The listing market ship... I'd rather be out of touch... An oil and gas 'island'... Two quick gains for The Ferris Report... Bourne's axiom... DIY volatility therapy...
The market today is like the deck of a ship covered with passengers...
Everybody on board was fine with where they were. Then the ship's crew set off a fireworks display from one side of the ship.
The passengers all crowded over that way to see it. The ship listed badly, and they all headed back the other way in a panic...
They rushed back and forth, correcting each mistake by making the opposite one.
That's the stock market with the Iran war right now.
Every day, the news seems to be changing its mind. One day the war is off, and the next day it's back on. When it's on, investors sell stocks and buy oil. When it's off, they do the opposite.
On the ship and in the market, folks are behaving like a herd, stampeding this way and that based on their current fear. They fear owning stocks when the war is back on, and they fear not owning them when it seems like it'll end soon.
Overall, so far this year, the stock market is down about 1%. But from its highest high on January 27 to its lowest low (so far) on March 30, it was down more than 9%. It's now roughly 8% above its March 30 bottom.
The CBOE Volatility Index ("VIX") doubled from the beginning of the year to its late-March peak, and it's still up about 35% on the year. At this point, if all you were looking at was the S&P 500 Index and the VIX, you might assume the worst of the drawdowns are behind us. But who knows? Nobody I know.
Maybe President Donald Trump will follow through on his promise to bomb the remaining smithereens out of Iran if its leaders don't reopen the Strait of Hormuz... And maybe he won't. There's no telling with that guy.
Anyway, that's what everybody else in the world is obsessed with lately. I find it nauseating.
I'm happy being out of touch with the herd...
While they've been running back and forth reacting to Iran war news, I've been telling you here, here, and in The Ferris Report that there's an energy crisis right here at home that will still exist even if the war ends tomorrow.
For now, that crisis is focused on a city that's about five or six hours down the freeway from my house – Benicia, California, near San Francisco. Though I mentioned it in my March 13 Digest, the fact that it'll happen any day means it bears repeating: The 170,000-barrel-per-day ("bpd") Valero Benicia Refinery will cease operations by the end of this month.
Combined with the recent closure of the 139,000 bpd Phillips 66 Wilmington refinery near Los Angeles, it means California's refining capacity will permanently drop by 17%. The biggest economy in the U.S., representing roughly 14.5% of our country's GDP, is losing roughly one-sixth of its refining capacity – by design.
In my March 27 Digest, I said the energy crisis was here. Well, by the end of this month, that crisis could kick into a higher gear as Benicia stops making refined products.
And it's even worse than you might imagine, at least from the perspective of trade and national security...
What I didn't mention then is the ultimate irony...
Though it'll no longer be an oil refinery, the Benicia facility will remain open. Its new purpose underscores the twisted energy policy that's causing it to shut down refining operations in the first place.
It'll become a terminal for imported gasoline.
I'm not kidding. They're shutting down a major refinery that produces gasoline in the state with the highest gas prices in the country, then replacing it with a terminal that will act as a receiving base for imported gasoline.
They're doing this at a time when our president is much less worried about making new enemies than he is about destroying old ones. Last October alone, 60% more tankers traveled from Asian refineries to the American West Coast.
One trader said "boats and boats" were delivering refined products from Asia to California, including more than 400,000 barrels from China in the first 10 months of 2025.
California has permanently and drastically reduced its critical domestic energy production capacity. That makes it more dependent on countries like China – which banned its domestic oil companies from exporting any oil-related products in early March.
Reuters recently reported that it will likely extend those bans, with limited exceptions for some of its hardest-hit Asian neighbors.
Maybe California can make up the difference from other Asian producers... If not, things could get dicey down there.
California was once such a huge oil producer that it didn't even think it would ever need to get oil from other states. So no oil pipelines connect it to any other oil-producing U.S. regions. It's an oil and gas "island."
It's always one global economic or political hiccup away from a major energy crisis. The refinery shutdowns make such a crisis that much more likely... and that much worse if one happens.
And California did this to itself...
When the Benicia refinery's owner, Valero Energy (VLO), announced the shutdown a year ago, it cited "years of regulatory pressure, significant fines for air quality violations, and a recent lawsuit settlement related to environmental concern."
I put the details of the refinery crisis in the December 2025 issue of The Ferris Report and recommended two stocks. So far this year, one is up 44%, and the other is up 35%. My paid subscribers and Stansberry Alliance members can read that issue and find the names of those stocks here.
I also discuss the crisis in a free video presentation. It doesn't include the stock recommendations, but it gives you a chance to get a free 30-day trial to The Ferris Report. Check it out here.
Even if you don't get a subscription, I want you to know that the shortage of refined products – especially diesel fuel – will likely continue to show up at the gas pump whether the war in Iran is on, off, or somewhere in between. And that'll continue to bolster the results of the companies I've recommended.
I'm afraid most folks are too distracted by the Iran war and its daily market gyrations to even care about the domestic refining crisis. I'd like to help you readjust your focus...
Just remember a simple axiom...
It was laid down more than a century ago by a sickly, brilliant young man whose life was tragically cut short. In an unfinished essay titled "The State," found after his untimely death during the 1918 flu pandemic, writer Randolph Bourne told us:
War is the health of the State.
Bourne's brilliant insight has found its way into better-known works... notably George Orwell's 1984. The book's 1984 film adaptation summarizes the book's argument succinctly:
The war is not meant to be won. It is meant to be continuous.
States need to fight wars to legitimize their existence. So in addition to fighting them abroad, they fight them at home. During my lifetime, I've witnessed:
- The war on drugs
- The war on terrorism
- The war on poverty
- The war on fossil fuels
Over the past several decades, there have been several lesser-known government wars on crime, inflation, obesity, cancer, illiteracy, and waste/fraud/abuse (under both Ronald Reagan and Trump). Google any one of them, and you'll see what I mean.
The U.S. is fighting the war on terror again right now in Iran. That country is often called "the largest state sponsor of terrorism in the world," despite the fact that 15 of the 19 hijackers who perpetrated the deadliest terrorist attack in history were Saudi.
The war on fossil fuels is the most insanely suicidal one. You can't make cement, steel, plastics, or ammonia (for fertilizer) without fossil fuels. You can't have a modern life without those ingredients.
But that's the war they're fighting in California, where gasoline now exceeds $6 a gallon in several counties. So despite having enormous oil and gas deposits and once being among the world's largest producers, California now imports 70% of its crude oil.
All the wars have been colossal failures, which is how continuous war works...
They're not meant to be won. They're meant to be waged forever so the state can keep claiming there's some emergency to which it must respond by spending more money.
In this respect, Trump is no different from anybody else who has been elected for at least the past six decades. They all love war. They all grow government. The debt keeps rising, and the bombs keep dropping.
That's why, in 1984's dystopian world, "War is peace." War keeps the herd unified against a common enemy. It engages them emotionally with the idea of an all-encompassing government that requires them to keep less of what they earn and give up civil liberties to win the war.
If the Iran war ends soon, there'll be some other alleged war to fight sooner or later. You should remember that every time the headlines readjust, the S&P 500 goes up or down by 2% or more, often in a single day.
The reason to own energy stocks has little to do with the Strait of Hormuz and everything to do with the supply dynamics I've discussed here and in The Ferris Report.
The war might make them worse for a while... and it might end soon... but those same dynamics will still exist. I discussed it all in the January and February issues of The Ferris Report and recommended two more cash-gushing oil and gas stalwarts.
Maybe you don't like Bourne's axiom...
And maybe you don't like how I characterize one politician or another.
That's fine. Then come up with your own ideas on how to handle wartime volatility.
My job isn't to make you agree with me. My job is to give you the tools to make sound investment decisions. If you think I'm an idiot but come away from this Digest with a clearer idea of how to handle market volatility, I've earned my paycheck.
Here's the bottom line on the Iran war... I continue to recommend investors buy and maintain their holdings of defense stocks. The current issue of The Ferris Report features a brand-new one that turns recent technological developments on the battlefield on their head... and shows you how the market for drones has created an even bigger market for another product.
It's full of historical examples demonstrating that this is a consistent trend in warfare since at least the 14th century. A new inexpensive battlefield technology changes the game – just not completely in the way you might think.
That company, like most good defense firms, should keep performing well as long as the folks in the White House believe our military must not fall behind technologically or in any other way.
If you assume there'll always be some type of war and that the government is nearly always lying to you, you'll be in much better shape to stomach the nearly daily whipsawing moves that have sent the S&P 500 down and sideways since January 1.
And if you own the right energy companies, you're in good shape regardless of what happens in the Middle East.
Again, you can learn how to get started with a free trial to The Ferris Report – which includes access to my defense and energy stocks, along with the rest of my model portfolio – right here.
New 52-week highs (as of 4/9/26): Applied Materials (AMAT), Ecovyst (ECVT), Cambria Foreign Shareholder Yield Fund (FYLD), GE Vernova (GEV), Hubbell (HUBB), iShares Convertible Bond Fund (ICVT), Lynas Rare Earths (LYSDY), Sempra (SRE), Tenaris (TS), and Telefônica Brasil (VIV).
In today's mailbag, feedback on yesterday's Digest, which included discussion on inflation... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.
"Inflation is a monetary effect. If more dollars are being printed, then there will be inflation. Otherwise, not (all other things being equal). Yes, the price of petroleum is up; but with the same number of dollars out there, then some other prices will go down. So, the increase in petroleum prices does not necessarily mean that there is more inflation, despite the fact that it does influence our spending...
"Most people don't understand this, apparently including [Federal Reserve Chair Jerome] Powell..." – Subscriber Jeff C.
Good investing,
Dan Ferris
Medford, Oregon
April 10, 2026
