What a $100 barrel reveals about your stocks

Summary: A prolonged oil shock does not affect all businesses equally. This story explores how crises that cause real economic damage, not just panic, expose which companies have resilience through pricing power, strong cash flows and export earnings and which are far more vulnerable than the market realises.

Summary: A prolonged oil shock does not affect all businesses equally. This story explores how crises that cause real economic damage, not just panic, expose which companies have resilience through pricing power, strong cash flows and export earnings and which are far more vulnerable than the market realises. Last month, I wrote something I had not written in 30 years. I said that the standard advice, stay the course, this too shall pass, may not apply in its usual form to the US-Iran war. Hundreds of readers wrote back. The question in almost every email was the same: you told us it is different. Now tell us what to do. This column is not about mutual funds. It is about stocks. And for the stock investor, the answer begins with a distinction that most market commentary has missed. Sentiment damage vs physical damage Most market crises damage the mood. Valuations get ahead of earnings. Panic sets in. Prices fall. But the factories are still there. The workers are still there. Mood recovers. It always does. The conflict in West Asia is damaging things. If even a fraction of the world’s crude refining capacity is destroyed, that capacity will not return even if confidence improves. It returns when steel is welded, and pipelines are rebuilt. That takes years. For the stock i