Petri Redelinghuys of Herenya Capital Advisors on the market’s unpredictability, and our future plans for the end of the conflict in the Middle East.
Weekend Talks And Weekday Trends
There has been a consistent pattern of unpredictability since the start of the war, with narratives over the weekend signaling an impending end to hostilities, either by way of decisive action or de-escalation, only for the events of the week to go completely against said narrative. This creates an environment where it’s increasingly risky to exit a defensive posture, as even expert traders find it more difficult to predict the market’s trajectory. We believe it’s best to play it safe; take hedging positions and options structures until the conflict reaches its conclusion, and make the long game more viable again.
End Of The Conflict
It’s important to have a plan for the eventual end of the conflict. We intend to short oil when the strait opens, and invest in gold and equities in a number of different sectors, such as software, energy, and bio-tech. To that end, we recommend cutting positions that aren’t doing well, as it’s crucial to have cash ready on hand to invest when the conflict ends and a sustainable peace is achieved. It’s worth noting that it’s difficult to catch a turning point at the very beginning, and the safest bet it is to wait until the market is on the rise again.
As President Trump noted in his speech last week, wars can be lengthy, and they have historically gone on for longer than anticipated by any side, -look to the war in Ukraine- and it pays to play it safe, and wait until the Strait of Hormuz is fully open, with American vessels free to navigate through it, before we conclude that peace has been achieved.
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