Campbell Ramble

You’re bullish AI. You bought TSMC back in ‘24, SK Hynix at the end of ‘25, on our nod. You’re up nicely. Felt good. Then you sold too early. Like us. Feels kinda icky. Now what? Maybe you want a way to stay long la révolution but you’re a little worried about piling chips on the equity table right now. Maybe you are worried about stocks if oil cracks $150, and you already have the latter trade on but can’t add more. Like us.

Another week, another stalemate between the rock and the hard place that is Hormuz. In spite of what looked like some slight movement over the weekend by the Iranians towards a negotiated settlement, the gap between the two parties remains. Iran now appears willing to trade control over Hormuz for peace and a lifting of sanctions.

I know I know, you don’t need me telling you why you should be bullish on days when the market is up 7%. In my defense, we communicated this to paid subs in our portfolio review Monday. We are now long 10% crude through a combination of upside broken butterflys (we buy calls near the money, sell a couple out of the money, and then buy the deep tail back in case things get pretty wacky). We did this for two reasons.

April was a bad month. Down roughly 3% on a ~16 vol book. Back to flat on the year. Oof. Not a disaster. But the reason matters. The market priced resolution. I’m positioned for recovery amidst chaos. Those are not the same thing. This is why you take down risk when you feel like you are early, so you can save your bullets for when the world starts to price into your conviction. Quick framing for anyone new. This is my alpha/convexity book, not my absolute return portfolio.

Yesterday we laid out the rimland strategy. Interdict the ships, sell the crude in dollars, bring China into the conversation by controlling the water their energy flows through. The Abraham Accords pipeline as rimland coalition infrastructure built in pipe and steel. Whether or not it’s working is up in the air. Crude is up 40% since the strait closed, but down ~5% since Trump’s blockade was announced. In response Iran threatened to close Bab el-Mandeb alongside Hormuz. Both chokepoints now at risk.

A 20-year-old threw a Molotov cocktail at Sam Altman's house at 3:45 AM Friday. Then walked three miles to OpenAI headquarters and threatened to burn it down. He has been booked on suspicion of attempted murder. He was not a lone wolf. He was an active member of PauseAI with six community roles.

The Greeks had two words for power. Hegemonia: leadership earned by bearing the cost. Arkhe: control imposed by force. The distance between them is measured in how allies behave when the bill arrives. Globalism is dead. Not dying and in need of a blood transfusion. Already passed, we just haven’t booked the funeral.

You do not need to know whether Trump chooses war or peace to make money in markets. You need to know what the market has priced and what it hasn’t. Peace is linear: bounded, visible, mostly priced. War is exponential: the market prices each broken node with a lag. That is the trade. This piece is dense. The short version: we’re buying call options on corn, wheat, and sugar, hedged through European and UK front-end rate options. If war escalates, the food trades pay 10-30x.

We go high and pull a peace rabbit out of a hat, or we go low and the strait stays closed for months. Markets aren't pricing the second option, especially the second-order consequences. Four years ago, we told you the war phase was here. Two years ago, we told you Iran and the West were caught in a tit-for-tat loop with no offramps.