Why I think the Iran war will end soon; Bill Ackman is taking Pershing Square public; Update on Joby Aviation; No success on the courts, but I had a blast
1) I wrote yesterday that investors should "ignore the headlines and stay the course." One reason is that I think the Iran war and resulting spike in oil prices won't last long.
I gave the same advice last year, when President Donald Trump roiled the markets with his "Liberation Day" tariffs...
On April 1, I wrote:
My gut tells me that Trump doesn't want to begin his presidency by tipping an otherwise strong economy into a recession, so he'll declare some victories and back off a bit – which could trigger a huge relief rally.
Two days later, I added that the damage was "self-inflicted... which means it can quickly be reversed" and concluded:
So my advice remains the same: Don't get swept up in the hysteria right now and focus on the long run.
Sure enough, Trump backed off on his tariffs, and the stock market ripped higher.
Similarly, the Iran war is entirely within the president's control. He started it suddenly – and can end it just as quickly.
Midterm elections are coming up, prices Americans are paying at the pump are rising sharply, and his approval rating is in negative territory. So it's clear to me that he's going to declare victory in the Middle East in the near future, which will likely trigger another relief rally.
We already saw the first sign of that yesterday in Trump's interview with CBS News. He said that "the war is very complete, pretty much" and would come to an end "very soon."
This triggered one of the sharpest oil-price reversals in history, as this chart from the Kobeissi Letter shows:
Here's how the Wall Street Journal summarizes the oil market's 24-hour frenzy:
First there was $100-a-barrel oil. Then $110 came and went. Close to midnight Sunday, $120 crude was within reach.
But a frenzied 31% run-up in U.S. oil prices after futures markets opened Sunday evaporated and then some Monday in one of the most stunning reversals of the modern trading era.
The pullback underscores how the war with Iran is scrambling the outlook for the fuel-hungry economy. After investors sold off stocks across Europe and Asia Monday morning, oil prices gave back most of those gains. Benchmark U.S. futures ended up closing 4.3% higher, at $94.77 a barrel.
That helped the stock market in the U.S. – where companies are more insulated from a global energy shock – rally into the close.
My advice remains the same: Ignore the headlines and stay the course.
2) This morning, my college buddy Bill Ackman announced he's launching a new U.S. closed-end investment company, Pershing Square USA – which will trade under the ticker "PSUS."
Simultaneously, he's taking his management company, Pershing Square Inc., public – which will trade under the ticker "PSI."
Here's the press release, plus the two filings with the U.S. Securities and Exchange Commission ("SEC") for PSUS and PSI. And here's a WSJ article about the announcement.
For PSUS, he seeks to raise a minimum of $5 billion and a maximum of $10 billion. So far, $2.8 billion is already lined up in a private placement.
Closed-end funds typically trade at a discount, making investors reluctant to buy the IPO at full price. To address this issue, Bill has come up with an innovative twist...
For every 100 shares someone buys of PSUS at the IPO (at $50 per share, that would be $5,000), they will get 20 shares of PSI for free.
It's hard to know what these shares will be worth later on, but this feature will, by definition, make the IPO more attractive.
Bill is one of the smartest investors I've ever met, and his long-term track record is exceptional. So I think there's a good chance that PSUS will outperform the market over time.
But I'm even more interested in PSI, the management company. I can tell you from being in the business myself for nearly two decades that the general partner of a fund is the world's greatest business.
Think about it: Other people put up the money, and the manager gets a piece of the upside if things go well. That doesn't even necessarily require above-average talent, given the tailwind markets tend to have over time. And if things go poorly... well, it's the investors who lose money.
Plus, the business requires no capital investment. And it can scale 10 times, 100 times, or 1,000 times with no material increase in the cost structure.
My costs were pretty much the same when I managed $100 million versus $10 million. As of year-end 2025, PSI managed $30.7 billion with only 44 employees. Of that amount, $20.7 billion is fee-paying, 96% of which is permanent capital. Now that's a good business!
Bill describes how good of a business PSI is on page 74 of the S-1 filed this morning.
I'll be keeping an eye on these two IPOs and, in particular, what valuation PSI trades at.
If my team and I decide to add the stock to our model portfolio, Stansberry's Investment Advisory subscribers will be the first to know. (You can become one by clicking here.)
3) My favorite speculative stock, electric-aircraft maker Joby Aviation (JOBY), was up slightly this morning on two pieces of mixed news...
The company announced that it will likely commence commercial flights in the U.S. this year under a White House-backed program. This is much earlier than expected, as the company hasn't yet received certification from the Federal Aviation Administration ("FAA").
Here's an excerpt from the press release:
Joby Aviation, a company developing electric air taxis for commercial passenger service, today announced it has been selected as a partner in multiple winning applications under the White House-backed Electric Vertical Takeoff and Landing (eVTOL) Integration Pilot Program (eIPP). Through the program, Joby has the opportunity to begin early operations this year in Arizona, Florida, Idaho, New Jersey, New York, North Carolina, Oklahoma, Oregon, Texas and Utah, marking a major milestone for the U.S. air taxi industry with the potential to significantly accelerate Joby's path to commercial service...
The eIPP program, established by Presidential Executive Order, paves the way for Joby to bring its technology directly to U.S. communities ahead of FAA type certification. It is expected to accelerate regulatory coordination by bringing the FAA and DOT together with local authorities to streamline approvals for airspace integration and the development of relevant infrastructure – advancing the safe integration of this new technology into the national airspace.
Offsetting this good news, however, is a lawsuit filed by Joby's competitor, Archer Aviation (ACHR)...
As the WSJ reports, Archer is accusing Joby of concealing extensive ties to Chinese suppliers:
The suit filed Monday in a California federal court alleges that Joby's actions undermine national security and run contradictory to its branding as an "American-made" air-taxi manufacturer.
Joby has spent more than a decade operating a manufacturing subsidiary in Shenzhen, China, and that entity benefited from technology-development grants directly from the Chinese government, according to the suit. The suit alleges that the company fraudulently disguised aerospace imports from that subsidiary by misclassifying the parts as thousands of pounds of socks, napkins, hair clips and other items.
I think Joby's attorney is correct that "Archer's constant legal issues and flailing business operations have left it no choice but to resort to invented nonsensical theories."
Once Joby begins commercial service, I could see an investor frenzy that drives the stock through the roof. This is why it remains my favorite speculation (emphasis on speculation, which means sizing it appropriately).
4) I love to do epic things like climbing mountains, running marathons, competing in 24-hour races, etc. But sometimes, I just get my butt handed to me – like yesterday...
In the morning, I played a fun sport I've just discovered, padel, which is a cross between tennis and squash. I've played fewer than a dozen times in my life, so I suppose it's not surprising that my partner and I lost 6-4, 6-3, 6-0, and 6-2.
Then I played singles tennis with another friend in the afternoon and got thrashed 6-2, 6-1, and 6-2.
Despite nothing but losses, I had a blast! It was great being outdoors on the most beautiful day of the year, sunny and in the mid-60s.
I just got back from a six-mile training run for the NYC Half Marathon, which is coming up on Sunday. Wish me luck!
Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.