WW3 Is… Bullish?

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Ballistic missiles zipping into major cities. Sabotage teams on the prowl behind enemy lines. Drones buzzing menacingly above foxholes.

Oil refineries ablaze. Ammo depots bursting into mini-mushroom clouds. Air defense systems exploding spectacularly.

The world has never seen war footage like this.

Clearly the conflicts between Israel and Iran, and Russia and Ukraine, are heating up.

But strangely, so are stock markets. Here in the U.S., we’re sitting near all-time highs. The S&P 500 is less than 2% below record territory.

The largest Israeli ETF (EIS) is up 6% as of midday. It sits just a smidge below its all-time high.

Oil is up a few bucks since the Iran vs. Israel situation has escalated, and gold and silver are looking good.

But if you had been in a coma for the last 4 years, awoke today, and the first thing you did was check your 401k, you might think the world was awash in roses and sunshine.

WW3 Expectations

Across the U.S. and Europe, more citizens believe a third world war is likely within the next 5-10 years than not.

Here in the States, 45% believe it’s likely. Only 36% believe WW3 is unlikely. 19% are on the fence.

Source: YouGov

Fear is running high. Too high, in fact. World War 3 implies nuclear exchanges, and that remains extremely unlikely.

But the fact that people are this scared – and stocks are still this high – is noteworthy.

Buying the WW3 Dip

On X (Twitter) lately, there’s been a certain sentiment which is best summed up by the post below.

Source: X

This type of sentiment is widespread.

If nothing else, it proves that buy the dip is deeply ingrained in our investment culture. So much so that people are ravenously buying a 2% dip on apocalypse fears.

If an ongoing debt crisis, multiple kinetic wars, and a huge trade war can’t stop this bull market… it could go on for a while longer.

Stay the Course

Tech stocks are rallying today, with the Nasdaq Composite up around 1.4% as of 1:20 pm EST.

However, emerging markets such as Brazil remain far more attractive. Today the largest Brazil ETF (EWZ) is up 2.4% on the day. This remains one of the cheapest stock markets in the world, and I will continue to add to my position on dips.

Gold and silver bullion remain strong and are consolidating just below their 52-week highs. Brand new highs are on the menu. It’s just a matter of time. Silver, naturally, remains a favorite here.

Precious metal miners have been on an absolute tear over the past few weeks, and with all the chaos in the world, PMs and miners remain excellent places to hide out.

Sure, broad U.S. markets may go higher over the next few months. But precious metals and select emerging markets should too, and they have a lot less downside risk.

My advice: don’t get pulled into overpriced stocks just because they’re ripping higher. There are plenty of assets out there with bullish charts AND real fundamental value in today’s world.

The S&P 500 and Nasdaq, at these prices, and with these risks, are not among them.

Good investing,

Adam Sharp
[email protected].

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