Brent Johnson

The market focused on immediate energy and shipping disruptions, but the bigger opportunity is the delayed agricultural tightening from disrupted fertilizers, chemicals, and crop inputs during planting season. Positioning via an Invesco DB Agriculture Fund (DBA) January 2027 27/30 bull call spread offers defined risk with convexity to capture a potential food rally into Q4 and Q1.

Every country will have to rearm, and money will be spent on national defense regardless of affordability. This creates one of the biggest investment opportunities ever, both in the U.S. and abroad, as defense spending becomes a structural priority.

The peace-deal selloff in crude oil is overdone given that physical inventories are extremely tight, the SPR is at its lowest since 1983, and it will take months before strait traffic normalizes. As the market realizes the conflict may not be fully resolved and shortages persist, oil should retrace to fill the chart gap up to $85 and could return above $100 by year-end.

Reiterates the Dollar Milkshake Theory, noting the DXY is ~10% higher since 2018/19, and believes "the United States will outperform the rest of the world" and capital flows will continue. A global sovereign debt crisis (or fear thereof) and relative economic/military stability will drive capital toward the safety and liquidity of the US dollar, strengthening it. This is a multi-year structural trend. LONG the US dollar as the primary beneficiary of global capital flight and relative strength, which underpins the attractiveness of US financial assets. A loss of confidence in US fiscal/monetary policy that disrupts the capital inflow dynamic.

States "95% of our equity exposure is US equity" and outlines four global scenarios: global collapse, global growth, US outperformance, or US recession with world doing well. He believes the US is preferable in three scenarios and the fourth is very low probability. US markets have the deepest liquidity, are best prepared to handle negative shocks, and have comparable/good growth potential. The US dollar's relative strength (Milkshake Theory) supports capital inflows. LONG US equities as the highest-probability, most robust exposure for a capital preservation and growth mandate, accepting potential underperformance in a low-probability scenario. The low-probability scenario (US recession while rest of world thrives) occurs.