Here we go

There’s a lot of talk about the Doomsday Clock.

For markets, the world.

And it’s midday — I’m scanning the market at rapid pace, typing on the Tassie keyboard like Glenn Gould would delicately rip through the piano keys.

Meanwhile, I’m listening to the Smashing Pumpkins album Zeitgeist which features a track called “Doomsday Clock” — the Pumpkins last album to feature drumming savant Jimmy Chamberlain on the skins.

You can hear the pop-pop-pop on the snares as soon as the track starts.

And so it is with the times we live in, tick-tock, tick-tock.

How on earth is the market up right now?

The end times cometh, right?

Well today, I’m not going to take you on a tour of the psychology of the Big Don in the Oval Office, or the latest satellite data coming out of the Strait.

Or this bit of information, or that petty sundry.

No, it’s about your internal psychology as an investor.

Which much like the Latin phrase, should be semper paratus (always prepared).

Here’s how it works.

The big coin flip

Markets are edging higher this morning.

I cannot remember a time when things felt this finely balanced.

By the time you wake up tomorrow and Australian markets open, Trump’s 8pm US Eastern deadline for Iran will have passed.

That’s roughly our market open, deal or no deal.

Maybe even semi-deal?

1973 says hello, with a reminder

For the venerable older reader, cast your mind back to October 1973.

Because I can’t.

Arab oil producers launched an embargo against the US and its allies.

Oil prices tripled and Western economies reeled.

But something else happened — the energy shock sparked one of the biggest nuclear buildouts in history.

France responded with the Messmer Plan, committing to six to eight nuclear plants per year from 1974 to 1980.

France commissioned +40 reactors in the decade that followed. Japan built +10 over the same period.

Nixon launched Project Independence in November 1973, calling for a massive nuclear investment to free America from foreign oil dependence.

Energy insecurity has a way of accelerating the transition away from whatever is causing the insecurity.

We are watching that movie again, just with a 2026 soundtrack.

Energy moves in phases

Regular readers will remember my theory on the progression of the energy trade.

It starts with oil.

Then it shifts into safe-jurisdiction gas developers.

Reliable supply from politically stable countries commands a serious premium when the Strait of Hormuz sits blocked and Brent crude is trading above US$110 a barrel.

Then uranium. The 1973 playbook tells you why.

And eventually, lithium.

The EV story is actually accelerating right now.

Australians are watching petrol hit +$2.50 a litre and walking into showrooms for the first time with a mix of bitterness and resolve.

EVs hit a record ~12% monthly market share in Australia in February this year.

Other countries are likely following suit after getting ruthlessly bled out at the pump.

That EV demand is the bedrock of lithium demand.

But layered on top is the explosive growth in battery energy storage systems (BESS).

BESS demand potentially rose +30% in 2025.

That’s a tsunami of compounding money into energy — the Internal Rate of Return (IRR) on BESS is now so good that investors are compelled to back it.

Then you get to the deeper layers.

Copper for electrification. Critical minerals for AI data centres consuming energy at a rate that has the IEA projecting 945 terawatt-hours of global data centre power consumption by 2030.

Even nickel. The full cast of the energy and technology transition.

This is a sequence, unfolding over years.

Binary logic doesn’t work

Tomorrow won’t deliver a clean answer.

There’s a scenario where a deal is struck and oil softens.

There’s a scenario where things escalate sharply.

But there are permutations across multiple vectors and different timeframes. Iran could accept something partial.

The Strait could further partially reopen. Secondary sanctions could tighten further.

In that environment, I am not trying to call the next 24 hours.

That’s pure madness, as it always will be.

But what I am doing, across Australian Small-Cap Investigator and Fat Tail Micro-Caps, is aggressively working through the different permutations diligently.

I’m highlighting the exposures in our existing positions and releasing new recommendations tailored to a market calculus that’s changing faster than at any point I can remember.

Never forget — the pace at which decisions need to be made is itself compounding, the same way the AI boom is compressing the timelines on everything it touches.

See you tomorrow when we’ll find out if the sun rises or sets for the market.

But remember, as long as it still exists, we’ll be here presenting our best ideas.

Speaking of which — watch the Pax Silica presentation here, to see what opportunity looks like in these moments.