"You Don’t Win Wars Just By Intercepting Your Enemy’s Hits"

Not A Victory For Israel 

One talking point after Iran's missile attack on Israel over the weekend was that the successful interception of most of the missiles by Israel and its allies was a victory. 

One well-placed observer disagreed with that assessment, former Israeli Prime Minister Naftali Bennett. That name may sound familiar to Zero Hedge readers: Bennett tried to mediate an end to the Ukraine War shortly after it began, and later claimed that the West sabotaged a peace agreement that Russia and the Ukraine were ready to sign. Bennett took to X on Sunday to share his views on the Israel-Iran conflict. 

Some points regarding the overnight Iranian missile attack on Israel

1. Contrary to what pundits are saying, this wasn’t designed merely as “bells and whistles” with no damage. When you shoot 350 flying objects timed to hit Israel at the same moment, when you use three fundamentally different weapon types—cruise missiles, ballistic missiles and UAVs, you’re looking to penetrate Israel’s defenses and kill Israelis.
2. The US administration is telling us: “This is a victory, you’ve already won by thwarting the missiles. No need for any further action.” No, it’s NOT a victory. Yes, it’s a remarkable success of Israel’s air defense systems, but it’s not a victory. When a bully tries to hit you 350 times and only succeeds seven time, you’ve NOT won. You don’t win wars just by intercepting your enemy’s hits, nor do you deter it. Your enemy will just try harder with more and better weapons and methods next time. How DO you deter? By exacting a deeply painful price.
3. It’s incorrect to say “nobody got hurt”. There’s a 7 year-old Israeli-Arab girl called Amina Elhasuny fighting for her life. That’s who coward Khamenei hit.
4. The Islamic Republic of Iran made a big mistake. For the past 30 years it’s been wreaking havoc on the region—through its proxies. A terror-octopus whose head is Tehran, and its tentacles are in Lebanon, Yemen, Iraq, Syria and Gaza. How convenient. The Mullahs send others to conduct horrendous terror attacks, and die for them. Other people’s blood. Israel’s strategic mistake for the past 30 years was to play along this strategy. We always fought the Octopus’ arms, but hardly exacted a price from its Iranian head. This should change now: Hezbollah or Hamas shoots a rocket at Israel? Tehran pays a price.
5. The enemy is the Iranian REGIME, not the wonderful Iranian people. The Iranian regime reminds me of the Soviet regime in 1985: corrupt to the core, old, incompetent, despised by its own people, and destined to collapse. The sooner the better. The West can accelerate the regime’s inevitable collapse with a set of soft and clever actions, short of military force. Remember, USSR collapsed without any need for a direct American attack. Let’s do this.
6. Israel is fighting everybody’s war. In Gaza, Lebanon and Tehran. We’re considered “the small satan” by radical Islam. America is the big one. I’ll be clear: if these crazy fanatic Islamic terrorists get away with murder by hiding among civilians, this method will be adopted by terrorists worldwide. We’re not asking anyone to fight for us. We’ll do the job. But we do expect our allies to have our back, especially when it’s tough—and now it’s tough. Be on the right side and help us defeat these horrible and savage regimes.

In Case You Missed It

In a post on our trading Substack over the weekend, we shared an update on our hedged portfolio method, that's well-suited to periods of elevated geopolitical risk. 

This was a hedged portfolio created by our site on October 12th, for an investor unwilling to risk a decline of more than 30% over the next six months.

Screen captures via the Portfolio Armor web app on 10/12/2023.

And here’s how that portfolio performed over the next six months, net of hedging and trading costs:

That portfolio more than doubled the performance of the market—while hedged. You can see an interactive version of that chart here.

Maybe an approach to consider while we wait to see whether Israel is going to strike back at Iran or not. 

If you want to stay in touch.

You can scan for optimal hedges for individual securities, find our current top ten names, and create hedged portfolios on our website. You can also follow Portfolio Armor on X here, or become a free subscriber to our trading Substack using the link below (we're using that for our occasional emails now).