Yes, there is. If take a retrospective adventure back 200 years – with the chart below, we find that during this period there is one common conclusion. At the beginning of the war the stock prices diving first, but quite soon recovers and goes to new highs again. So the proper approach is to buy the first days or weeks of all war times. As Baron Rothschild reportedly said, "The time to buy is when there's blood in the streets." He made a fortune buying in the panic that followed the Battle of Waterloo against Napoleon. The interpretation is the worse things seem in the market, the better the opportunities are for profit. We need to be fully contrarian and act against the mass in those days if we want to make money.
The big picture:
Below we collected some charts about the war and Dow Jones correlations. Those prove that the war is a great investment opportunity. It sounds horrible and morbid that the capital markets create profit from blood and pain, but that is the harsh reality. And, right after the wars the prosperity and booms got started always with great performances.
Take World War I. as an example. The stock market closed for 4 months and at reopening the Dow Jones was down 30 percent, but in 1915 it was back up to 80 percent.
At Korean War after 2 weeks dip the market went up new highs again and recovered rapidly.
In the Golf War right after the US troops invaded Kuwait the market jumped higher and made a great bullish rally.
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The BFM Assets Team.
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