Winner of Iran War #4: Companies “doing nothing” – Fat Tail Daily
The inflation numbers weren’t great today.
That means the RBA is more likely to raise the cash rate, just as Foreign Minister Penny Wong parleys with China to get a slice of its large oil strategic reserves.
We know we were woefully unprepared for the fuel security issues this war has thrown up.
There’s no point assigning blame on that issue anymore, well, because it’s so obvious.
Then, of course, we are due for another profligate budget — so more of the same, really.
The real question of the last week is…
Why is the S&P 500 up while
the ASX 200 is down?
Clearly, diesel costs are starting to hurt the ASX 200 while the Yanks charge ahead.
Below is the trading of the two indices since 8 April (yellow line = S&P 500, blue line = ASX 200):
Source: TradingView
[Click to open in a new window]
The S&P 500 is printing new highs while our index just had a down week.
Why?
Because the US has its own oil, its own refining, and a market led by big tech and AI that doesn’t really care if diesel in Dandenong is a buck a litre more.
Here, higher fuel filters into everything.
Supermarkets, builders, miners, freight — you name it.
That’s why the ASX 200 looks tired while the S&P 500 looks fine.
But here’s the angle your average punter won’t see.
If you’re a producing miner right now, higher diesel is a direct punch in the ribs.
Trucks, shovels, power, contractors.
All of it costs more.
Margins get squeezed just as investors are getting jumpy about more rate hikes.
The perverse winners…
If you’re a mining developer, though, you don’t have that problem yet.
No ore on ships.
No million‑litre fuel bill just to keep the pit moving.
Your main spend is drilling holes, doing studies, and pushing permits along.
The market often dumps the whole sector together when oil spikes and rates go back on the table.
For me, that’s where the opportunity sits.
And that’s where I’ll continue to look for my next recommendations across Australian Small-Cap Investigator and Fat Tail Micro-Caps.
Warm regards,
Lachlann Tierney,
Australian Small-Cap Investigator and Fat Tail Microcaps
The post Winner of Iran War #4: Companies “doing nothing” appeared first on Fat Tail Daily.
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