Hello, Reader.
This morning, we got word that a “complete and total resolution of our hostilities in the Middle East” is in the works between the U.S. and Iran.
Plus, there will be a five-day postponement on U.S. strikes against the country.
Oil and gas prices fell immediately and stock prices jumped, as Wall Street interpreted the delay as a step toward deescalation.
Iran, on the other hand, says there is “no dialogue between Tehran and Washington.”
Meanwhile, the International Energy Agency (IEA) warns that the global economy faces a “major threat,” describing the current energy crisis as more severe than the oil shocks of the 1970s.
The Iran conflict belongs to a category of risk called “known unknowns.”
Everyone wants to know if this conflict will catapult oil prices toward $150 a barrel… or crater the stock market… or both?
Neither is also a possibility.
Despite claims of “productive conversations” from the administration, no one knows the answer – which is why I hesitate to add my commentary to the pile.
Instead, I will simply remind readers that good things tend to happen to cheap stocks, while bad things tend to happen to pricey stocks – no matter how serene or chaotic the world might be.
To illustrate this point with a bit of history, let’s roll back the calendar…
Any investor who purchased a basket of U.S. stocks shortly after the Japanese bombed Pearl Harbor would have been wading into the most uncertain geopolitical waters of their generation.
On the other hand, those investors would have been buying their stocks at bargain-basement valuations of roughly 10 times earnings.
Over the next three years of worldwide chaos, U.S. stocks advanced more than 50%. In other words, even though World War II was raged in both Europe and the Pacific, U.S. stocks managed to deliver annualized gains of more than 15%.
Similarly, any investor who purchased a basket of U.S. stocks shortly after the Pentagon doubled its troop deployment to Vietnam in 1966 would have been stepping into one of America’s most uncertain and contentious military adventures, both at home and abroad.
On the other hand, those investors would have been buying their stocks for less than 13 times earnings. Over the next three years, the S&P 500 advanced more than 40%.
U.S. stocks were trading for nearly 20 times earnings when America effectively exited Vietnam – the draft ended in late 1972 and U.S. combat troops came home soon after. But the waning days of that war did not bestow any sort of “peace dividend” on America’s pricey stock market. Instead, the S&P 500 slumped 15% over the ensuing three years.
These contrasting examples corroborate a decades-long stock market tendency…
Cheap stocks tend to fare better than pricey ones, no matter what else is going on in the world.
I get into where I am looking for these cheap stocks below.
But before we dive into that, let’s take a look at what we covered here at Smart Moneyover the past seven days…
Smart Money Roundup
The Hidden Consensus Forming on Wall Street – and How to Get In
March 17, 2026
I came across a piece of high-end research that’s not publicly available, and it confirmed something important: I’m not the only contrarian voice discussing AI’s emerging bottlenecks – there’s a growing chorus behind Wall Street’s closed doors. That tells me something bigger is already underway.
No Memory, No AI – How to Play the Shortage
March 18, 2026
Memory companies could be among the next wave of AI stock winners, and already, Micron seems to be one of the main beneficiaries. In Wednesday’s issue, I discuss the current memory chokepoint in AI and how it’s actually setting the scene for a smaller set of asset-heavy companies to become the biggest winners. Here’s how to play the memory shortage.
This Oil Trade Looks Smart — But Isn’t
March 19, 2026
Investors are notoriously forgetful when it comes to using proven bad strategies in new situations. That’s exactly what we’re seeing as retail investors rush into oil ETFs like the United States Oil Fund LP (USO). In this issue, Tom Yeung explains how that could be a mistake and where investors should be looking instead.
My “Kick It and Pick It” Strategy for the AI Age
March 21, 2026
Time’s biggest technological changes are happening right now – and it’s all thanks to artificial intelligence. We’re watching the leap from AI chatbots to AI agents happen in a fraction of the time it took to develop the models themselves. That acceleration is where the biggest opportunities are forming.
AI Isn’t Peaking – It’s Entering Its Most Profitable Phase
March 22, 2026
Despite rising doubts about spending, demand, and sustainability, the AI buildout is not slowing – it’s expanding, evolving, and, in short, transitioning. The shift toward autonomous AI is happening faster than most investors realize, and it’s reshaping where the biggest opportunities lie. Louis Navellier goes into more detail in Sunday’s guest essay.
Finding Opportunity in the Unknown
Known unknowns like the Iran conflict deserve consideration – but they should not induce paralysis. Investing entails risk – forever and always.
Achieving investment success is not easy, even when analyzing known factors. It becomes close to impossible when trying to analyze unknowable ones.
The goal is not to crawl into a hole and hide, but to seek the best asymmetric bets you can find: stocks that offer significantly more upside potential than downside risk.
Right now, I believe that mega-cap tech stocks hold enormous downside risk. That’s because they are highly overvalued and spending an exorbitant amount of money on technological upkeep. Four hyperscalers alone are set to spend a combined $635 billion on AI infrastructure this year.
Here’s where I see upside potential: a new class of small, asset heavy stocks that supply these mega-cap tech companies with the physical goods they need.
I detail this coming capital rotation in my new FutureProof 2026 presentation. In the video, I also share over a dozen names with upside potential, for free.
Therefore, to the question, “How should one invest in the aftermath of the Iran conflict?” my answer is simple: exactly the same way you would invest during the prelude to it.
Unpredictable outside events will certainly make a mess of things from time to time. But investors who maintain a disciplined focus on asymmetric bets – and who refuse to overpay, even when the world seems calm – tend to sleep better during the storms.
And we profit more when they pass.
Regards,
Eric Fry
