a hypothetical celebrity death match…

…pitting Trump vs. Hegseth, reality TV star vs. television news host, with the less cognitively gifted winning.

I would find this one extremely hard to call.

If press reports are accurate, and I tend to think they are, the US and Israel made a surprise attack on Iran with the objective of killing that country’s long-time leader. The hoped for result was regime change, with the new people more favorably disposed to both attackers. ,,,a plan straight out of the Vladimir Lenin’s 1902 playbook, “What Is To Be Done”. It seems the opposite has happened, with the new leader (understandably) more anti-US.

Apparently also left out of whatever planning was done was the possibility that Iran would initiate the kind of drone warfare we’ve seen in Ukraine, even though Russian drones come from Iran (the US apparently has limited anti-drone rocket supplies) or that it would lay mines that would close the Straits of Hormuz, a key waterway for the transport not only for oil (20% of the world’s supply passes through it) but also for natural gas and a lot of other stuff (the US Navy has no minesweepers, and didn’t think to ask allies who have them beforehand).

One result of the attack so far, although this can’t possibly have been a front-row objective, is that the US is no longer the worst-performing stock market in the world, as it has been since the Trump inauguration. Over the past month, the S&P 500 is down by around 5% …but the EAFE index of non-US stocks is off by almost 10%.

The reason is relatively simple, I think. Europe and Japan form the core of EAFE. Both areas are heavily dependent on imported fossil fuels. So they are being hit both by higher prices since the attack began and lack of availability of oil and gas. The US, with large domestic supplies of both, is not being hurt as badly by this…and I think the premium US stocks have traditionally received as being part of the land of the free and the home of the brave has long since been eroded by ICE. So the striking lack of forethought by the deathmatch opponents probably hasn’t had too much of an effect.

For you and me, I think the key will be deciding when to shift portfolio weightings into now-battered EAFE names.