Will The Iran War Crash The Markets? | Michael Lebowitz

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I am your host Stacey Schroeder. Welcome to Tell Me Lies, the official podcast. What's the most unhinged thing of season three?

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Steven, because he's so evil.

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**Michael Lebowitz** (0:59)
We're growing concerned. That's one reason we reduced our exposure by about 6 or 7 percent.

**Adam Taggart** (1:12)
Welcome to Thoughtful Money, I'm Thoughtful Money Founder and your host Adam Taggart, welcoming you here at the end of the week for another weekly market recap, this time featuring my good friend, the portfolio manager, Mike Lebowitz. Lance Roberts has the week off. Mike, how are you doing?

**Michael Lebowitz** (1:26)
Doing great. How about you, Adam?

**Adam Taggart** (1:28)
I'm doing good, I'm doing good. As you said right before we turned the camera on, this should probably be pretty quick, not too much going on right now. Said obviously with a heavy tongue and cheek, so a lot has happened since last week's Update with Lance. First and foremost is the outbreak of war between the US and Israel against Iran, and it's having a lot of implications. So right now, the price of oil is spiking, I believe, to multi-year highs here.
Iran, in response to the attacks by the US and Israel, has been threatening to choke off the straight-for-moves, and not much is going through there right now. The world's really beginning to panic about that in terms of flows of oil and other things through there. This morning, President Trump posted a truth social note, basically saying there's no negotiation possible with Iran until they're willing to discuss unconditional surrender. I think that was the trigger for the latest jump in oil, at least as of the day that we're talking here, Mike. Stocks are down. They have been in a trading range, which Lance and I talked a bit about last week, pretty much since October of last year, Halloween-ish or so. Stocks really hadn't been able to break out of the sideways trading range. Lance was looking at a lot of technical levels and saying, okay, look, if it goes above here, that'll be a breakout to the upside. If it goes below here, that'll be a breakout to the downside. I'm curious when we get to the TA here for today's talk, Michael, whether we're seeing any technical breakdowns that make you and Lance more nervous that this consolidation might end in a breakdown. Maybe it was just a topping process all along. Don't know if we're in that danger zone yet, but like I said, lots to talk about. Of course, we've got some really interesting new data out too around jobs and things like that, but let's start with the war. As you guys at RIA who are managing capital and have to preserve client capital, what's your status right now? Are you still as invested as you've been? Are you starting to take more defensive measures?

**Michael Lebowitz** (3:52)
So, over the last few weeks, we've brought a couple of weeks, we brought our exposure, we were slightly overweight our benchmark, we brought it back down to regular weighting.
As I'm going to show you in a little bit with the charts, the market really continues to just trade in a trend. Part of the problem is that trend is kind of an arc-like shape. You can draw a rectangle, and I'm going to do that, but there is an arc-like shape to it, and we're on the right side of that arc. So, that is a little concerning. But thus far, we really haven't gotten any good technical signals to say start reducing, get out. At the same time, our portfolios are sitting near their all-time highs. On, what's today, Friday, we closed out Wednesday at our record high. So, our exposure to different sectors has, and diversification, and the way we've kind of moved around value growth, large cap, small cap, with, not just defensive in a finance way, but defense stocks, the Palantir, RTXs, has really helped the portfolio reduce the volatility and pretty much stay up at our highs.