Latest / Money Grows on Trees / #320 - The US Iran War Will Make SMART Investors Insanely Rich

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#320 - The US Iran War Will Make SMART Investors Insanely Rich · Money Grows on Trees

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  Nearly every time there's a war, people sell. They get scared, they turn on the news,
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  and they make the worst financial decision of their lives. But
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  here's what the smart investors do instead. They quietly position for
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  profit. The US and Iran, they're at war right now.
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  And whilst most people are panicking, the investors who
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  understand history know that fear creates the greatest buying
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  opportunities of a lifetime. My name is Lloyd Ross, multiple seven figure investor,
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  entrepreneur, and I've helped thousands of everyday Australians and people around the world get
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  out of debt and build real wealth. And in this video, I'm
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  going to show you exactly which assets perform when
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  the geopolitical fears are at peak and
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  how to position your portfolio to come ahead when the dust settles.
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  So, it's a little bit of a follow-on episode from
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  when I did an episode on how I'm positioning my
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  portfolio for recession. So, if you go back a couple of
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  months, there is an episode I did called, How I Position
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  My Portfolio for Recession. And the reality is, it
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  was an Iran War portfolio. Now, did I know the Iran War
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  was going to erupt like it has? Absolutely not. But what I did know
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  was that there was change coming. I
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  knew that rates weren't going to stay low forever in
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  our country in Australia. I knew that Oil
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  was underpriced at $59 a barrel because I
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  read the history of oil prices and so forth, and did research, and I understood that
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  $59 a barrel is really cheap. And so I know that the cure for cheap oil
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  prices is cheap oil prices. So I knew it was only a matter of time before
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  oil was going to explode up. Now, I didn't know that it was going to be exacerbated
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  and faster from an Iran war, but I knew. And I
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  knew that when it was going to go higher, that trucking was going to become more expensive, and
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  railroads were going to become higher value. And
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  I also knew where Warren Buffett was positioned, because I watch his
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  portfolio every single quarter, and other investors too. So
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  I watch for signals in the marketplace, where are they positioning their money, why would they do
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  that, etc, etc. And I talked about positioning in healthcare. So
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  if you watch that episode, what's really interesting is, it
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  was a perfect portfolio for Iran war. Because when war
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  happens, as we saw in the Ukraine war, when
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  it kicked off in 2022, you saw a huge spike in
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  oil. If oil was already low, and the companies were
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  already going to do well, why wouldn't I position my portfolio there? Because
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  it's a win-win outcome. I win if they don't go to war, and we win
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  even more if they do. So it's not that I could see it, but it was prepared and
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  planned. I've got a very small amount of tech exposure in
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  US tech. I don't have huge tech exposure. I don't have any banking
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  exposure. What I do have is Chinese equity exposure. I've
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  done an episode on that, too. And the interesting thing with China is that it's not really
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  being poured into this much at all. The Hang Seng's pretty doing
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  OK. It's at the very bottom of its business cycle. The
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  companies that we invested in are doing really well. And
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  so I don't have a lot of US tech exposure. I've got health
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  care exposure, railroad exposure, oil exposure, and Chinese equities exposure.
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  That's pretty much it. Very small amount of US tech, very small
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  amount in one company, and I would like to
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  have a little bit more exposure in some consumer staples and
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  I would like to have a little bit more exposure in commodities. But
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  that's pretty much it. If you think about what an Iran portfolio looks
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  like is what companies do well in almost
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  any season. Because it's not even just a war portfolio, it's
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  a portfolio of every season. What's interesting about how I've changed my
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  whole approach to investing, and I was having a chat with one of my students about
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  this the other day, he said, Lloyd, since I became a student years ago in 2020, I did
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  a lot of your content and learned from you, and I've done so well, and
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  I've positioned this and done this, but he said, lately, just talking to you, your
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  whole approach to investing has changed. The reality is, some
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  of the approach has changed. I learned that really you only
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  need six to eight really good companies. to
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  do really well. And I thought about that for a minute. I thought, Hmm, that's
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  interesting. And I just contemplate, I think deeply, I think about in the gym in
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  the shower. My wife says I'm off with the fairies, but I'm not really off
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  with the fairies. I'm thinking about, I'm thinking deeply about
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  where to position capital to do really well long term without having to make too many decisions.
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  Because every time you make a decision, whether it's a buy or sell decision, you can make the wrong one.
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  So the whole idea in investing is to actually position yourself to make less
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  decisions. So it's not that I've positioned our portfolio to do well during Iran
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  war, it just worked out that way, because I positioned it for all seasons. And
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  so what I've done is I've really understood this the assignment where
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  I'm like, Okay, well, I'm gonna own six to eight companies for the rest of my life. What
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  are the six to eight companies going to be? So think about that Warren Buffett used to have this
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  kind of metaphor, where he said, you know, what if
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  I gave you a punch card, and you only had 20 punches on it, which means
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  the course of your life, you'd only ever buy 20 stocks, it
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  would really make you think hard about which ones you're going
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  to buy, every time you got a punch, you lost the punch, and you've only got 20 punches.
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  And it just started shifting how I invest. I'm like, well, if
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  I'm going to only get six to eight, which are going to be amongst the six to eight? And
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  that's why I think things like oil and healthcare and railroads and
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  some consumer staples and to some extent, depending on which one you
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  choose, some financials can do it, the rating agencies potentially.
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  What are the companies that are going to be around in 100 years? Which ones have already
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  been around in 100 years? And which ones will be around in 100 years?
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  And if you look at oil, railroad,
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  healthcare, I think you can pretty, you can see where that's gonna head
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  in the next, like it'll be around in a hundred years. Just quickly, if you're ready
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  to take control of your finances but feel stuck on where to start, I
• 5:37
  have a solution. My book, Money Buys Happiness, simplifies
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  investing and wealth building with practical steps to help you achieve financial
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  peace. Get your copy via the link in the show notes and let's get your
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  money working for you. Now back to the episode. So with some
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  of the other sectors I just mentioned, I don't know
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  if NVIDIA will be around in a hundred years. I just don't know. I
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  don't know if, I don't even know if banks, I
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  don't know. You got to scale it out and
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  see. So the way I've approached it now, I'm like, well, is
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  this, does this belong in my hundred year portfolio? That's
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  the question I ask myself now, and it's a very deep, thoughtful question,
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  because out of the 5,000 or 6,000 public
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  companies you can buy, what makes the sixth so good?
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  And that really makes you think about quality over price. Because
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  what I used to think was buying underpaid securities was the way to do it. But the problem with that
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  is, if you buy an underpaid security in a company that's not going to be around in 50 years, who cares?
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  Because then you've got to decide when to sell it, and that's a hard decision to make. So
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  the Iran portfolio, I put an X the other day, my Iran portfolio, and
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  I just shared it on there. So if you don't know if you follow me on X, but if
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  you do, I share a lot of stuff on there. It just so happened that the
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  portfolio was positioned for all seasons. And
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  what I love about it is that it does really well when there's wars on. And
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  there seems to be a lot of wars on. And I think war is something you can almost guarantee
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  happening. So I think it's just fortuitous that it's worked out
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  even faster than I thought. And to
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  give you an idea of what does well in wars, oil, railroads,
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  depending where you buy them, healthcare, consumer staples.
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  I think commodities will do well with an AI boom too. And
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  I think country risk matters. So if
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  you're anywhere in the Middle East in the real estate market, you're
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  starting to reconsider that now, right? So I think it's important to
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  apply the 100-year mentality to all your assets.
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  And could you understand or anticipate Dubai being around 100 years?
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  I don't know, because Kuwait was like Dubai was in some respects in the 1990s
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  before Desert Storm. And now it's not like that anymore. So it
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  begs the question whether Dubai real estate will even come back. I don't know. I
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  think it will, but... I think if you take the
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  notion of where does my capital position for
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  100 years, it really starts to make you think differently about where you're positioning it.
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  And that's how I think about investing. That's how I'm positioned for the war. I
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  don't know how you're positioned. I'm also positioned to not own real estate with
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  debt because I'm positioned to not get exposed to rate rises, which are happening now.
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  So I'm always trying to position myself to what's
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  the downside and how can I avoid it? And Charlie Mung had this great quote. He said,
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  you know, tell me where I'm going to die so I never go there. So
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  it was obvious to me that low rates weren't going to last. You can
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  just see that from history. So I didn't want to be exposed there. You could see
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  that oil was at a record low. I wanted to be exposed over there. You could see
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  what does well in oil seasons. I want to be exposed there. And I really want to know
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  where I'm going to die so I never go there. And I guess that's how I've positioned everything. so
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  far in my life. And that's why I kind of have a spring in
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  my step wherever I go, because I feel like I'm positioned for all seasons. And I hope
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  that makes sense to you. But if there's a war on, it's a
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  very good reminder to be positioning your portfolio in
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  places that stable, predictable, durable.
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  Does that make sense? And of course, that produces a reasonable return beyond
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  the bond rate or beyond the risk-free rate. And that's really
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  all that it's about. And avoiding debt. In a nutshell, that's my philosophy.
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  And looking for ways, wherever you can, during uncertain times
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  to make extra money. Because you definitely don't want to be starting to look for extra money
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  after rates go up, after oil goes up. You want to be looking for
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  ways to make extra money today, yesterday. Build the arc before
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  it rains. Okay, so I hope that makes sense. There's some fundamental things to consider.
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  If you've enjoyed this episode, Plop. a question below.
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  If you want to ask me about the portfolio, do that below. And of course, shoot me
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  a follow on X if you're not. It's just LloydJamesRoss on X. I'll see you in the comments
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  and I'll see you in the next episode. Thanks for listening to Money Grows on Trees. If you enjoyed the
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  episode, leave a five star review on Apple Podcasts and Spotify and
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  subscribe to us on YouTube so you never miss an episode. And
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  if you're serious about building wealth, make sure to check out the links in the show notes
• 9:51
  and follow me on all social media platforms at LloydJamesRoss