After the Shock: Modeling a Longer War

In “investor years,” which fall somewhere between human and dog years, 2026 has already felt like three full years. And it’s only March.

Up to this point, my work around the Iranian conflict has centered on near-term price action: the early dollar firming, oil refusing to get sold before missiles flew, and capital stubbornly flowing back to the megacap.

My positioning, accordingly, has been more tactical than portfolio-wide.

But as this war moves into its third week, it has become clear that a deeper framework is needed to understand what prolonged conflict is likely to do to asset prices from here.

To answer that, I built a cross-asset regime study from the ground up.

For this note, I merged more than 70 market series with a hand-built timeline of major wars, escalations, and market stress periods, along with U.S. defense spending, CPI, breakevens (market-implied inflation), credit spreads, and long-run industry data.

I then scored each month in history against today’s regime using oil, real yields (Treasury yields after inflation), credit conditions, and leadership beneath the surface of the market. The closest historical matches became the comparison set for this study.

The study touches almost everything: equities, hedges, gold, rate exposure, AI and semis, and the places you still assume are safe.

I believe this is one of the most valuable pieces of work I can give you right now if you are trying to understand this market honestly and find the best path forward.