Here are my thoughts about the Iran situation
It’s debated if the attacks on Iran constitutes war. But it’s less debatable that it was an act of war or could be interpreted as a declaration of war. The Japanese attacks on Pearl Harbor, although limited and not affecting civilians, led to the U.S. involvement in the Second World War.
Regarding forecasting, I was unsure and didn’t make a definitive prediction on my blog either way. I was also correct there would be no peaceful resolution or negotiations. On Polymarket, I am glad I didn’t bet ‘NO’ on ‘Will the U.S. attack Iran by July 2025?’, or I would have lost my entire wager. I saw that I had no edge in the market, so I didn’t bet.
This was not one of those things where any forecasting method would have been useful. Trump had good reasons for action or inaction. By comparison, in regard to tariffs, the economic and political arguments for delaying or backtracking were far stronger, so I correctly predicted he would.
However, unlike WW2, I am predicting no escalation or other countries joining in the conflict. I predict the attacks will be a success in so far that the situation will spontaneously resolve, as these things have typically done in the past, even if attacks are still going on now.
Voters and the media have short memories, and if Israel and Iran enter into a stalemate or otherwise de-escalate, Trump will be vindicated. As I wrote last week, to demoralize and divide the ‘MAGA base’, the media continues to push a narrative that many Trump voters feel betrayed.
The vast majority of Trump voters, except for this small vocal minority online, do not feel betrayed. Fuentes and others were never part of the ‘MAGA army’. They were always critical of Trump or on the sidelines and will look for any reason to criticize him.
If the Iran situation improves, those who are accusing Trump of betrayal will memory-hole it, or backtrack and say Trump was right all along. If you want to black pill, then you have to stay committed to it. You cannot just do a 180 and pretend people will not notice, because we will.
Of course, the US is going to stand behind Israel, and Trump is no exception. If you’re surprised, then you’re new to politics or not paying attention. Trump never ruled out attacks on Iran during any point of his campaign or in office.
The economic consequences of the potential closure of Strait of Hormuz will be limited, which is why the stock market brushed it off and oil futures were only up a little by Monday morning. Markets are remarkably adaptable at adjusting to short-term supply shocks.
War is generally a positive for the stock market. The stock market recovered and Bitcoin fell, as I correctly predicted. To hedge the possibility of attacks, I shorted Bitcoin. As I wrote last week:
Same for shorting Bitcoin. My previous method involved shorting during market hours, but I have modified it to short continuously, without the specified window. This way I am able to hedge any bad Middle East news as it arises. But if the stock market surges, Bitcoin will lag on the upside, so I come out ahead either way. Bitcoin has lagged QQQ. This is much better than prediction markets, in which I have no edge. With my method, I cannot lose unless Bitcoin exhibits a lot of strength relative to tech stocks, which is short-lived and uncommon anyway.
The trade could not have gone any better, having profited from Bitcoin falling and the stock market quickly recovering by Monday morning. When I claim to be the best trader in the world or highest IQ, it’s all backed by quantifiable evidence/results. I was among the first to observe that Bitcoin is extremely sensitive on the downside to bad news, yet much slower on the rebound. QQQ is the opposite, so the perfect trade is to short Bitcoin while going long QQQ.
Thanks to the above trades, my account is at a new high. I would say it was ‘well played’, having profited by Bitcoin falling as a result of the attacks, and then Tesla stock surging 10% in unrelated news from the Robotaxi event. So I am way ahead overall.