Episode summary
Dylan Jovine | Will the Market Crash? What History Tells Us About Stocks
Summary
Dylan Jovine argues that the market reaction to a wider war with Iran should be judged less by forecasts than by history. He says U.S. stocks have often sold off about 20% in the lead-up to war, then recovered over the following 12 months, but he thinks this situation is unusual because there has not been the same long public runway of preparation. That makes him lean toward a near-term risk-off tone and a biased-down market, even if history suggests a later recovery.
At the same time, he says the market is split between a shaky broad backdrop and very cheap individual names. He points to Amazon, Nvidia, Meta, and Microsoft as trading at levels he has not seen in years, and says biotech names like Merck and Glaxo also look extremely cheap. His view is that investors should be selective rather than make a blanket call on the whole market.
He also spends much of the episode warning about nuclear proliferation and the danger of underestimating it. He argues younger people do not grasp how destructive nuclear weapons are, and says the stakes are not abstract if a radical group were ever able to smuggle a weapon into the U.S. His broader point is that some threats are too serious to ignore, regardless of market noise.
Key takeaways
- Dylan Jovine says history shows U.S. markets often fall about 20% before war and then recover about 24% in the year after it begins.
- He thinks this Iran situation is different because the public has not had the same long psychological runway to prepare for war.
- Jovine expects the market to be biased downward in the near term, even if history points to a later rebound.
- He says Amazon, Nvidia, Meta, and Microsoft look unusually cheap, creating selective opportunities for investors.
- He also highlights Merck and Glaxo as examples of biotech names he считает extremely cheap.
Notable quotes
“I'm not arrogant or stupid enough to think that I can predict what happens in the markets”
“usually when this country has gone to war the market has sold off a 20% or thereabouts in the lead-up to war”
“after the war starts it tends to rise about 24% in the 12 months after the war started”
“If I had a gun to my head, I'd say probably more likely goes down or trends down, biased downward, biased downward, risk off for a little while”
“Amazon hasn't been this cheap again since 2008, since the great financial crisis”
How the episode opens
Good morning. This is Dylan Jovanev behind the markets, happy Friday. Today is Friday, April 3rd, and grateful to be here with you today.
You remember Andy Rooney who used to be on 60 Minutes, that old curmudgeon who would at the end of the show would give like a 5-minute op-ed, kind of verbal op-ed on what he thought was right or wrong, and he kind of tried to be funny. I'm going to try to do a little bit Andy Rooney stick today. A lot of people have asked me yesterday, "What do you think about Trump's speech that how the war with Iran is kind of back on?
He said that it's not going to be a short war, Iran refuses to capitulate at this point because they have levered us over the Strait of Hormuz. What do you think happens in the markets? I'm not arrogant or stupid enough to think that I can predict what happens in the markets.
I can tell you that's a crazy person's job, that's just crazy business. What I can tell you is what history tells us happens. Now, Trump's different, but we'll talk about what do we know, okay?
What we know is that usually when this country has gone to war the market has sold off a 20% or thereabouts in the lead-up to war. Usually, now think back in the Iraq War II, Iraq War I, old man Bush and then young Bush, Bush 41, Bush 43, they actually spent the year trying to get the American public ready for war. Very, very important psychologically so that America gets ready for sacrifice.
The market goes down like 20%, but what happens is after the war starts it tends to rise about 24% in the 12 months after the war started.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market crash risk
- us war uncertainty
- geopolitical risk
- rate of recovery history
- nuclear risk awareness
Companies and tickers mentioned
- AMZN
- NVDA
- META
- MSFT
- MRK
- GSK
- Amazon
- Nvidia
- Meta
- Microsoft
- Merck
- Glaxo
Watch the episode
Watch “Dylan Jovine | Will the Market Crash? What History Tells Us About Stocks” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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