What Should Investors Do After the U S Drone Strike

What Should Investors Do After the U S  Drone Strike

hi I’m Jimmy in this video we’re looking
at the possible opportunities and pitfalls from the volatility that
occurred in the stock market after the u.s. launched a drone strike that killed
a top Iranian commander and hopefully we can use this knowledge to ultimately get
each of us closer to our own personal goal of financial freedom so the reason
I wanted to make this video is as I’ve been watching the news come across the
wire about the drone strike I can’t help but think of Warren Buffett’s very
famous saying where he says be fearful when others are greedy and greedy when
others are fearful and as an example when we look at what’s been happening
with the oil market well we can see that oil prices have spiked they spiked
overnight after the news came out I believe it was Thursday night Friday oil
prices were up big and on one hand this is completely logical the middle east is
clearly a huge player in the oil markets but oil prices jumped almost 4% and that
seems like a reaction that is very much based on fear not fundamentals
there’s no less oil being produced today than the word just a few days ago and I
bring this out not because I think we should get involved in oil but I’m
trying to stay mindful of what is a logical reaction to things and what is
simply investors being fearful not long ago there was another there was an
attack that was directly on I believe was an oil refinery and oil prices once
again shot up there was fear of a you know a restriction in the supply that
didn’t happen and shortly after that the prices came back down now this stuff has
a ripple effect to it another example is airline stocks when we flipped through
some of the airline stocks where we can see that on Friday Airlines top every
airline stocks really pulled back as the price of oil climbed but once again we
have to ask is this fear driving this price change or is it a fundamental
change here now if oil prices recover I would make the case that this pullback
shouldn’t really happen in the airline stocks so perhaps going back to
Buffett’s statement of buying when others are fearful if airline stocks are
something that we’ve been looking at perhaps this is the opportunity we’ve
been after okay then there’s something like gold
now this is the price of gold and as we could see gold the price of gold has
risen a lot recently and although the recent rally and the gold prices weren’t
completely tied to this Friday gold was up after the whole drone strike happened
and clearly there’s a question as to what Iran’s reaction to this is going to
be and ultimately although Gold’s doesn’t really have a fundamental way of
analyzing it it is known as one of the top defensive holdings it is this is
ultimately a reaction this is a flight to safety so what’s the best move as far
as gold is concerned well I’m guessing that as long as tensions remain
heightened well gold could continue to do quite well now on a personal basis
I’m not sure it makes sense to jump into gold at this point from an investment
standpoint not it was certainly not based solely on this information because
to my way of thinking jumping in on gold anytime soon in reaction to this is the
same thing as following the pact which is exactly what we want to avoid as
investors and this brings us to another logical opportunity that’s being
impacted by the recent news events and that is defense stocks or companies like
Lockheed Martin or Raytheon or no for Grumman or General Dynamics well we can
see that with each of these companies they are all moving higher as the
possibility of a military conflict increases now for me this actually
presents more of an opportunity to sell the stock than there is to buy it since
as we said before we don’t want to jump in and follow the pack and jump in here
just because we think that there’s a chance that the stock could move higher
I’m inclined to look at what’s happening with the individual businesses compare
that to the fundamental take the fundamentals of the company compare that
to what’s been happening with the stock based on the news
making our decision based off of that now it’s likely that the fundamentals of
these companies haven’t changed at least not yet
now if we got involved in any of these stocks for the long term well to me this
type of reaction even if it’s an overreaction and the stock seems
overpriced now if we got involved in this the past year or two for and we
intended to hold it for the long run to me it wouldn’t make sense to jump out of
this based on short term news event I would lean on not overreacting to any
one piece of news obviously depending on our investment goals
well that would perhaps sway how we would react to any one piece of news
especially our investment horizon but I think the most important thing for us to
consider doing is to try to avoid doing what everybody else is doing if
everybody else is buying we’re probably buying at a price that’s too high
everybody else is selling we’re probably selling too low I really think it’s
important that we each think for ourselves and try to logic things out as
much as possible now one possibility that I’ve personally done myself on many
occasions and I’m actually a big fan of doing if you’re comfortable with it and
that is selling options now I say selling options and not buying options
because on days like Friday where there’s an increase in volatility and
everything goes a little bit crazy well all options become more valuable so
for a buying options where we’re likely to pay more when volatility is higher
generally we don’t want to do that but if we do want to generate some dividend
like income from selling call options based on our investments well selling
covered calls could make sense now I’ve been actually been thinking about doing
more videos on options if that’s something you’d like to see please let
me know in the comments below I’m a huge fan of options and I think they can be a
very powerful tool if they use properly and they’re frankly quite dangerous if
people don’t know how to use them but I do think the opportunity is there now if
you’re looking to find out more about options now well in this video I walk
through the basics of covered calls so if you’re interested that could be a
good next video to watch and I really want to thank you for sticking with me
all the way into the video I hope you found this interesting thanks and I’ll
see in the next video

Eugene Islam

45 thoughts on “What Should Investors Do After the U S Drone Strike

  1. Thanks for sharing your commentary. How to respond to specific news events & the emotional responses to them within a macro trend is an interesting theme within investing. It would be helpful to see how different sectors/industries are affected and how options can be used effectively.

  2. Yes my day to day trading is options and would love ypur thoughts. Also I know you like to keep your video short but I'm looking into making my own YouTube Channel and learned that if you have your video for longer than 15 minutes you can insert ads and make Revenue that way. I didn't know if you realize this or not but I was thinking of you Jimmy did you so much for all of us I wanted to give you some info that I that I know to help you too. Thank you for all you do for us you have a wonderful Channel let's go 2020

  3. To me this is bullish news. You did not mention the whole month of December was bullish and it may have been people taking profits.

  4. Hey Jimmy! I really like your videos and respect your opinion on investments. I always thought options was straight up gambling (I know nothing about them), so I would like to hear what you have to say about them.

  5. Hey Jimmy: Great video (as always). Yes, if you can do a video on options, it will be great. Specifically here, in this video, you mentioned that you might have opted to sell option last Fri. If you can make another video and explain why selling option may have been a good action – it will be great. Thanks again for your good video.

  6. I trying ignore the noise, hopefully it doesn't escalate any further. Just gonna keep investing as usual

  7. Jimmy I love your videos and how you express your point of view. Just one question: I’m just starting to consider investing in the stock market. I’m based in France, and tbh I’m really hesitating to pick the right broker for me. At this point I’m considering using Revolut. Because I read some nasty reviews about E*TRADE (I already have an account there just set up now) and also bad reviews for etoro (generally both because of hidden fees and delays during withdrawals etc). Would you recommend Revolut? What would be your best online broker to use from Europe? I mean the best of the best 🙂 thanks a lot !!

  8. Thanks for sharing. I was out on a day trip yesterday, unplugged, and missed the news. This explains why my limit order went through yesterday on UTX, though I hadn’t expected it to go up by $4 per share so soon from when I set it in December. I’m glad because it was a position I didn’t want to hold anymore.

  9. Stack barrels full of oil because it will be darrnn expensive😂 regarding to gold.. USD is falling and people hedging their funds and preparing for crash

  10. There is always a new wall of worry to climb. Be aware of what's going on, but just keep investing through it unless there are real structural changes in the economy, and even then it's just making adjustments.

  11. I would love to see more videos on how to properly use options. I hear it’s a dangerous game to play. You might teach us how to properly use them.

  12. Definitely interested in you covering options. I have been trading them for some time and would love your insights. Great videos and channel. Bob

  13. You missed a few. utx is the company that makes the drones and got a huge contract with that defense budget. also txt makes munitions and those also got a sizable contract after problems at the federal lake city munitions plant. gd, lmt and rtn do jets and ground system, not drones

  14. I trade options regularly; I'd like to see your take on topic for sure. I took advantage of the IV spike on Friday myself — though I'd like to add to your cautionary note; options are quite dangerous and are not something someone should get involved with willy-nilly. They can behave quite differently from stocks. But when well managed, then they are a nice tool to have on hand.

  15. Please do more options videos that sounds like a great way to expand your teaching portfolio, dividend videos are always a staple but it’s doesn’t hurt to diversify

  16. Hei hei
    My super youtuber !! Is the time for option! I'm a traveller and in the future i want to trade option during my holiday 🤑

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