What to invest in during war? You should act NOW, according to this hedge fund manager

Many investors have never faced a geopolitical environment quite like the present. With conflict in Eastern Europe still raging, and tensions between the U.S. and its adversaries intensifying, an all-out global war is arguably closer than any time in recent history.
While many do have faith in the virtue of world leaders to avoid the devastation of a third World War, astute stock market investors might be wondering what stocks they can buy that could potentially perform well in war-time.
We sought the expertise of respected hedge fund manager and founder of the Capitalist Exploits investment newsletter, Chris MacIntosh, for his views on what to invest in during war.
But first, what is the likelihood of another world war? Well, MacIntosh’s views on this might be somewhat surprising.
But they’re worth taking note of – long term subscribers of the Capitalist Exploits newsletter would know his geopolitical analysis and predictions have been right on the money over the years.
He says the probability of a global conflict has increased significantly this year, mostly due to the ever increasing cooperation between Saudi Arabia, Iran, China and Russia. Something the United States and its allies detest.
You might remember reports earlier this month that former rivals in the global oil trade, Saudi Arabia and Iran, agreed to restore ties after negotiations facilitated by China.
Well MacIntosh thinks that development was much more significant than the passing reference in the mainstream media indicated.
“Unfortunately, what this means is that the probability of a major war being used by the United States to attempt to dismantle this fast forming bloc is now much, much more probable. There are those out there who would rather burn the world to the ground than let it fall into hands they don’t have leverage over,” said MacIntosh.
“So I hate to say it, but prepare for a global war. Timing… I’d say we’ve a year, maybe two tops.”
That’s right. A global war within two years. So what the hell should you do with your investment portfolio?
What to invest in during war
There’s one thing investors should keep in mind when considering what to invest in during war, according to MacIntosh.
That’s the fact that wars lead to higher inflation. So those stocks that have been hit hard by inflation in the 2022/23 bear market – forget about them.
“First and foremost all wars are inflationary. All wars typically bring about some level of protectionism – that’s a curtailment of supply. All wars bring about heightened cost of transportation. The control of waterways around the world – the Suez, The Bosphorus, the Panama Canal, all these particular geopolitical choke points will be leveraged by the particular powers who have control of them.”
Not good for the affordability of goods, but potentially a boom for the kinds of business charged with navigating those choke points – shipping companies.
“It’s interesting that if you go back to World War II, one of the best performing sectors was actually the shipping sector,” says MacIntosh.
“Who wanted to move good across the English Channel (in World War II)? Not that many people, but it comes down to that service is needed… Everybody needs supplies to keep their economies going, the war machine going, etcetera.”

In recent months, tanker stocks including the likes of Tsakos Energy Navigation (NYSE: TNP) and Scorpio Tankers (NYSE: STNG) are up over 100%. That’s no surprise to MacIntosh and he’s certain the break out of a large scale global war will see these sort of stocks surge even higher.
“What we’ve been witnessing is a low-scale war which has been impacting supply chains, so I think one of the big beneficiaries of a global war is going to continue to be things like tanker stocks – energy transfer is crucially important in any international or larger-scale war.”
Macintosh also calls out the energy, metals and rare earths sectors as ones to increase exposure to in the face of looming conflict.
This is due to their ability to outperform in an inflationary environment and when Governments are printing extraordinary amounts of cash to fund a war.
If you’d like to read more insights from Chris MacIntosh you can sign up to his popular investment newsletter here.
If you have different views on what to invest in during war, reach out to us on Twitter – @asia_markets.