Know Your Risk Podcast What Investors Are Missing Right Now
Mar 11, 2026
They debate oil market mispricings, how shipping and insurance reactions can rapidly tighten supply, and why shorting oil risks convex losses. Military realities versus public messaging around the Strait and the costs of forcing it open are explored. They flag energy stocks as a major opportunity and outline portfolio tilts and hedging ideas amid geopolitical shock scenarios.
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Markets Are Mispriced Despite Obvious Oil Shock
- U.S. and global markets are behaving irrationally given the oil shock and geopolitical risk.
- Zach Abraham calls current U.S. markets a "farce," noting stocks flat while oil jumped ~5% and yields rose, signaling mispricing.
Avoid Shorting Oil Or Oil Volatility
- Do not short oil or oil volatility right now because downside appears limited and upside is large.
- Zach warns the current setup is extremely concave and recommends buying oil or energy stocks instead of shorting them.
The Strait Creates Asymmetric Geopolitical Leverage
- The Strait closure removes leverage that previous trade policies relied on; energy gives Iran real asymmetric leverage.
- Chase Taylor explains markets still cling to "magical thinking" about whether the Strait will reopen.