The super investor is optimistic about the outcome of the war and recognizes a buying opportunity

In a post he published this weekend on Network X, he writes: “Some of the highest quality businesses in the world are trading at the cheapest prices… This is one of the most one-sided wars in history that will end well for the US and the world. And we have the potential for a large peace dividend.” He added that now is “one of the best times in a long time to buy quality.”

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Ackman is generally a passionate supporter of the current US administration and of Israel. And his post did attract some negative comments that addressed it, including claims that he does not correctly estimate the economic damage that will be caused by the rising energy costs.

However, his optimistic message is interwoven with a host of other interpretations. For example – a team of strategists at Goldman Sachs led by Ben Snyder said that the consensus among forecasts indicates a 12% annual growth in earnings per share for the S&P 500 index this quarter. It would be the sixth consecutive quarter of double-digit earnings per share growth, they noted.

Michael Derda, the chief economist and market strategist at Roth Capital even called on investors to “add more information technologies to the portfolio”.

The possible scenarios according to Robini

Prof. Nouriel Roubini, who predicted the financial crisis in 2008, estimated at the end of the week that Trump will deepen the war and not strive to end it because otherwise he will look like a “loser”. In relation to the economy, Rubini described two scenarios. One where “everything will go well, maybe the war will last a little longer because of this escalation, but then there could be the collapse of the regime.”

This means that oil prices may be higher in the short term, but regime change, which Trump called for in Iran, could bring “a better situation for the world in terms of geopolitical stability,” he said.

At the same time, Roubini also warned against another scenario in which, after Trump escalates the war, “the Iranians can continue to block Hormuz or attack the oil facilities in the Gulf, and the world economy will reach a stagflation in the style of the 1970s.”

The trading week on Wall Street opened today with rising prices despite a jarring ending on Friday. The S&P 500 index fell by about 2.1%, the technology-biased Nasdaq fell by about 3.2% and the industrial-biased Dow Jones weakened by about 0.9%. Thus, the Nasdaq and the Dow Jones officially fell into correction territory – that is, down more than 10% from their recent peak. The S&P 500 is 8.7% away from its peak.

The volatility index VIX (“fear index”) jumped on Friday by 14% to a level of 31 points and well above the average, 19.5 points.