Markets React to Conflict in Iran

0:00Well, everybody looks at their, if they're lucky enough to have a Kio, do we still have Kio's IRAs, whatever, whatever investment plans you have, retirement planning that we all should do. You know, if we all knew what we know today, we'd all be rich by now, but we didn't know about putting $25 away every week in a Roth IRA, or 50 bucks a week when we were kids. Moan lawns are doing whatever we were doing, and we'd have millions of tax-free dollars today. Hopefully this generation knows that, and no one's going to screw that up. David Saurby's managing director, portfolio manager of Ancora, Bloomfield Hills, and obviously the markets are reacting to the conflict in Iran. The David always a pleasure, a global market sell-off intensified today. Iran is expanding its retaliatory attacks while they can around the Persian Gulf region. What are you doing? How are you keeping yours and your clients,

1:04like me, their powder dry? Discipline. It's one word, Paul. You woke up yesterday morning, futures were down, the market ended up flat for the day. You woke up this morning, the market was off more, and early trading, it's still down, but it's down roughly one percent. We're not out of this yet. That's very important for investors to know, and nobody knows when it's ever going to end. But the rule of thumb is, we get these 5% hiccups in the market between two and three times a year. We get 10% corrections on average once a year. Is this it? Perhaps, but ideally, you've got to stay disciplined, and then think about if the market is down 10% or more, you don't sell, but you get your shopping list out, and you think about, what can I buy? That's cheaper today, more on sale than it was a couple of weeks ago,

2:09and that's usually the best rule of advice when we've got this uncertainty, and markets have no appetite for uncertainty. Well, I agree with you, not 100%, but 1,000%. I haven't said that lately, but now the president uses percentages that don't exist, so I can too. And the fact is, prolonged conflict, combination of higher energy costs, disrupted logistics, a generalized confidence shock, which is constituting a meaningful drag on global trade volumes, that precisely the moment the world economy was still digesting the inflationary and growth consequences of the tariff shock. And it's concerning to me that as the president has talked about us being stronger than ever, and getting along with all these other countries, some of these countries are acting like they don't really get along with this right now, which is something we have to deal with. But I do believe there's a tremendous buying opportunity ahead of us, but you said it best, David Saurby, managing director and portfolio manager,

3:11and then Korra Blumfield Hills, we don't know when that is. We don't. The rule of thumb is we're seeing the playbook, Evol, oil stocks up, oil prices are now up, 30% this year, travel stocks, and particularly the cruise lines the last couple of days are weaker. But take a step back and look at all the travails that have existed when Russia invaded Ukraine four years ago. The stock market is still up 60%, 60% since that horrific invasion of Ukraine. That's about a 12% compounded annualized return, which just I think speaks well to the ability of U.S. companies to generate profits, sales, and cash flow, return it to the shareholder with higher stock prices. That's just one example of markets have a way of fighting through this near-term adversity.

4:16And that really is I think the rule of thumb is we think about all these challenges in Iran and the Middle East. I just want to remind our listeners too that while the mainstream media pretty much ignored gas prices dropping significantly as they did, but they ignored it. In other presidencies that used to be a very big deal. Trust me when I tell you as the prices at the pump go up as they will, that will be a big story. So think about this, they didn't make a big deal out of the prices going down, but boy are they going to make a big deal out of the prices going up. Just as an observer. They do. They did in 2000 in the Gulf War in 1990. They did in when we had the attacks or the Iraq, they focus on oil companies gouging. Oil companies are not excessively profitable. They're certainly some very good ones to own.

5:16It's just supply and demand. David Saurby, the steady hand and disciplined hand of David Saurby, managing director and portfolio manager at Ankara, Bloomfield Hills. Thank you, David. Thank you, Paul. Thanks for having me on with your listeners. Always a pleasure, sir, and thanks for helping all of us. Coming up next, Marie Osborne, who has a special show tonight, a special edition of Spotlight, tonight at 8 p.m. focusing on Iran. She's going to be here talking about something she's been studying for 25 plus years, conditions inside women's prisons. Marie Osborne up next here on WJR, it's 129.