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What a third world war would mean for investors
- 1970-01-01 3y agoIf we get to WWIII, investors are trading cans of food, not stocks. Wall Street will be a crater.
- jimswhims 3y agoYep, need that robust barter economy to support the production of sticks and stones for WWIV :-)
- kelseyfrog 3y agoIt's easier to imagine the end of the world than the end of investing.
- fatherzine 3y agoSocieties have failed to develop industrial scale investing for centuries. E.g. the Ottoman Empire and its successor states, due to high levels of endemic corruption. A societal trust/faith breakdown may indeed bring an end to investing as we know it. The countdown for the crumbling of the spiritual foundations of Western Civilization continues apace.
- FFP999 3y ago[dead]
- ParanoidAltoid 3y agoMost of us will be at home fighting about whether it should really be called WWIII, while only an unlucky few fight the actual war. Global capital will soldier on. There's different possible outcomes of course, but I believe only in the absolute worst case (dozens of nukes across Europe and North America) do the banks stop caring who owns Amazon, even if Amazon is manufacturing attack quadcopters.
- simonebrunozzi 3y agohttps://archive.ph/vxkts https://archive.ph/vxkts
- mo_42 3y agoEven in a WWIII scenario, there would be some form of economy. The composition of the GDP would drastically change. But there would still be demand for food and clothing and of course military goods etc. All these require capital for which investors will collect part of the profits. So I think a diversified portfolio would still be valid. Even if the stock markets would be closed for years, I could sleep well as some of my companies will go bankrupt and others will have much higher profits.
- TheOtherHobbes 3y agoThe composition of GDP wouldn't change, it would disappear. The demand for clothing and food would be defined by violence, not by markets. (Although you could argue that markets are the same kind of violence, but in a very abstracted form.)
- gpderetta 3y agoIn case of a major total war, any participant in the conflict would very likely quickly switch to a war economy, in practice a centrally planned economy. I'm sure there would still be ample opportunity for profiteering before the nuclear holocaust for the dedicated individual, but personally the return of investment would be the last of my worries.
- kelseyfrog 3y agoCouldn't this easily be solved with a WW3 prediction market? Why try to find proxies for such an event when one could speculate on the outcome directly? It's simply a more efficient market.
- sgjohnson 3y ago> Couldn't this easily be solved with a WW3 prediction market? Why try to find proxies for such an event when one could speculate on the outcome directly? It's simply a more efficient market. Deep OTM calls on VIX (ETF ticker $UVXY) would be something similar to that. If WW3 happens, VIX will skyrocket. Furthest expiry available as of today for $UVXY options is Jan 16, 2026.
- gpderetta 3y agoThe counterparty risk would also skyrocket. Although you could try to collect your dues at the rubbles of the clearing house
- crazygringo 3y agoI think a prediction market would suffer from the same problem as regular markets: if everyone dies in a fiery nuclear conflagration, nobody's going to collect on either side. By definition, a prediction market doesn't work if one side is betting on the prediction market ceasing to exist.
- dhfbshfbu4u3 3y agoThink of the trust fund children.
- mikewarot 3y agoIf we get to WW3, It all depends on how well the Soviet Union's massive nuclear arms stockpile has held up under 30+ years without maintenance. If more than 1% work, there won't be a world economy. If more than 10% work, we're back down to the few handfuls of survivors who luck out with regards to fallout, etc. However, if the US isn't willing to wait long enough to find out, and launch the US stockpile first... it's game over.
- shrimp_emoji 3y agoNah. There will be many survivors, even in the worst case. Realistically, nuclear war is not an extinction threat. For that, you need heavier stuff like antimatter missiles or engineered pandemics.
- mikewarot 3y agoI think that thousands of MRVs hitting targets around the world is bound to throw enough stuff into the stratosphere to disrupt agriculture, and push cancer rates through the roof for survivors. As for pandemics, Fauci's deadly toy was just stupidity at work(take a "safe" organism, and make it deadly, but do it in a BSL2 lab, instead of a BSL4 lab), not some grand plan. A planned release of something deliberately deadly would decimate humanity before the mutations hit.
- teekert 3y agoThere is a very delicate balance between how easily a virus spreads and how well it kills. The best spreading virus has you running around joyfully coughing in everyone's face (like common cold). The best killers die out, because you can't really infect anyone when you're dead (like Ebola). Maybe a virus can be truly airborne (not in aerosols, which do hit the floor or dry out), have a very delayed onset, such that if infects billions and then kills... But we haven't seen this in nature so I'm not really expecting us human to create something so advanced and complex in its behavior.
- gmuslera 3y agoThere had been rumors about doomsday devices in the past. But even without that, second and third order effects should be counted too. At least for big or widespread enough events, because we live in a complex system.
- codr7 3y agoBecause the most interesting thing about WW3 is how to make a profit from it? Who are these people? And what kind of society produces them?
- ryaneager 3y agoThey are capitalist and capitalism produces them.
- golergka 3y agoSociety that wants it's elderly and war veterans to live on something without having to work. An average "investor" is an ordinary person with a savings and a pension. Professional investors mostly manage their money.
- codr7 3y agoAnd that wouldn't be a problem; neither would making sure everyone has food, a roof over their heads and access to health care. But some people just need a hundred sailing boats and mansions, and wouldn't mind WW3 if it allowed them to get a few more. It's like any other religion, once you cross over into fundamentalist, it becomes a disease.
- jrsj 3y agoUnderstanding financial implications of this isn’t the same as trying to profit from it. With something this catastrophic you aren’t really likely to anyways. But considering it & preparing to at least remain solvent somehow isn’t necessarily a bad/immoral thing to do
- codr7 3y agoThat time would be a hell of a lot better invested learning how to clean your own water and grow your own food. And figure out ways to avoid going there at all. Who TF cares about the stock market? Most likely even gold isn't going to get you very far at that point.
- sgjohnson 3y ago
- rhelz 3y agoThis article is insane, there's no other word for it. If anybody even survived WWIII, it would be to a life which was not even worth living. There wouldn't be anything like investors after WWIII. To all those billionaires building bunkers: what, exactly, are you going use to pay your guards with, which is more valuable than what they are guarding? How are you even going to get to your bunker? Call an Uber? Speculations as to what this would mean to your portfolio indicate a mentality so far out of touch with reality that as to be indistinguishable from the ravings of a lunatic.
- joshmarinacci 3y agoI feel like you didn't read the article. The article is not about profits or millionaires building bunkers. This is about whether markets are good at predicting a future war. Looking at WWI and WWII suggest they aren't, and we could be a lot closer to WWIII than current market stability suggests.
- rhelz 3y agosigh perhaps this was an overreaction. How about we nuke clickbait titles?
- goodroot 3y agoWe know it's clickbait. But we click it anyways. Alas!
- crazygringo 3y agoThere are some comments here critical of the article (calling it insane, asking how dare people ask how to make a profit off of WWIII), but they seem to be misunderstanding it entirely. This isn't an article about how to make money off of WWIII, and it goes out of its way to "of course place financial damage a long way down the list of horrors." The article is actually about how the degree of current political instability that could lead to a WWIII-type situation isn't reflected in current markets at all, and so raises the important question: 1) Are markets correct, and there isn't really any risk of WWIII right now? Is it all unwarranted fear and hype? 2) Or is there a real risk of WWIII, but markets are bad at predicting geopolitical disruption of that potential magnitude? The article then concludes that the second position is more likely -- don't use a lack of market movement to underestimate the potential for global war, as if it were an accurate prediction market. Because in an actual nuclear war, financial markets cease to mean anything at all.
- sgjohnson 3y ago> Because in an actual nuclear war, financial markets cease to mean anything at all. That would largely depend on the sides getting hit with the nukes.
- zabzonk 3y agoum, all of them?
- ajsnigrutin 3y agoBefore nukes, with conventional weapons... sure... with enough nukes... we're all fucked, no matter how far away from the targets you are.
- rhelz 3y agoAnybody within hundreds of miles of New York, London, Frankfurt, and Shanghai would be dead. That's just 4 h-bombs, and thousands would be exploded. Get a grip man, any war between any two nuclear powers simply cannot be priced into markets. Surely to determine a market price for anything presupposes the existence of the market.
- 303uru 3y agoSure seems like the powers that be want this to turn into something much bigger. A lot of saber rattling and egging on coming from capital. Their unicorns are all spent, so I guess their next target is profiting off large swaths of the world population dying?
- deleted 3y ago[deleted]
- willprice89 3y agoOf all post-nuclear-apocalypse stories I've seen or read, I think the movie Threads (1984) (https://www.youtube.com/watch?v=vgT4Y30DkaA https://www.youtube.com/watch?v=vgT4Y30DkaA) does the best job hammering home just how miserable and hopeless life will be for everyone except a tiny fraction of lucky and privileged survivors. Maybe those are the people who will still be worrying about investments after WW3...
- seydor 3y agoLet's not forget that world wars leveled inequality and gave alive people a more equal and fair economy.
- joshmarinacci 3y agoDespite the headline, this article is not about profits to investors. It's asking if markets are good at predicting future wars. Research suggests they aren't. Markets were flying high right up until the start of WW1, despite the underlying tensions growing for years before hand. This means we could be closer to a future war than the current market suggests. Please read the article, not the headline.
- zabzonk 3y agowon't all evidence of their investment either have been vaporised or wiped by emp?
- akayconsult 3y agoDepends on the outcome of WW3: is it going to be a MAD (Mutually Annihilated Destruction)outcome where only losers survive or is there a single clear winner with the sole reset button. Empirical from the past 2 world wars, opportunities abound from destructions; but only up to a point; push beyond its tipping point of MAD, the Ecclesiastical meaningless, everything is meaningless would come to past.