The Mirage of Trading the Headlines: Why Geopolitics Is a Portfolio Hazard
Don't trade the tape
Israel–Iran War Headlines: Great for Clicks, Lousy for Timing
Israel’s formal declaration of war on Iran and Washington’s call for Tehran’s “unconditional surrender” have lit up every newsfeed.
Oil and the dollar jumped as expected—but Treasuries didn’t rally; yields rose on inflation fears. Equities dipped, then refocused on the Fed. Gold popped, then faded into the FOMC meeting. Bitcoin merely coughed.
Bottom line: Most of the “news” was priced in before retail investors could act. History shows knee-jerk trades in geopolitics are usually wrong-footed.
Why Geopolitics Feels Tradable—and Usually Isn’t
Investor rule: Watch, don’t chase. The S&P 500 typically recovers within six months of major geopolitical events.
Portfolio Discipline > “Fast Money”
Binary outcomes, unknown timing, sentiment whiplash: the odds are stacked against headline traders.
Missing the rebound is costlier than riding out a drawdown. A handful of big up-days drives most long-term equity returns.
Instead:
Rebalance, harvest tax losses, stick to process.
Never be afraid to sell winners because you fear taxes, but sell in non-taxable accounts to rebalance if possible.
Diversify across assets that don’t move in lockstep—and stop watching every tick.
Fed Day: Powell’s Tightrope
Dot plot says “higher for longer,” but the market still prices two cuts starting in September.
Soft retail sales and CPI argue for easing; $75 oil argues against.
Powell, in a potential final year, doesn’t want to be Arthur Burns or Paul Volcker.
New Fed chair nomination being discussed.
Candidate will likely support a higher inflation target—maybe 3%—and be open to lower rates.
Trade idea: Stay neutral duration (i.e., don’t structure your portfolio to bet on a rise or fall in rates); use options to express views around the September FOMC (so you just lose premium if you’re wrong).
Submarines vs. the Grid: The Labour Shortage No One Priced
Pentagon may scrap a Virginia-class sub sale to Australia because it can’t find enough welders—those workers are needed to harden the U.S. power grid.
Coding won’t fix a welding shortfall; chronic skilled-trade gaps are the new supply-chain risk.
These are the “big moves” worth watching for shaping strategy.
Senate Tweaks to the “One Big Beautiful Bill”
Still in flux, but early language paring back House's sledgehammer.
Tighter construction deadlines for qualifying projects
Sunset clauses that could eliminate certain credits by 2028
Rollback of tech-neutral clean energy support, including nuclear and geothermal, for foreign-related entity involvement
Carve-outs for energy storage
Quick sunset of credit support for hydrogen and EV vehicles and chargers
And a controversial 10-year ban on state-level AI regulations, tied to funding
Senate softened the House bill in some ways, tightened it in others (45Z— extended eligibility period but no negative emissions rate)
Lots of room to negotiate still, but the path is narrowing.
Another take. I am ambivalent about Alex Epstein because he is a little too convinced and a lot strident:
Market Tape
MacroMashup Playbook
Resilience over reaction – Stick to strategic weights; trim into strength, add on overshoots.
Watch skilled-labor bottlenecks – They’re the next supply-chain inflation driver.
Geopolitics ≠ Investment Thesis – Use it for risk scenarios, not trade triggers.
Enjoyed this newsletter? Get Involved.
Subscribe to MacroMashup: one email a week, zero noise.
Book a call with Dakota Ridge Capital if you’re investing in clean energy or want to optimize for tax strategy
Collaborate with us at contact@macromashup.com
📤 Enjoyed this? Share it via LinkedIn, repost on X → here, or forward it via email.
Thanks for reading Macro Mashup! Subscribe for free to receive new posts and support my work.