Stagflation, War, No AGI
The idea
I'm betting on three things going wrong at once: the US-Iran war widening, inflation staying stubborn, and AI falling short of the hype. The portfolio splits roughly evenly across oil producers, a tanker owner and defense names for the war leg, gold and commodity producers for inflation, and software and consulting firms beaten down on AI fears for the third leg. No single stock gets a huge weight, and I keep a small cash buffer to add if prices pull back. If AI genuinely starts replacing the work these software and consulting companies do, that's my signal to rethink the whole thing.
What will be bought
- These companies were sold off amid fears that artificial intelligence would replace their services, so their stocks could recover if AI capabilities fall short of expectations. · SalesforceIt charges per user seat, and if AI agents fall short of expectations, companies will continue to need those human user licenses., AdobeIt has declined sharply on fears that AI image and video tools will displace its software, so it could recover if AI capabilities disappoint., AccentureIt fell on concerns that AI would replace consultants, but if AGI never materializes, companies will still need people to manage their technology., GartnerIt sells research and analysis to corporations, and if AI chatbots fail to match human expertise, companies will continue paying for its subscriptions.31%
- Gold tends to hold its value when inflation erodes purchasing power, making it a hedge against a period of sustained high prices. · SPDR Gold SharesIt tracks the gold price directly, providing a straightforward way to benefit if inflation remains elevated and erodes the dollar's buying power., NewmontAs the largest gold miner, its profits grow faster than the gold price itself, amplifying gains during an inflation-driven rise in the commodity., Agnico Eagle MinesIt operates low-cost gold mines, allowing it to remain profitable even as its own operating expenses rise alongside inflation., Wheaton Precious MetalsIt receives a fixed-price cut from other miners' gold and silver production, so rising precious metal prices flow almost entirely to its profits.21%
- Escalating regional conflict drives demand for missiles, jets, ammunition and other weapons systems, as well as replacement of stockpiles that have been depleted. · RTXIt makes missile defense systems that get depleted when drones and missiles are fired, requiring continuous replacement as conflict escalates., Northrop GrummanIt manufactures munitions and bombers that see heavy use during escalating conflict, with depleted stockpiles requiring expensive replacement orders., Lockheed MartinIt builds missiles and fighter jets that get consumed and reordered as Middle East tensions worsen and defense spending increases., L3Harris TechnologiesIt supplies rocket motors and military communications gear, components that nearly all weapons systems need during sustained conflict and munitions ramping.16%
- Wider Middle East conflict constrains oil supply, lifting prices for US producers, while shipping route disruptions raise the rates that tanker owners can charge. · ConocoPhillipsIt pumps crude oil with minimal refining operations, so its profits track the oil price very closely, benefiting directly if conflict keeps Brent elevated., ChevronIt is the second major US oil producer, providing exposure to elevated crude prices if conflict keeps supply constrained in the region., Exxon MobilIt pumps and refines crude, earning more per barrel when war risk keeps oil prices high and supply remains tight., FrontlineIt operates oil tankers, and when conflict forces ships onto longer and riskier routes, the daily rates it can charge increase substantially.15%
- Copper and fertilizer producers own physical commodities whose prices tend to rise alongside inflation, especially when supply chains face disruption. · Freeport-McMoRanIt mines copper and gold, two commodities that tend to hold value and rise in price during inflationary periods., NutrienIt produces fertilizer, and crop input prices tend to climb during inflationary periods, especially when war disrupts energy and supply chains.10%
- Cash8%