Marko Grecs @emge2116: "🔷 𝙋𝙊𝙍𝙏𝙁𝙊𝙇𝙄𝙊 𝙍𝙀𝙋𝙊𝙎𝙄𝙏𝙄𝙊𝙉𝙄𝙉𝙂 🔷 I think..."

Slovenia

🔷 𝙋𝙊𝙍𝙏𝙁𝙊𝙇𝙄𝙊 𝙍𝙀𝙋𝙊𝙎𝙄𝙏𝙄𝙊𝙉𝙄𝙉𝙂 🔷 I think it is clear to everyone what is currently unfolding in the Middle East, so I will not spend much time recapping the situation itself. In my view, the war and the resulting oil shortages are likely to drag on for quite a while, and even if everything were to stop now, it would still leave a lasting scar on the global economy. The real consequences will depend heavily on the length and depth of the conflict, but some form of stagflation globally already seems inevitable. With that in mind, I have recently made several portfolio changes, focusing on both a stagflation scenario and a long-term investment horizon. 〰 Sale of all $IS04.DE (iShares USD Treasury Bond 20+yr UCITS ETF) (Treasury Bonds 20+yr ETF) This investment was originally based on the view that Fed rates would decline as inflation came under control and U.S. economic indicators weakened. However, the environment has shifted, and U.S. monetary policy now looks likely to remain tight for longer due to persistent inflationary pressures, with Fed funds rates expected to stay unchanged until mid 2027. With that in mind, I decided to redeploy the capital and go on a bit of a shopping spree: 〰 $IBZL.L (iShares MSCI Brazil UCITS ETF (Dist)) I slightly increased exposure to a Brazil ETF. I already had a meaningful portion of the portfolio allocated to Brazil, but given the current situation, I decided to increase it further. Brazil’s economy is heavily tied to commodity exports, and higher commodity prices should support revenues if the conflict continues. That said, the picture is not uniform across all commodities, and the longer-term outlook still depends significantly on the upcoming presidential elections this October, which I touched on in a post about a month ago. 〰 $CCJ (Cameco Corp) It is essentially a leveraged uranium play, and anyone who has followed me for a while knows I am a long-term believer in the uranium sector. In this environment, I used the opportunity to further increase my position in Cameco alongside $CEG. Despite my long-term view on Cameco’s prospects, it could also benefit from tighter global energy supply. That said, the uranium market is highly volatile and can respond unpredictably to supply-demand imbalances. 〰 $CPRT (Copart Inc) Increased my position as a form of protection in a stagflationary environment. Copart tends to benefit from higher repair costs, which lead to more vehicles being written off and funneled through its auction platform, making the business relatively resilient during periods of economic stress. At the same time, the long-term outlook remains very attractive. 〰 $HLMA.L (Halma PLC) This one isn’t a direct play on the Middle East situation, but I’ve long had my eye on Halma as a high-quality, long-term winner. The company’s strong pricing power and resilient business model provide a natural hedge against inflation, which makes it attractive in the current environment while remaining a solid pick for the long run. 〰 $COST (Costco Wholesale Corp) Costco offers extreme pricing power through its membership model, making it one of the best defensive plays in a stagflationary environment. Upside in good times is more limited, so once conditions improve, I may consider reallocating to higher-growth opportunities. For now, however, I view stability and predictable margins as more important, since calm times do not appear to be on the horizon. 〰 $IUSS.DE (iShares MSCI Saudi Arabia Capped UCITS ETF) This one is a bit more complex. Saudi Arabia is geographically close to the conflict and indirectly involved, and its oil exports face some restrictions due to the Strait of Hormuz blockade. However, the country remains a major oil producer with a limited but feasible alternative export route via the East-West pipeline, meaning it could benefit from supply shortages and higher oil prices. Even before this conflict, Saudi Arabia was considered a promising emerging market, so from a long-term perspective, when the geopolitical tensions have eased, I believe investment in the country remains solid. 〰 $AON (Aon plc) Aon is another stock I like as a long-term investment, and I already had about 1% of my portfolio in it since February. With the war escalating and a high probability of stagflation ahead, it made sense to increase my position. As a global insurance broker, Aon can benefit in inflationary environments because rising premiums translate into higher fees. On top of that, looking at the long-term chart, I could not imagine a better entry point. 〰 $LIN (Linde PLC) Linde has several advantages in a stagflationary environment. It operates with long-term contracts and has significant ability to raise product prices when input costs increase, providing strong protection against inflation. While the company could be affected by industrial slowdowns, it remains an attractive long-term holding thanks to its extremely high ROIC and a growth profile that is largely resilient to economic cycles.

Not investment advice. The author may have financial interests in the mentioned instruments.