง๐ฉ๐๐ค๐ก๐๐ค ๐ผ๐๐๐ช๐จ๐ฉ๐ข๐๐ฃ๐ฉ๐จ
Cash Position: 10%
We've deployed capital from our previous 25% cash position to establish war-related hedges over the past three weeks.
Energy Exposure: 13%
Increased allocation to natural gas names ($APA, $EQT (EQT Corp)) and $FANG (Diamondback Energy Inc) to benefit from supply disruptions.
Dollar Exposure: Short EUR
The dollar should appreciate as oil and geopolitical tensions rises, also given that global energy trades settle in USD. Net energy importersโparticularly the Eurozone and UKโface the steepest currency devaluation risk.
Hedges: 14%
Multiple strategies in place:
โข Volatility: Direct exposure via VXX and SPX puts
โข Agricultural Commodities: New positions in CORN, SUGAR, WHEAT and COTTON
The agricultural thesis deserves explanation:
โข ~1/3 of global urea exports transit the Strait of Hormuz (urea is essential for nitrogen fertilizers)
โข ~45% of global sulphur exports pass through the same chokepoint (critical for phosphate fertilizers and ammonia)
โข Soft commodities are trading at distressed levels after a prolonged bear market
โข Farmers globally are already strugglingโhigher fertilizer and diesel costs could reduce yields and planted acreage
โข Lower supply + higher input costs = higher soft commodity prices
Direct Shorts:
Targeted positions in WMT, PLTR, and EA (the latter due to a private equity deal at risk of being called off).
๐ฎ ๐๐ค๐ค๐ ๐๐ฃ๐ ๐ผ๐๐๐๐
The honest answer: no one knows how this war will unfold. The US administration has maneuvered itself into a position where resolution requires cooperation from parties with competing interests.
What I'm Watching
I'd need to see VIX/VXX trading around $50 to call genuine panic. We're not there yetโand we may never get there if markets grind lower without a capitulation event.
My Stance
I'm not going fully short. I've been burned before, and it's not worth itโany positive headline could send this market ripping higher without hesitation.
Despite the cautious tone of this update, I remain cautiously optimistic. I believe moderate Iranian forces will eventually seek to rise to power with popular support, using this moment to negotiate with US politicians who plainly want the conflict to end.
Stay sharp, stay hedged, and stay patient.
Life portfolio analysis (themes, performance by theme, recent positions, etc): https://e-toro-marketplace-nintingale-50761e6a.base44.app
pdf version: drive.google.com/file/d/1UyxfITqHUdomDongc5TU8leFUmFsvrwn/view?usp=sharing... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
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Sat Sep 05 2026 15:20:03 GMT+0000 (Coordinated Universal Time)
