Iran: In Search Of Answers

Post Mortem & Future.

Dubai. Source: The Times of Israel

I believe that the defining quality of any analyst is their ability to own their mistakes, analyze them and ultimately use them to create better analyses in the future. It is similarly important to recognize good parts of any thesis, however. It’s a delicate act of balancing that requires you to leave your ego at the door and to not get married to your theses.

My thesis on Iran was ultimately proved to be false. The US did strike the Islamic Regime, and it did so in the worst possible moment for my portfolio - just 24 hours before majority of my positions matured. But several elements of the thesis still hold true.

Today’s piece will be an exercise in refining that thesis. You will get a peak under the hood as I will reconstruct the thesis, changing the bad parts into a more refined view, thanks to the great power of hindsight.

Additionally I will forecast current developments. I opposed strikes in part because I understood the risk. Now it’s time to explore that risk.

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The Good And The Bad

Was I too confident in my thesis? I don’t think so. The situation is unfolding pretty much as I expected in the event of strikes. I repeatedly wrote that there is no plan for a military operation, no real goal that can be achieved with strikes and the most probable outcome of a kinetic strike would be chaos. Now we have it.

However, understanding that something will be a shitshow is not enough of a reason to think that it won’t happen. I gave up to 40% chances for a strike in the next 3 months. I didn’t play with long-dated No shares as some of the sharp traders (eg. SwissMiss who lost almost $2 million on the event). Thus one good thing about my analysis was understanding of the consequences based on the situation on the ground.