The UNTHINKABLE is about to happen to STOCKS (& Why the War is the Trigger)

Felix & Friends (Goat Academy)•Apr 20, 2026

Summary

Felix presents a thesis that the current market environment is defined by a 'World Uncertainty Index' at its highest point in 30 years. This instability is driven by a combination of tariff wars, oil price shocks, a significantly weakening US dollar, and sticky inflation, with the OECD predicting US inflation at 4.2%. Felix argues that the divergence between record-high stock markets and these economic realities is unsustainable and will lead to a major market repricing.

Felix outlines a four-phase framework used by institutional investors: Shock, Reprice, Rotation, and Capital Flow. He warns retail investors against three 'catastrophic mistakes': panicking into cash (where 4% inflation erodes value), freezing in paralysis, or chasing temporary price spikes in commodities. Instead, he advocates for monitoring industry rotation to find structural winners that benefit from the 'new normal.' Specific price mentions include Brent oil at $126 a barrel and gold surpassing $5,000 an ounce as fear trades escalate.

Energy Infrastructure: Felix favors pipelines, storage terminals, and refineries over short-term crude oil spikes. He emphasizes that energy infrastructure companies are longer-term winners because they support the backbone of the economy during shipping and supply disruptions. He notes that he has already been positioned in oil service companies for several months.

Defense Sector: Felix anticipates a potential 50% increase in the US defense budget as geopolitical tensions remain high. He recommends looking past large, well-known contractors to specialized firms focusing on AI-driven defense systems and drone technology. He believes defense spending will remain structurally high long after active conflicts conclude.

Gold and Gold Miners: Felix notes that gold is being aggressively purchased by central banks as the US dollar loses its status as a reserve currency. He suggests exposure through gold miners, streaming companies, and ETFs rather than just the physical commodity. He views this as a necessary hedge against the devaluation of paper currency as gold reaches record levels over $5,000.

Consumer Staples: Felix describes these as reliable, though 'boring,' investments during periods of high inflation. These companies sell essential goods like food and beverages, allowing them to pass price increases directly to consumers. This sector serves as a protective alternative to holding cash.

Airlines: Felix views this sector negatively due to the crushing impact of high fuel costs on profit margins. He mentions that institutional 'bankers' have been aggressively shorting airline stocks as a reaction to rising oil prices. For Felix, this industry represents a 'nice-to-have' consumer discretionary spend that suffers during economic uncertainty.

Mentioned Stocks

MSFT

Sentiment: BUY

Reasoning: Felix mentions US multinationals like Microsoft benefit from a weakening US dollar because they have significant overseas earnings in other currencies.

Loading chart...

LMT

Sentiment: BUYAction: RECOMMENDED

Reasoning: Felix predicts a 50% increase in the US defense budget. He advises looking at specialized defense technology and AI-driven systems rather than just the major indices.

Loading chart...

GOLD

Sentiment: BUYAction: RECOMMENDED

Reasoning: Felix views gold as the ultimate fear trade, noting it has surpassed $5,000 an ounce. He recommends gold miners and streaming companies as a hedge against a weakening US dollar and central bank buying activity.

Loading chart...

XLE

Sentiment: BUYAction: BOUGHT

Reasoning: Felix prefers energy infrastructure like pipelines and refineries over crude oil. He explicitly states that he and his team have been investing in oil service companies for months prior to the current conflict.

Loading chart...

AAL

Sentiment: SELL

Reasoning: Felix points out that airlines are being 'crushed' by high fuel costs and notes that many bankers are shorting the sector.

Loading chart...