Wars - Global Equity Markets Performance in the past

Industry Insights
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With Russia Ukraine War being the hot topic now for all the traders and markets making daily move based on news flow coming from Kremlin and NATO, I was fascinated to check what happened to the markets when wars happened in the past.

The result is surprising for sure

war and markets

My Observations

  • Using Dow Jones as an example, we can see that the overall drawdown on an average has been around 5% and it took 1-2 months (47 days on avg to be precise) for recovery

  • There is an increased level of Volatility (Obviously duh) and that kind of forms base for next bull run.

  • There hasn’t been significant damage to the markets as hyped by most of the fear mongering guys

The above picture is an excerpt from the following Investopedia article

How War Affects the Modern Stock Market.

Tell me what do you feel about war and markets ? will the history repeat itself or is it going to be different this time around

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War is the beat on which Humanity raps. The great accelerator of Mankind. The purpose in an otherwise meaningless universe. No other species conducts warfare at the scale and focus Humans do.

It is only recent times that we have come to see War as something unnatural and futile. This is not because of moral reasons, it is only because Humans have maxed out warfare to a point where it has become scary. Not only to the participants but to the world at large.As Bane says in one of the movies, “Peace has cost you your strength, victory has defeated you”. In this Nukes become “Weapons of Mass (Uneasy) Peace”

Every innovation you see around you has either directly, or indirectly come through War. Even the ones made independently for its own sake, had someone knocking on the door, asking - “Can you…uh…you know… weaponize this… ?”

Post Atom, the role of War has changed though. Before it was a tool for the more powerful party to demand concessions from the weaker. Now so long as the weaker Party has atom, the roles have switched. It is now a game of - “Bro, I am taking Ls anyway, so if you don’t cede these 3 things to me, don’t @ me when I go around evaporating some cities. If I am dying, you’re coming with me. So its best, to just give me these 3 things, you’re rich anyway. So who cares ? We don’t War over this do we now ?”

The Failure of US wasn’t in developing the Sun, this was to happen someday anyway. Its failure was doing nothing before it reached nations who hold it with slippery hands.But why cry over spilt Milk.

What are some probable solutions to this ? It is to identify that no one actually wants War if they can help it. Technology has softened us enough for us to lose our appetite for it, or atleast significantly reduced it. It can only be done through identifying which Nations are cornered and have fatmans- Russia, China, Pakistan and North Korea are the usual suspects. Only their integration back into the Garden and out of their backed up corner can help. Where the world says, we understand you have found yourself riding the Tiger, and have to act tough all the time, fearing that the Tiger will eat you up if you stop acting all Macho. The World has to come together to help these Tiger Riders come back to the Garden and drop the act. People backed into a corner do and say the strangest things.

There are two problems with this :

  1. It would require Tiger Riders to accept that they couldn’t make it to #1 and had to settle for Silver and Bronze.and have to live with that.

  2. It would be a loss of massive steady revenue for War Merchants who sell to both sides and make Bank.

The only possible solution to this, would be sadly, to become a Space Civilization ASAP and start claiming planets and moons for Earth. This would zoom out the trivials problems about “Flashpoints” and unite all parties towards bigger goals.

As for the Markets, well markets eat up volatility everyday, whats some more Vol now and then, if anything acts as a palate cleanser.

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Hope ? What use is Hopium if it solves none of the underlying problems. Sadly, nothing can stop a RIC alliance if situation is allowed to fester like this. India’s hands would be tied due to geography. Sitting deep in the middle between such lovely and co-operating neighbours, appeals and small talk would not help.

Only if US was willing to go beyond hoping, and help India out with some (many) F-22s, F-35s, a bigger say in UNSC and a few Aircraft Carriers to watch over the aptly named “Indian Ocean”,maybe, just maybe RIC will not happen.

Post War US had a chance to befriend a strong resurgent ally in Asia, yet it chose Pakistan. Back fired big time didn’t it ?

There is still time yet, woo-ing and courting wouldn’t do. An India armed to the teeth, its economy prosperous, her people happy is the only way to keep Asia balanced. Everything else is a cope.

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Let’s see what happens from hereon. War is always bad for the economy and markets except for a few companies. Also, the volatility it brings is good for traders and option players.

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China already has openly declared its plans like Larry Bird and wants the world to try and block it. The Chinese are many things but not Liars when it comes to these matters.

World is focusing on the wrong hammer and sickle. Russia’s problems come from a more simple place, of rejection and isolation. That is the lesser of two problems. China’s problems comes from the Mandate of Heaven itself. They will not stop until the Middle Kingdom is restored to its rightful place.

Using Russia as a decoy, China will go after Taiwan, Hong Kong, South China and the entire East Pacific. Sitting on vast natural resources, the way to the future goes through China and it knows it. Keep giving it factories, wealth and technology and it will gladly take it without saying thanks.

Throughout history Chinese have understood only one language, ‘Losing Face’. This is where they are predictable. Stand your ground, return the death stare, don’t blink and they understand. India has to do this exercise with them on a yearly basis.

They are not evil. World has played into their hands, they would be foolish to not use it to their advantage and make up for the lost face of the past.

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Hahaha :grin: Gajab duniya hai yeh bhai log.

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Well then it’s time to buy defence industry stocks or portfolio like general dynamics, Lockheed Martin, Boeing etc, their prices certainly would rise with US govt deficit spending. Frankly not a lot of people know about the military Industrial complex.

Frankly about war overall has got do with crude oil barrel than any other thing else. Putin wouldn’t be invading Ukraine if crude oil market crashed lol. Everyone knows the crude oil barrel prices are all time high and so is Putin with Ukraine.

Some background history about the monetary system, use, military Industrial complex and middle East and coming to present :-

TLDR; after ww2 our currencies were backed by gold via USD through the Bretton woods system. But US had done enough defecit spending created more dollars than there was gold in their treasury to finance korean war, Vietnam war and countries started repatriating their gold from fed reserve by exchanging currencies. Richard Nixon was forced to cut off the gold standard and since then all of world’s currency became fiat. Ever since then evil came to this world. Keyensians and bankers own the planet now. To keep up the value of dollars they went to middle East and ran the policy of crude oil to be always priced and sold in dollars and petro dollar recycle which Saudi agrees. That’s how the USD has value today. Well fed reserve is evil too and quite like keyensians do QE and other money printing bussiness and that penalizes emerging economies and raises wealth disparity. Saddam Hussein tried to sell oil in euro and we all know what happened. Gaddafi tried to sell oil using something new gold standard libyan dinar and we know what happened to them. Only Russia and Iran couldn’t be done anything because they are nuclear powers. On top of this there is a group of defence companies all private in US called military Industrial complex that want war always so that bankers get nice treasury bonds from govt deficit spending. This is the reality though.

Background behind Russia , Nato Ukraine :-

Russia has taken a very big beating with sanctions and not able to participate in USD and swift system. But they also export oil and major non OPEC oil exporter. From my analysis Russia might surrender if crude oil market crashed but may not enter into war with NATO. And NATO is bad too. They gave enough reasons for Russia to feel surrounded and go to war by building military bases all around Russia and with many ussr former countries like Estonia and Latvia joining the NATO. Moscow has a range of anti ICBM’s to counter incoming nuclear missile. But then US started deploying MIRV (multiple independent reentry vehicle) missiles in Romania which is closer to Moscow. These missiles are no less most terrible thing ever built so the way it works is it’s an ICBM which after launch in the atmosphere split into many multiple independent rentry vehicle which will fall into the target area. This is done to overwhelm the anti ICBM’s system place. Each of these MIRV has nuclear warhead with power 28times of Hiroshima. So Russia has a lot of reasons to go to war and feeling threatened. Putin even said to an interview “I don’t know where this all going to end”.

So coming back to Ukraine , Russia annexed Crimea which ukraine didn’t like. And NATO works like of if one country is attacked it’s essentially attacking all other group of countries and all other countries will respond. Ukraine now is trying to join NATO and will definitely take Crimea back through military means , this would eventually lead Russia vs NATO OR US vs Russia. This is what Putin is skeptical and is main reason why they might want to go to war with Ukraine which is to avoid a nuclear crisis. Well it’s very hard to say how it’s going to end but if crude oil barrel price does come down I do expect the war to be averted.

From investors perspective I don’t think they might go to war mostly as both economies took a beating since pandemic. But it’s very hard to say and better to watch the crude oil market.

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This is good. Nice. But won’t be fully effective without some of that sweet hardware. How do you move in a room full of no’s? How do you stay faithful in a room full of foes ?

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Great video by Jake Tran.

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Anybody has India specific data ?