Good morning and TGIF friends —
What a few weeks it’s been.
Oil spiking. Headlines blaring. A war that closed one of the most important waterways in the world. I know you’ve been watching it — and I wanted to take a few minutes to share how I’m thinking about all of it.
Connect the Dots
The most important thing an investor can do right now is understand why the market sold off — not just that it did.
The chain looks like this: War → Strait of Hormuz closes → oil spikes → inflation fears return → Fed pauses rate cuts → stocks sell off.
That’s rational. It makes sense. But not all sell off’s are created equal, and I’ve thought this one could be “fixed” in a moments notice.
A ceasefire. A deal. A tweet.
That’s genuinely different from 2022, when inflation was screaming higher and the Fed had no choice but to raise rates at the fastest rate in history — there was no headline in the world that was going to fix that overnight. And it’s different from COVID, where the global economy went dark, and we knew (in the early days) there wouldn’t be a cure/vaccine announcement for some time.
This situation has a political on/off switch. That makes it very hard to get too defensive, because the moment things shift, the market won’t wait for you to get back in.
The Move That Mattered
Wednesday the Dow posted its best day since April 2025. One ceasefire announcement, and oil dropped over 16% in a single session while stocks surged more than 2.5%.
That’s one headline. That’s how fast it can turn.
What the Market Is Telling Us
But here’s what I find even more interesting than the rally itself.
Thursday, even as oil climbed back up near $98 a barrel, the market shrugged it off and closed higher for the seventh straight session. A major deviation from the pattern of the past few weeks — and in my opinion, a very telling one.
In my opinion, the market is pricing in resolution. It’s looking past the current oil price and telling you that this conflict is likely behind us sooner rather than later. Markets are forward-looking by nature — and right now, they’re looking forward to a world where the Strait reopens and the geopolitical fog lifts.
The Stat That Puts It All in Perspective
Here’s something I think about a lot during moments like this.
Since 1928, the S&P 500 has returned roughly 8% per year. Miss just the 6 best trading days in a given year — 6 days out of 250 — and that return goes from 8% to roughly flat.
Six days! That’s the difference between a strong year and a year where you made nothing.
Those 6 days never announce themselves; but they tend to cluster right around the worst ones — because that’s when the snap-backs are the strongest. Wednesday was one of them.
The investor who stayed put captured it. The one who moved to cash waiting for things to calm down didn’t.
You can’t time those days. You can only be there for them.
The Bigger Picture
I’ve been doing this long enough to know that markets don’t reward the people who wait for things to feel safe. They reward the people who can endure the moments when they don’t.
The pullbacks are real. The fear is legitimate. But so is the recovery. And as I said earlier, the recovery doesn’t announce itself — it just happens, fast, while most people are still debating whether to get back in.
That’s the nature of this. And understanding it is more valuable than any single trade.
Stay invested. Stay patient. And as always, reach out if you want to talk through where we’re positioned from here.
Jacob Craton
RollingWave Capital