mofo said:
What's the best way to prepare for all this shit that will probably go down?
YoungGunner said:
mofo said:
What's the best way to prepare for all this shit that will probably go down?
Probably investments in non-Iranian oil
P Dog said:
YoungGunner said:
mofo said:
What's the best way to prepare for all this shit that will probably go down?
Probably investments in non-Iranian oil
And U.S military contractors. Basically the whole "military industrial complex".
For those convinced we are going to war with Iran (as I stated before, I do not believe there will be war), oil is indeed the obvious play. The easiest way to invest in oil is to purchase an oil exchange-traded-fund (ETF) which derives its value from the spot price of oil on the NYMEX or LME. West Texas Intermediate (WMI) is the benchmark on the NYMEX, Brend Crude is the benchmark on the LME. Currently there is a spread between the two prices in favor of Brent which is historically unusual, and an attack on Iran would probably benefit Brent prices more simply because Europe is more dependent on oil from the Near East than the USA is (given our own high and rising oil production along with imports from Canada, Mexico, and Venezuela). Most oil ETFs however hold several different kinds of crude.
The most liquid ETF is the United States Oil Fund, which is traded on the NYSE with the ticker symbol USO. It's not a perfect tracker of oil prices, but it's pretty good.
For those of you who REALLY believe in war, consider a leveraged ETF. The ETF ProShares UltraShort DJ-AIG Crude Oil (NYSE ticker: SCO) has 2x leverage and is pretty liquid. If the oil price goes up by a dollar, you make two dollars. The downside is that you can lose a lot more money if the price drops.
Another investment that always tends to benefit from war and oil inflation is gold. There are plenty of gold ETFs out there, and it's easy to purchase physical gold (and that way you can't lose your gold from a fund going up in smoke). I buy mine from Kitco, a Canadian outfit with great service and low prices. Gold mining stocks are seriously undervalued now, but I suspect they will continue to be undervalued. ETFs have killed the market for gold mining stocks, that or investment banks and hedge funds are rigging the market so they can end up owning most of the world's gold producers. Sooner or later I suspect some private equity group will make a play on one of the larger producers like Newmont or Barrick.
Defense stocks obviously tend to benefit from war. Since a war with Iran would likely be mostly aerial, good plays would be Boeing (produces the Massive Ordnance Penetrator for instance) and Raytheon (world's largest missile manufacturer). We're unlikely to invade and rebuild Iran, don't bother with construction plays like Halliburton or Chicago Bridge & Iron.
One possible play would be to short shipping lines with heavy exposure to crude shipping in the Persian Gulf. Shipping insurance doesn't cover war and major insurers like Lloyd's will stop insuring tankers in that region in the event of war. Iran poses a credible threat oil shipments from the Gulf given that the Straits are so narrow, and narrower still are the portions of the Straits deep enough to accommodate the largest tankers. The Gulf Arabs have been preparing for this and there now exists a major highway past the Straits to ports in the Gulf of Oman, so oil shipments would not stop entirely even if Iran were to sink a CVBG.
Mitsui OSK Lines I believe is the world's biggest tanker line (if not it's definitely in the top five) and a major shipper of Iranian oil. They're traded on the Tokyo Stock Exchange under the symbol 9104.
EDIT: Be warned that since none of you guys are Japanese, this carries exchange rate risk. The Japanese Yen has been the world's best performing major currency for a long time (even more so than the Swiss Franc).