The news these days is all about the Middle East. Missiles, sanctions, aircraft carriers, oil tankers. Many people's first reaction is that as long as there is a war, the financial market will pay for military expenses Unfortunately, the reality is: Every time there is a geopolitical conflict, the ones who pay for military expenses are the scattered ones Organizations are making money! That's right, war is a big boon for financial markets, especially institutions! 1、 War is here, the market always takes three steps Decades of data are stored there. The Gulf War. The Iraq War. Russia-Ukraine conflict. All in one script. Phase 1: Impact The first 7-10 days. The standard price usually drops by 5% -7%. VIX is soaring. High growth and speculative stocks were hit. Oil and gold exploded instantly. The media's 24-hour rolling creates panic. Retail investors do three things in this step: Clearing and exchanging cash Startled and motionless Chasing the rise of oil and defense stocks Almost every action is at a high point. Phase 2: Re pricing Panic cools down. The market begins to calculate: How long will oil prices last? Will inflation stick? Will the Federal Reserve dare not cut interest rates? At this point, the institution truly begins to move. Not in the center of the storm. It was after the storm. Phase Three: Wheel Movement Funds leave the injured sector. Flow towards assets that can make money in the 'new reality'. This is the moment when big money moves. 2、 History is honest After the outbreak of the conflict: About 35 days, the index returns to its starting point After 12 months, the average increase is 8% -10% One year after the Gulf War, the market rose by 18%. Three months after the Iraq War, it increased by 13%. The Russia-Ukraine conflict initially fell by 7%, reaching a new high a few months later. War creates uncertainty. Uncertainty creates a decline. Falling creates opportunities. 3、 Why are you targeting Iran this time? Iran produces 3.3 million barrels of oil per day. The market does not wait for supply to be cut off. It will be priced in advance and may be out of supply. When oil prices rise: Transportation increase Manufacturing growth Food inflation Inflation is rising → interest rates are difficult to lower → borrowing is more expensive → corporate profits are compressed. This is the logical chain of the first wave of decline. 4、 Where does the money of the institution really flow to? Focus on the key points. one ️⃣ Energy - but don't just focus on oil prices Oil is usually the strongest in the short term. But what is truly stable is: Pipeline company Storage terminal Energy infrastructure They charge 'tolls'. Not betting on the direction of oil prices. Gambling on the flow of oil. two ️⃣ National Defense - Look at Order Cycle Title stimulates stock prices. But what really makes money is a 5-10 year contract. Government spending is not a matter of three months. It is a long-term budget structure. Check the backlog of orders. Look at the ability to sustain expenses. three ️⃣ Gold - can still rise after impact Oil is prone to rise and fall. Gold is different. After six months of conflict, the historical average still managed to win. As long as: High oil prices Inflation stickiness The central bank is passive The golden environment is still there. four ️⃣ A company with pricing power This one is the most overlooked. If the cost increases, Who can pass on the price increase to customers? strong brand high gross profit No substitute This type of company is actually more stable in a high inflation environment. 5、 Which sectors will be suppressed? In a high interest rate environment: public utilities real estate Valuation is being suppressed. If the position is heavy, it needs to be reviewed again. 6、 What should I really do? Don't panic and clear the warehouse. The data has proven that—— Selling during the shock period is locking in losses. Don't chase after things that have already skyrocketed. Financial headlines are all talking about it, Usually it's already too late. The real action is: Keep core assets unchanged. Then ask yourself two things: 1) Which positions are most vulnerable in a high oil price+high interest rate environment? 2) Do I have no exposure to the sectors where institutional funds are flowing in? You're not overturning the combination. You are tilting it. Fine tune towards the direction where funds are already moving. War will not destroy the market. It will create panic. Panic can lead to wrongful killings. Wrong killing is always the favorite thing of institutions. Emotions are responsible for creating fluctuations. Discipline is responsible for making money.