History Favors the Optimists

Hey guys, it’s been a while!

The past few weeks have been volatile for markets.

Between geopolitical tensions, mixed economic data, and questions around AI spending, investors are being pulled in multiple directions at once.

And over the weekend, things escalated again..

President Donald Trump confirmed airstrikes on Kharg Island, Iran’s main oil export hub and one of the most important energy facilities in the region.

This island handles the majority of Iran’s oil exports, so hitting it sends a very clear message.

Iran has already threatened retaliation.

Technically the Strait of Hormuz remains open, but many ships are avoiding the area due to security risks.

That matters because roughly 20% of global oil supply passes through this region.

If tensions escalate further, it could quickly become one of the biggest macro drivers for markets this year.

I also broke this down in a YouTube video if you’d like the full context!

Historically, markets tend to react negatively when geopolitical conflicts drag on.

The main reason is oil.

If the war disrupts supply routes or production:

Prolonged conflict → oil supply disruption → higher oil prices → higher inflation.

And inflation is already a sensitive topic right now.

In addition, the latest economic data sent a mixed signal.. U.S. GDP revision for Q4 came in at just 0.7% growth, down significantly from earlier estimates around 1.4%.

At the same time, inflation gauges like Core PCE remain elevated, showing price pressures are still sticky.

The fed is at a tight spot now.. if they cuts rates too early, inflation could surge again.

But if they keep rates high, the economy could slow even further.

For investors, that means markets may continue swinging between:

That push and pull is exactly what we’ve been seeing lately.

While macro headlines have dominated the news, the AI investment cycle is still very real.

And we could soon get a reminder of that.

This week, Nvidia is hosting its annual GTC conference from Mar 16-19, where the company typically unveils new AI chips, data center technology, and partnerships.

Over the past month, investors have started questioning whether AI spending might slow down or whether competitors could start taking market share.

If Nvidia announces new breakthroughs or strong enterprise demand, it could help restore confidence across the entire AI sector.

In fact, I do think there are many solid AI companies at a discount right now!

I know some of you might be thinking to continue waiting on the sidelines until the geopolitical situation becomes clearer. That instinct is understandable.

But markets move quickly.. Sometimes all it takes is a single headline about de-escalation for sentiment to shift overnight.

And despite all the noise, the big picture hasn’t really changed.

AI demand remains strong, many companies are still reporting solid earnings, and innovation across the tech sector continues to move forward.

History also gives investors an important perspective.

Since the Korean War, the S&P 500 has averaged a 14.2% gain in the 12 months following major geopolitical shocks.

In other words, uncertainty tends to create short-term volatility, but over time, markets recover.

Right now, markets are dealing with three competing forces at once:

In the short term, that combination likely means more volatility ahead.

But volatility and opportunity often show up at the same time.

For long-term investors, the key is staying focused on fundamentals and continuing to build positions in strong businesses over time.

History tends to reward the investors who stay rational when headlines get loud.

And historically speaking…

History favors the optimists.

And always remember -

Patience builds wealth,Bjorn

YouTube | Tiktok | Telegram