Saturday 30 September 2017

Preparing for The North Korea Crisis Dilemma

The North Korea crisis can bring out nuclear war and eventually a nuclear disaster and a nuclear fall-out.


If war were to eventually happen, the further you are from the conflict zone - the better you are. This is because all the above 3 problems become less and less significant when you are further.


The only worrisome part is the nuclear fall-out which will eventually lead to "nuclear winter" or in other words ozone crashing down on earth, leading to blindness to all that come to its path. What's the use of all the wealth in the world, if we lost our ability to see the wonders of life.


However, that is beyond my comprehension. I would like to discuss the economic consequences.


If a nuclear war were to happen in North Korea. The war will be short, maybe a week and if the US really need to attack, they will attack first the military, communication, and air-base in North Korea. This would basically make North Korea paralyzed. There, will not be an "all-out" war with North Korea.

North Korea would retaliate by sacrificing South Korea, Japan and maybe Guam. A caveat here, Malaysia is within firing-range of North Korea missile and we have no defense to counter such offensives. So, pray that the inevitable does not happen, as North Korea is known to do a surprise attack on the unprepared.

A silver-lightning is that North Korea has only around 15 nuclear ICBM and he will definitely attack South Korea, Japan, and the Pacific. The most that North Korea will send here is only a normal ICBM. So, we should be more afraid of nuclear fallout and need to prepare our "hide-out"

So, back to investment. The stock market might drop 50 points consecutively for 5 days. Bring it down to its knees at 1500. This is an opportunity for us to buy undervalued stock. Always remember our duty in stock-market is only to convert "graphite to diamonds." It's, okay to lose, but convert your high alpha stock to those battered beta stock.  Therefore, my sincere advice is to reduce "margin or contra" by 25 percent or if your stock is too low to be sold, buy a lot of "HSI put" that expire in 2018 as insurance. So, you can cushion the down-fall.


After a week, the stock will go up, but prepare for the "after-shock." This is my observation, based on the Iraq war. It will not be a protracted war. I might be right or wrong.  Unless Russia and China decided to join the frenzy and attack American.

That will need "parallel economies" to deal with...but basically, it will still be safe to have the basic necessity of life prepared - ground, grab, gasoline, gun, and gold.


Sir Winston Churchill, sum it best "The more we delve to the past, the more we can predict the future!"     


After that, a new set of economics will prevail in the Pacific and the world over.


"Faith favored those who are prepared"

Good Luck! Amigo!

Yours sincerely,

Dr. Lion.

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