The market is not set up to handle any Iran war curveballs, says fund manager

Ajouté : 2026-05-31

[00:00:00]market is is a bit sanguine, where they believe that a true steel for 60 days is coming, right? You've seen you know, a number back and forth in terms of some you know, difficulty in getting there, but at the same time, I think it seems that the perception at least in the marketplace is it's you know, some sort of de-escalation is coming forward and the market's sort of expecting that and pricing that in into both equities as well as the oil market oil curve, and you're starting to see that today. So, you know, to me they're acting it's a bit sanguine, where it's sort of built in, but yet, you know, a lot can go wrong, and we've seen escalation even in the past 48 hours while they're trying to de-escalate. So, it's a bit unusual, but it you know, I think the market feels that the road ahead is it's going to be a lot less bumpy.

[00:00:55]>> Okay. So, you're not the only one who thinks that the market is a sanguine and for frankly, so far this year, but the bulls out there would say, "No, no, the market is very selective about this.

[00:01:09]So, the stock is rising, and it's really about buying companies that that sell scarcity. It's about the compute. It's the AI hardware. It's the energy infrastructure, and you know, services where demand is greater than supply, basically. So, we're okay. We're not sanguine. We know what we're doing." How do you respond to that?

[00:01:36]>> Yeah, so I I think there's some truth to that. So, I mean, the one thing that's happening is even myself, like I've been really weary of the AI growth narrative just because there's so much capital chasing it. I mean, we're talking, you know, billions and billions of dollars, and anytime When have that, you know, there's always a chance that the I the growth and the demand and the upfront is there, but ultimately, um you know, we're not going to get the return on investment from that and you're going to start to notice that over the next several years, but it just seems like the amount of chips uh and and servers that are required for this buildout is just so severe. So, as you described, whether be Dell or Snowflake earlier today, I mean, you're starting to see uh some actual numbers that, you know, you you you can't ignore. Um you know, that So, that's one part of the market, uh I'll say. And then the other part is some of the realities that are taking place where, you know, yes, they're saying what is far as they think a deal's happening. At the same time, you know, we've seen a quarter billion barrel of inventory of oil, uh you know, fall off the market in the past, you know, in in a in the first 2 months of the war and that's continuous even today every single day that's going by. So, there's going to be a point is what I'm saying that either a deal's going to be signed and more importantly than an MOU, you're going to actually need to see ships transporting a bunch of oil out of the strait consistently.

[00:03:11]And if you do see that for that period of time and they could actually have a more secure uh deal going forward, then perhaps the market will further uh revalue in terms of the yield curve from the index is where the AI trade will actually improve even further, if you could believe that, and the oil trade will actually help consumers. But, I think, you know, to believe all that's going to play out exactly what how I described, uh I think I would be extremely wary of that. So, what is the market not set up for today? I would say something that's a curveball, right?

[00:03:47]Where this gets, you know, elongated out in terms of the process of ceasefire and agreement and all of a sudden you know the the world economy continues to have more of a stagflationary feel.

[00:04:01]>> Yeah, and I like the way you put it a curveball, right? And we can get it at any point. I mean like that's how I brace for this show every morning that just get ready for any kind of curveball given the times that we live in. And that brings in the risk management question and you know you were talking about the price action overnight for Snowflake and Dell and you know earlier this week it was Micron that garnered so much attention along with SK Hynix over in South Korea hitting that a $1 trillion market cap. And then here comes the risk management need. I mean given the run it's had that people are going to take some profit off not because they don't believe in AI anymore but it's just what they're supposed to be doing to be prudent with their portfolio.

[00:04:50]>> Yeah, and you're not seeing a lot of prudency today. So on one hand like I said I would say like you know you can't you know you can't you know look at the situation and say oh this is just sort of like fairy dust the AI is not going to exist and all this is is is money is not being good you know put the work going to actually you know work out well. I mean there's a reality of the AI how it's going to be used in business and and the society over the next you know several decades.

[00:05:19]But I think this is a much different technology than we've ever seen before. So there's a lot of unknowns and you know the societarian you know aspect of it is unknown right?

[00:05:31]Where we've already seen like some massive layoffs from some huge companies.

[00:05:36]And you know we talk about the AI build out and what that means but you also have to remember that in order for global growth to continue you know our as like a whole has to benefit. It's not just companies that are producing profits and stock markets. You know, we actually need to have you know, there has to be a room for people even at sort of the bottom where they could actually make a living. And what you're seeing in the market today unfortunately is you know, this wealth effect where people that have you know, investment and people that have high paying jobs are doing extremely well and you see the consumer numbers even out the last few days. And then people at the bottom are really having a tough time. So it goes back to what I said. There's a stagflationary feel to the market. But again, if you're wealthy and have assets, you seem to be doing well. So again, if you step back and look at the macro itself, which I tend to do, I mean it's it's actually feels like a great time to be alive and to be an investor, right? Whether it be technology advances, whether you look in Asia at some of the indexes there, right? That are at highs. I mean this feels a lot like the 90s unfortunately.

[00:06:43]And I'm just so so that's what I'm worried about. Is this a repeat to some degree of the 90s or is this just like a new frontier and that we just have to adapt to it. But I think ultimately there's a lot of things that could still go wrong and throw it a curveball. We just need more time. Like I said, if the if we talk in the next month or two, I think we'll have a much better indication as far as how things look in terms of the straight, which is so imperative to global growth.

[00:07:10]And and we need to see some of that dynamic take place by year end.