June 19, 2025 • 25 mins
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The complex dynamics of the Israel-Iran conflict have broad implications for global stability and investment strategies as Israel conducts preemptive strikes against Iran's alleged nuclear weapons program.
• Israel claims Iran is developing nuclear weapons despite Iran's insistence that its nuclear program is for civilian use
• Iran's enrichment of uranium to near weapons-grade levels contradicts their civilian energy claims
• Religious divisions between Shia groups (Hezbollah, Iranian government) and Sunni entities (Hamas, Gulf states) complicate regional dynamics
• Global powers like China and Russia maintain loose alliances with Iran while avoiding direct military confrontation
• Probability of US using bunker-busting bombs on Fordow plant estimated at 60%
• Iranian retaliation could involve cyber attacks rather than conventional military responses
• Investors should consider reducing exposure to transportation and automotive sectors if oil prices rise
• Defensive portfolio positioning with lower beta stocks, reasonable valuations, and gold allocation recommended
• Turning off sensationalist news helps maintain investment discipline in uncertain times
• Focus on quality and value investments for long-term success despite geopolitical tensions
Join us next time as we discuss Canada as a resource to the north and examine the role of news media in shaping public perception.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Stephen Davenport (00:02):
Hello everyone and welcome to
Skeptic's Guide to Investing.
I'm Steve Davenport and I'mhere with Clem Miller and today
we're going to talk about what'shappening in the skies.
And I'm talking about the skiesover Iran and Israel because,
as you've probably heard,there's activity going on where
(00:22):
Israel is preemptively strikingIran because they believe
they're getting too far advancedon their nuclear proliferation
and their ability to put anddevelop nuclear arms.
They say they're developing allthis nuclear for consumer use.
So this has been a long timecoming.
(00:44):
Israel has been saying andthreatening they were going to
do something, and now it's aquestion about will the US
provide bunker busting bombsthat will go to the underground
facilities that are the nuclearheadquarters for Iran?
(01:05):
I guess, when I think aboutthis, my wife and some other
people have asked can you giveme the five minute version of
what this is all about and Ithink it's a nice way to kind of
think about it becauserealistically, our lives are
getting pretty complicatedbetween all the Ukraine and
(01:26):
Israel and Taiwan and all thedifferent challenges with
tariffs and everything elsegoing on Clint, can you give me
Iran, Israel five minutes andtell me what this is really
about and where it's going to go?
Clement Miller (01:53):
Sure, so in my mind, Iran, and in many people's
minds Iran, is building,developing a nuclear weapons
program, and it's been doing sofor decades.
And I think that it's clearthat this is the case because,
first of all, Iran is a countrythat has a lot of energy
resources, so why do they alsoneed nuclear energy resources?
(02:17):
Secondly, they have have gonedown the route of enrichment to
higher levels of power for theiruranium that take it up to near
weapons grade, and also, at onepoint they were developing
plutonium capability as well.
(02:38):
So I think if you have acountry that is just focused on
on nuclear power, they don'tneed to do all that enrichment
and uh and plutonium.
They just don't need to do that.
So in my mind, there's no doubtthat they're pursuing a nuclear
weapons program.
Uh, perhaps they made adecision not to go all the way,
(03:01):
but maybe only to 95%, you know,pending other developments in
the Middle East, but in my mindthere's no doubt that they're
developing nuclear weapons.
On the other hand, you know, asI was sort of implying, I think
that it's not clear to me thatthey are right on the cusp of
(03:23):
developing one of uh, ofactually having the weapons
themselves.
Benjamin Netanyahu has beentalking about how, talking for
like 15 years, about how iran isweeks away from a nuclear
weapon.
So what makes it differenttoday versus you know, 15 years
ago is a key question, and Ithink what makes it different
(03:43):
today versus you know, 15 yearsago is a key question.
And I think what makes itdifferent is that Israel has had
some success in suppressingsome of Iran's allies in the
Middle East.
So, you know, taking actionagainst Hezbollah, for example,
(04:03):
taking action against Hamas,taking action to some degree
against the Houthis.
So I think this is I think thisis, you know, Israel views this
as an opportune time to attackIran and try to get rid of that
nuclear weapons capability ordeveloping nuclear weapons
(04:24):
capability.
Now the problem let me just takeone more minute, steve.
The problem is that you can'tdestroy Iran's nuclear weapons
capability without having anability to destroy the
capability that's buried deepunderground, and Israel just
doesn't have the weapons forthat.
(04:45):
So they have to turn to the USin order to bomb that facility.
Otherwise, iran can still bemonths away, so to speak, from a
nuclear weapon, and in fact,they'd have even more incentive
to develop one, given thatthey've recently been attacked
(05:06):
incentive to develop one, giventhat they've recently been
attacked.
So Netanyahu is putting a lot ofpressure on Trump in order to
have Trump enter the war, atleast to the extent of using a
B-2 bomber to drop that.
You know, bomber busting,bunker busting, bomb on the
Fordow complex that's burieddeep under the mountains.
(05:26):
And then the very last thing Iwould say, steve, is that is
that Netanyahu has actuallyramped up his rhetoric, not just
about taking out the nuclearcapability, but he's also
talking about regime change inIran.
And that's what's reallydangerous for the United States,
because if the United Statesgets involved in trying to do
(05:48):
regime change, we're going to bedragged into an Iraq or
Afghanistan situation whichcould persist for years and
years and years.
David Schoenfeld, yeah, that'swhat I.
Stephen Davenport (05:58):
I was just going to say that if we could
define those words for peopleout there.
I mean, the Houthis are a groupof Shia rebels who are fighting
in Yemen.
Hamas, as we know, was fightingin Israel as a terrorist group
in Palestine and Hezbollah is Iwas trying to look up is
(06:23):
Hezbollah Shia as well?
Clement Miller (06:25):
Hezbollah is Shia, hamas is Sunni.
Okay, but they're you know,they're aligned with Iran.
Hezbollah is Shia and is agroup in southern Lebanon Right.
Stephen Davenport (06:43):
I was trying to picture this.
It's not just countries andit's not just what's happening
in the nuclear program today.
These are religious groups whoare motivated by religion, not
by country, and they feel thatthis is bringing back the area
that's sacred to them.
Clement Miller (07:04):
And when we talk about sacred ground, we're
usually talking about Jerusalem,and we're talking about
jerusalem being important tochristians, important to jews
and important to um muslims aswell yeah, but and it's not just
a um, it's not just an iranversus israel thing uh, the
(07:28):
sunni countries, the sunni-ledgovernments in the Middle East,
namely the Gulf states and Iraq,you know Saudi, jordan, not
Iraq sorry, iraq is led by Shiamajority, but Jordan is Sunni,
saudi is Sunni.
Kuwait, uae, qatar, oman thosecountries all have strained
(07:53):
relationships with Iran as welland so there's a complexity
(08:15):
there in in those countries willbe potentially under attack and
that could have collateraldamage for people and property
and infrastructure in SaudiArabia, kuwait, iraq, qatar, etc
.
Stephen Davenport (08:34):
Yes, I think that when I think about this, we
think about Israel as thecenter, but in reality oil is at
the center as well.
Right, some people like tocharacterize this as one group
is persecuting another group andwe need to stop the persecution
.
Others take a more economicview and say it's all about the
(08:58):
oil and it's all aboutcontrolling the oil and
controlling the flow of moneyand resources to the Middle East
.
Saudi Arabia, the largestproducer, therefore probably the
most powerful.
They have an opinion about whois going to succeed, and they
were getting very close to apeace deal with Israel and some
(09:18):
people felt that's why we hadthe October events.
They were trying to disruptthat peace deal from happening
because if it happened, it couldmean that Israel and the
countries would settle down andthere would be a cooperation
that had never existed in theMiddle East.
And the people who obviouslywant change, they're not all for
(09:42):
that cooperation thing.
So I think there's twodimensions at least.
First is country, second isreligion, third is oil.
Second is religion, third isoil.
And then we've got the bigthree or the other world powers,
who all depend upon energy tosome degree and have a secondary
(10:04):
interest in this fight and Idon't know right now.
Russia, I think, has enoughgoing on with the Ukraine, but
you know Russia has beensupported by some drones from
Iran.
I think that they also have hadrelations in the past and their
competitors in selling oil onthe black market, but it feels
(10:28):
like I would say that China andRussia are both behind Iran.
Is that a safe assumption?
Clement Miller (10:39):
Well, I mean, there's been, you know, some
trade that's occurred amongRussia, China and Iran, because
they're all sort of in that axis.
I don't want to call it axis ofevil, but it's.
Stephen Davenport (10:54):
Axis of not nice they're all allies.
Clement Miller (10:57):
They're all allies Iran, russia and China
and you might be able to throwNorth Korea into that but that
doesn't mean that they're allcompletely strategically aligned
.
If Iran is attacked, russia isnot going to come to its aid,
china is not going to come toits aid.
So it's not a complete alliancelike a NATO type alliance where
(11:24):
there's a commitment to atleast on paper, a commitment to
come to each other's aid.
Stephen Davenport (11:31):
I don't know the numbers exactly, but I know
that Iran supplies China andRussia supplies China with oil.
Clement Miller (11:37):
Do you?
Stephen Davenport (11:38):
know how much like is is.
It feels to me like China wouldbe just a little more
interested in Iran, because withthe problems with Russia and
Ukraine, if you take Iran out ofthe, the one thing I found
interesting with Israel is theyhave not destroyed the oil
(11:58):
producing facilities, they'reonly destroying nuclear.
And I wonder first of all, doesthat go on forever?
And the minute you do that tothe oil facilities, does that
suddenly make China's ears go upand go oh wait, a minute.
Clement Miller (12:14):
Yeah.
Stephen Davenport (12:14):
You can do what you want for nuclear, but
we're using that oil and you'remaking our country you know more
at risk.
Clement Miller (12:22):
I think they had some attacks on oil facilities,
but not in an overlydevastating way, because I think
the Israelis are mindful ofthat.
They, you know, they don't wantto have too many enemies on
this.
You know, right now, I thinkyou know, you've got a lot of
(12:43):
countries that are willing tolook the other way with regard
to Israel's attack on Iran.
Stephen Davenport (12:53):
Yeah, I guess the point is um will they look
the other way if we provide thebunker busting bomb, and what do
you think?
The probability is that we dogo ahead and provide the
resources to get rid of thisfederal facility.
Clement Miller (13:09):
Well, I.
So I think that there's about a60% chance that we'll drop a
bomb on a bunker-busting bomb,on Fardo.
60% chance, now, why do I sayonly 60% when there's a huge ton
(13:31):
of pressure from the Israelison Trump to try to do that?
So why do I say only 60 percent?
Because, first of all, his, hisMAGA coalition is split between
those who are willing to dothat and those who are not
willing to do that.
So it's split.
So that's first of all.
Second of all, I don't thinkthere's complete certainty as to
(13:58):
whether that bunker bustingbomb would actually work, uh, in
terms of destroying thatfacility.
It may be a failure.
Stephen Davenport (14:02):
that's what I was wondering is that somebody
told me that they've alreadybeen doing this so long that
they're they're diversified andthat they're not all in one
facility and that even if itwere successful, it might not
the key elements can be moved.
And I think another item that Ifound interesting is that they
don't think they can deliver anuclear weapon via a missile,
(14:26):
because you have to have acertain amount of stability on
the uranium that they haven'tachieved to put it in a nuclear
head.
But they do have the ability toput it in a nuclear head, but
they do have the ability to putit in a suitcase bomb.
So that's what I.
I don't worry about deliveringit via missile, because it
doesn't sound like they havethat capability.
I worry about the capabilitythey most likely have, which is
(14:51):
putting it in some type of avehicle or some type of a box
and delivering it to somepopulation head.
That would shake up the world,that's what I worry about.
Clement Miller (15:04):
Well, yeah, I mean, and a variation of what
you're saying, is the so-calleddirty bomb.
If you remember that from thewhole, you know right after 9-11
.
Yeah, the idea of puttingradiological material into a
conventional explosive.
So it's not a fission bomb or afusion bomb, it's actually just
(15:28):
, you know, spreading radiationthrough a conventional explosive
and that was a concern backwhen after 9-11.
And you know, certainly thetechnology is there and it's
fairly easy to to do that.
Stephen Davenport (15:45):
Yeah, I mean, I think that you know.
When people say they're worriedon the news, I like to ask them
specifically as investors,we're trying to figure out what
specifically is going to beaffected.
And when people say terror willreign, you know Iran says
terror will reign in the US ifthey get involved in us.
Well, tell me exactly what kindof terror are we talking here?
(16:08):
Is it that we're going to havepeople trying to fly planes into
buildings again?
Is it that we're going to tryto have people use nuclear
weapons against us?
Is it that we're going to haveinternal terrorist groups in the
United States who are going toI mean, I no.
Clement Miller (16:27):
Well, I think the easiest thing for Iran to do
in order to be disruptive tothe US is cyber attacks, and
they have a very sophisticatedcyber attack capability and no
doubt they've been trying tohone it in order to, you know,
in order to make this happen.
Stephen Davenport (16:46):
Yeah, I think it's strange.
You know, two weeks ago we wereworried about protests in LA.
Now we're worried aboutpotentially, you know, all of
these countries becoming engagedin a long term conflict.
It feels like all of the talktough Trump didn't really
deliver when he said nobodywould do that because they'd be
(17:06):
too afraid of my reaction.
They wouldn't have invadedUkraine if I was president.
Well, it feels like you know youdidn't frighten Israel enough,
that they didn't want to act,and you're not frightening
anybody now because Iran isacting and Iran is making
threats against us, against us.
(17:32):
So it feels like that.
You know, I don't know whattype of president is really
going to succeed in thisinstance.
I think about you, know Carterand Sadat, and I think about
other people and how they'vetried to resolve these problems,
and it just seems to come downto you need to have people on
both sides who want to work, andNetanyahu is not somebody who
(17:54):
really wants to work towardspeace, because I think his
voters and his followers believea military solution is the
answer.
Clement Miller (18:02):
His narrow coalition depends on the support
of extremists and war hawks,and that's the only way he stays
in power, because the majorityof the Israeli population does
(18:22):
not support Netanyahu.
Stephen Davenport (18:25):
I agree.
It's a strange thing when hismain partner is a religious
group that doesn't believe inwar and allows their members to
not fight.
So, basically, the rest of thecountry is fighting the war that
Netanyahu wants them to fight,and the group that is voting for
this war is a group thatpersonally believes that they
shouldn't participate in war, asa group that personally
(18:46):
believes that they shouldn'tparticipate in war.
So I don't know how religiousgymnastics work, but I can see
that this is twisting into quitea circle.
But this is about investments.
So what do you think you needto do now, glenn, that this has
(19:10):
happened, before it becomes moreinflamed, to do to your
portfolios to try to make surethat one you know, I hate to say
benefit from war and higherenergy prices, but I think it's
about hedging your exposure to apart of the economy that you
might not like from anenvironmental standpoint.
But I mean, do you buy more natgas because you think oil is
(19:31):
going to be harder to get andtherefore people are going to
transfer some of those utilitiesto nat gas, away from coal, and
not use oil anymore?
What do you think happens toour portfolios because of this
if it gets worse?
Clement Miller (19:48):
So, first of all , on the energy front, what
we're talking about here ispotentially higher oil prices,
which really isn't so relevantfor the power sector but is much
more relevant for the autosector and for transportation in
(20:14):
general, and so I think thebest thing to do right now is to
sort of shy away from autostocks, shy away from
transportation stocks.
So I think that's a smart move.
Stocks so I think I thinkthat's a smart move.
(20:35):
I think that it's questionablewhether energy stocks benefit or
not, because energy stocks youknow a lot of energy companies,
you know they they make theirmoney on the margins right
Between refined product pricesand crude oil prices, and so if
crude oil prices go up, thentheir margins might shrink.
Also, it's a very complicatedthing to analyze because there's
(20:58):
actually different kinds of oil, different weights of oil, and
so different companies, energycompanies, use different weights
of oil from different sources.
So it's actually a verydifficult thing to analyze that.
I think that what we're seeingrecently, over the last few
months, ever since the tariffsdelays were put in place or we
(21:26):
could call them the taco delaysright Ever since taco has
happened, we've seen somebenefits to the tech sector.
So I think we've.
I think we're seeing some, youknow some recovery there and I
think that's a good place to be,uh, in those stocks, uh, and
(21:47):
you know sort of the return ofthe AI theme to some degree, um,
but also I think that it'simportant to have, um, most of
your portfolio be somewhatdefensive in nature.
So lower beta, uh, you know thethings I've talked about in the
past on this.
(22:07):
You know lower beta, lower pegratios, lower short interest,
because you know the shortsellers are identifying where
the risks are, and and also Ithink it's important to have a
lot of gold in your portfolio,to have a lot of gold in your
portfolio.
Stephen Davenport (22:28):
So well, I think those are all good
thoughts.
My summary for investors wouldbe be comfortable with what you
own.
I think that there's going tobe a lot of news and a lot of
headlines, and we're going to doa piece on news coming up.
News is it really changing oris it really relevant?
And I think that when we lookat things, we want to turn the
(22:52):
TV off, and I know that as aperson that loves information
and loves to use data to try tomake better decisions.
There is a point at which wehave to realize that some of the
extreme comments coming out ofFox and other networks are
(23:12):
really not there to help you asan investor or help you as an
individual.
They're there to cause strifeand they're there to cause angst
and they're there to cause anincrease in ratings.
So the biggest thing I can sayfor people to do is find a way
to step back and be patient.
(23:33):
Patient investors, investors ofquality, investors of value,
are going to be rewarded.
So stay the course and don'tget too distracted by what's
happening on the news.
Anything else to end with BobNope, that's it All right
everybody.
Thank you for listening and wereally appreciate your support
(23:56):
and we want to remind you pleaseshare any comments, likes and
let us know what you think.
Our next episode is going to beon Canada a resource to the
north.
Clem just got back from a longjourney and we're looking
forward to talking about thatand the news media.
So thank you for listening andhave a great day.
Hello everyone and welcome to
Skeptic's Guide to Investing.
I'm Steve Davenport and I'mhere with Clem Miller and today
we're going to talk about what'shappening in the skies.
And I'm talking about the skiesover Iran and Israel because,
as you've probably heard,there's activity going on where
(00:22):
Israel is preemptively strikingIran because they believe
they're getting too far advancedon their nuclear proliferation
and their ability to put anddevelop nuclear arms.
They say they're developing allthis nuclear for consumer use.
So this has been a long timecoming.
(00:44):
Israel has been saying andthreatening they were going to
do something, and now it's aquestion about will the US
provide bunker busting bombsthat will go to the underground
facilities that are the nuclearheadquarters for Iran?
(01:05):
I guess, when I think aboutthis, my wife and some other
people have asked can you giveme the five minute version of
what this is all about and Ithink it's a nice way to kind of
think about it becauserealistically, our lives are
getting pretty complicatedbetween all the Ukraine and
(01:26):
Israel and Taiwan and all thedifferent challenges with
tariffs and everything elsegoing on Clint, can you give me
Iran, Israel five minutes andtell me what this is really
about and where it's going to go?
Clement Miller (01:53):
Sure, so in my mind, Iran, and in many people's
minds Iran, is building,developing a nuclear weapons
program, and it's been doing sofor decades.
And I think that it's clearthat this is the case because,
first of all, Iran is a countrythat has a lot of energy
resources, so why do they alsoneed nuclear energy resources?
(02:17):
Secondly, they have have gonedown the route of enrichment to
higher levels of power for theiruranium that take it up to near
weapons grade, and also, at onepoint they were developing
plutonium capability as well.
(02:38):
So I think if you have acountry that is just focused on
on nuclear power, they don'tneed to do all that enrichment
and uh and plutonium.
They just don't need to do that.
So in my mind, there's no doubtthat they're pursuing a nuclear
weapons program.
Uh, perhaps they made adecision not to go all the way,
(03:01):
but maybe only to 95%, you know,pending other developments in
the Middle East, but in my mindthere's no doubt that they're
developing nuclear weapons.
On the other hand, you know, asI was sort of implying, I think
that it's not clear to me thatthey are right on the cusp of
(03:23):
developing one of uh, ofactually having the weapons
themselves.
Benjamin Netanyahu has beentalking about how, talking for
like 15 years, about how iran isweeks away from a nuclear
weapon.
So what makes it differenttoday versus you know, 15 years
ago is a key question, and Ithink what makes it different
(03:43):
today versus you know, 15 yearsago is a key question.
And I think what makes itdifferent is that Israel has had
some success in suppressingsome of Iran's allies in the
Middle East.
So, you know, taking actionagainst Hezbollah, for example,
(04:03):
taking action against Hamas,taking action to some degree
against the Houthis.
So I think this is I think thisis, you know, Israel views this
as an opportune time to attackIran and try to get rid of that
nuclear weapons capability ordeveloping nuclear weapons
(04:24):
capability.
Now the problem let me just takeone more minute, steve.
The problem is that you can'tdestroy Iran's nuclear weapons
capability without having anability to destroy the
capability that's buried deepunderground, and Israel just
doesn't have the weapons forthat.
(04:45):
So they have to turn to the USin order to bomb that facility.
Otherwise, iran can still bemonths away, so to speak, from a
nuclear weapon, and in fact,they'd have even more incentive
to develop one, given thatthey've recently been attacked
(05:06):
incentive to develop one, giventhat they've recently been
attacked.
So Netanyahu is putting a lot ofpressure on Trump in order to
have Trump enter the war, atleast to the extent of using a
B-2 bomber to drop that.
You know, bomber busting,bunker busting, bomb on the
Fordow complex that's burieddeep under the mountains.
(05:26):
And then the very last thing Iwould say, steve, is that is
that Netanyahu has actuallyramped up his rhetoric, not just
about taking out the nuclearcapability, but he's also
talking about regime change inIran.
And that's what's reallydangerous for the United States,
because if the United Statesgets involved in trying to do
(05:48):
regime change, we're going to bedragged into an Iraq or
Afghanistan situation whichcould persist for years and
years and years.
David Schoenfeld, yeah, that'swhat I.
Stephen Davenport (05:58):
I was just going to say that if we could
define those words for peopleout there.
I mean, the Houthis are a groupof Shia rebels who are fighting
in Yemen.
Hamas, as we know, was fightingin Israel as a terrorist group
in Palestine and Hezbollah is Iwas trying to look up is
(06:23):
Hezbollah Shia as well?
Clement Miller (06:25):
Hezbollah is Shia, hamas is Sunni.
Okay, but they're you know,they're aligned with Iran.
Hezbollah is Shia and is agroup in southern Lebanon Right.
Stephen Davenport (06:43):
I was trying to picture this.
It's not just countries andit's not just what's happening
in the nuclear program today.
These are religious groups whoare motivated by religion, not
by country, and they feel thatthis is bringing back the area
that's sacred to them.
Clement Miller (07:04):
And when we talk about sacred ground, we're
usually talking about Jerusalem,and we're talking about
jerusalem being important tochristians, important to jews
and important to um muslims aswell yeah, but and it's not just
a um, it's not just an iranversus israel thing uh, the
(07:28):
sunni countries, the sunni-ledgovernments in the Middle East,
namely the Gulf states and Iraq,you know Saudi, jordan, not
Iraq sorry, iraq is led by Shiamajority, but Jordan is Sunni,
saudi is Sunni.
Kuwait, uae, qatar, oman thosecountries all have strained
(07:53):
relationships with Iran as welland so there's a complexity
(08:15):
there in in those countries willbe potentially under attack and
that could have collateraldamage for people and property
and infrastructure in SaudiArabia, kuwait, iraq, qatar, etc
.
Stephen Davenport (08:34):
Yes, I think that when I think about this, we
think about Israel as thecenter, but in reality oil is at
the center as well.
Right, some people like tocharacterize this as one group
is persecuting another group andwe need to stop the persecution
.
Others take a more economicview and say it's all about the
(08:58):
oil and it's all aboutcontrolling the oil and
controlling the flow of moneyand resources to the Middle East
.
Saudi Arabia, the largestproducer, therefore probably the
most powerful.
They have an opinion about whois going to succeed, and they
were getting very close to apeace deal with Israel and some
(09:18):
people felt that's why we hadthe October events.
They were trying to disruptthat peace deal from happening
because if it happened, it couldmean that Israel and the
countries would settle down andthere would be a cooperation
that had never existed in theMiddle East.
And the people who obviouslywant change, they're not all for
(09:42):
that cooperation thing.
So I think there's twodimensions at least.
First is country, second isreligion, third is oil.
Second is religion, third isoil.
And then we've got the bigthree or the other world powers,
who all depend upon energy tosome degree and have a secondary
(10:04):
interest in this fight and Idon't know right now.
Russia, I think, has enoughgoing on with the Ukraine, but
you know Russia has beensupported by some drones from
Iran.
I think that they also have hadrelations in the past and their
competitors in selling oil onthe black market, but it feels
(10:28):
like I would say that China andRussia are both behind Iran.
Is that a safe assumption?
Clement Miller (10:39):
Well, I mean, there's been, you know, some
trade that's occurred amongRussia, China and Iran, because
they're all sort of in that axis.
I don't want to call it axis ofevil, but it's.
Stephen Davenport (10:54):
Axis of not nice they're all allies.
Clement Miller (10:57):
They're all allies Iran, russia and China
and you might be able to throwNorth Korea into that but that
doesn't mean that they're allcompletely strategically aligned
.
If Iran is attacked, russia isnot going to come to its aid,
china is not going to come toits aid.
So it's not a complete alliancelike a NATO type alliance where
(11:24):
there's a commitment to atleast on paper, a commitment to
come to each other's aid.
Stephen Davenport (11:31):
I don't know the numbers exactly, but I know
that Iran supplies China andRussia supplies China with oil.
Clement Miller (11:37):
Do you?
Stephen Davenport (11:38):
know how much like is is.
It feels to me like China wouldbe just a little more
interested in Iran, because withthe problems with Russia and
Ukraine, if you take Iran out ofthe, the one thing I found
interesting with Israel is theyhave not destroyed the oil
(11:58):
producing facilities, they'reonly destroying nuclear.
And I wonder first of all, doesthat go on forever?
And the minute you do that tothe oil facilities, does that
suddenly make China's ears go upand go oh wait, a minute.
Clement Miller (12:14):
Yeah.
Stephen Davenport (12:14):
You can do what you want for nuclear, but
we're using that oil and you'remaking our country you know more
at risk.
Clement Miller (12:22):
I think they had some attacks on oil facilities,
but not in an overlydevastating way, because I think
the Israelis are mindful ofthat.
They, you know, they don't wantto have too many enemies on
this.
You know, right now, I thinkyou know, you've got a lot of
(12:43):
countries that are willing tolook the other way with regard
to Israel's attack on Iran.
Stephen Davenport (12:53):
Yeah, I guess the point is um will they look
the other way if we provide thebunker busting bomb, and what do
you think?
The probability is that we dogo ahead and provide the
resources to get rid of thisfederal facility.
Clement Miller (13:09):
Well, I.
So I think that there's about a60% chance that we'll drop a
bomb on a bunker-busting bomb,on Fardo.
60% chance, now, why do I sayonly 60% when there's a huge ton
(13:31):
of pressure from the Israelison Trump to try to do that?
So why do I say only 60 percent?
Because, first of all, his, hisMAGA coalition is split between
those who are willing to dothat and those who are not
willing to do that.
So it's split.
So that's first of all.
Second of all, I don't thinkthere's complete certainty as to
(13:58):
whether that bunker bustingbomb would actually work, uh, in
terms of destroying thatfacility.
It may be a failure.
Stephen Davenport (14:02):
that's what I was wondering is that somebody
told me that they've alreadybeen doing this so long that
they're they're diversified andthat they're not all in one
facility and that even if itwere successful, it might not
the key elements can be moved.
And I think another item that Ifound interesting is that they
don't think they can deliver anuclear weapon via a missile,
(14:26):
because you have to have acertain amount of stability on
the uranium that they haven'tachieved to put it in a nuclear
head.
But they do have the ability toput it in a nuclear head, but
they do have the ability to putit in a suitcase bomb.
So that's what I.
I don't worry about deliveringit via missile, because it
doesn't sound like they havethat capability.
I worry about the capabilitythey most likely have, which is
(14:51):
putting it in some type of avehicle or some type of a box
and delivering it to somepopulation head.
That would shake up the world,that's what I worry about.
Clement Miller (15:04):
Well, yeah, I mean, and a variation of what
you're saying, is the so-calleddirty bomb.
If you remember that from thewhole, you know right after 9-11
.
Yeah, the idea of puttingradiological material into a
conventional explosive.
So it's not a fission bomb or afusion bomb, it's actually just
(15:28):
, you know, spreading radiationthrough a conventional explosive
and that was a concern backwhen after 9-11.
And you know, certainly thetechnology is there and it's
fairly easy to to do that.
Stephen Davenport (15:45):
Yeah, I mean, I think that you know.
When people say they're worriedon the news, I like to ask them
specifically as investors,we're trying to figure out what
specifically is going to beaffected.
And when people say terror willreign, you know Iran says
terror will reign in the US ifthey get involved in us.
Well, tell me exactly what kindof terror are we talking here?
(16:08):
Is it that we're going to havepeople trying to fly planes into
buildings again?
Is it that we're going to tryto have people use nuclear
weapons against us?
Is it that we're going to haveinternal terrorist groups in the
United States who are going toI mean, I no.
Clement Miller (16:27):
Well, I think the easiest thing for Iran to do
in order to be disruptive tothe US is cyber attacks, and
they have a very sophisticatedcyber attack capability and no
doubt they've been trying tohone it in order to, you know,
in order to make this happen.
Stephen Davenport (16:46):
Yeah, I think it's strange.
You know, two weeks ago we wereworried about protests in LA.
Now we're worried aboutpotentially, you know, all of
these countries becoming engagedin a long term conflict.
It feels like all of the talktough Trump didn't really
deliver when he said nobodywould do that because they'd be
(17:06):
too afraid of my reaction.
They wouldn't have invadedUkraine if I was president.
Well, it feels like you know youdidn't frighten Israel enough,
that they didn't want to act,and you're not frightening
anybody now because Iran isacting and Iran is making
threats against us, against us.
(17:32):
So it feels like that.
You know, I don't know whattype of president is really
going to succeed in thisinstance.
I think about you, know Carterand Sadat, and I think about
other people and how they'vetried to resolve these problems,
and it just seems to come downto you need to have people on
both sides who want to work, andNetanyahu is not somebody who
(17:54):
really wants to work towardspeace, because I think his
voters and his followers believea military solution is the
answer.
Clement Miller (18:02):
His narrow coalition depends on the support
of extremists and war hawks,and that's the only way he stays
in power, because the majorityof the Israeli population does
(18:22):
not support Netanyahu.
Stephen Davenport (18:25):
I agree.
It's a strange thing when hismain partner is a religious
group that doesn't believe inwar and allows their members to
not fight.
So, basically, the rest of thecountry is fighting the war that
Netanyahu wants them to fight,and the group that is voting for
this war is a group thatpersonally believes that they
shouldn't participate in war, asa group that personally
(18:46):
believes that they shouldn'tparticipate in war.
So I don't know how religiousgymnastics work, but I can see
that this is twisting into quitea circle.
But this is about investments.
So what do you think you needto do now, glenn, that this has
(19:10):
happened, before it becomes moreinflamed, to do to your
portfolios to try to make surethat one you know, I hate to say
benefit from war and higherenergy prices, but I think it's
about hedging your exposure to apart of the economy that you
might not like from anenvironmental standpoint.
But I mean, do you buy more natgas because you think oil is
(19:31):
going to be harder to get andtherefore people are going to
transfer some of those utilitiesto nat gas, away from coal, and
not use oil anymore?
What do you think happens toour portfolios because of this
if it gets worse?
Clement Miller (19:48):
So, first of all , on the energy front, what
we're talking about here ispotentially higher oil prices,
which really isn't so relevantfor the power sector but is much
more relevant for the autosector and for transportation in
(20:14):
general, and so I think thebest thing to do right now is to
sort of shy away from autostocks, shy away from
transportation stocks.
So I think that's a smart move.
Stocks so I think I thinkthat's a smart move.
(20:35):
I think that it's questionablewhether energy stocks benefit or
not, because energy stocks youknow a lot of energy companies,
you know they they make theirmoney on the margins right
Between refined product pricesand crude oil prices, and so if
crude oil prices go up, thentheir margins might shrink.
Also, it's a very complicatedthing to analyze because there's
(20:58):
actually different kinds of oil, different weights of oil, and
so different companies, energycompanies, use different weights
of oil from different sources.
So it's actually a verydifficult thing to analyze that.
I think that what we're seeingrecently, over the last few
months, ever since the tariffsdelays were put in place or we
(21:26):
could call them the taco delaysright Ever since taco has
happened, we've seen somebenefits to the tech sector.
So I think we've.
I think we're seeing some, youknow some recovery there and I
think that's a good place to be,uh, in those stocks, uh, and
(21:47):
you know sort of the return ofthe AI theme to some degree, um,
but also I think that it'simportant to have, um, most of
your portfolio be somewhatdefensive in nature.
So lower beta, uh, you know thethings I've talked about in the
past on this.
(22:07):
You know lower beta, lower pegratios, lower short interest,
because you know the shortsellers are identifying where
the risks are, and and also Ithink it's important to have a
lot of gold in your portfolio,to have a lot of gold in your
portfolio.
Stephen Davenport (22:28):
So well, I think those are all good
thoughts.
My summary for investors wouldbe be comfortable with what you
own.
I think that there's going tobe a lot of news and a lot of
headlines, and we're going to doa piece on news coming up.
News is it really changing oris it really relevant?
And I think that when we lookat things, we want to turn the
(22:52):
TV off, and I know that as aperson that loves information
and loves to use data to try tomake better decisions.
There is a point at which wehave to realize that some of the
extreme comments coming out ofFox and other networks are
(23:12):
really not there to help you asan investor or help you as an
individual.
They're there to cause strifeand they're there to cause angst
and they're there to cause anincrease in ratings.
So the biggest thing I can sayfor people to do is find a way
to step back and be patient.
(23:33):
Patient investors, investors ofquality, investors of value,
are going to be rewarded.
So stay the course and don'tget too distracted by what's
happening on the news.
Anything else to end with BobNope, that's it All right
everybody.
Thank you for listening and wereally appreciate your support
(23:56):
and we want to remind you pleaseshare any comments, likes and
let us know what you think.
Our next episode is going to beon Canada a resource to the
north.
Clem just got back from a longjourney and we're looking
forward to talking about thatand the news media.
So thank you for listening andhave a great day.
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