The Scorecard: Feb 28 — Mar 15, 2026
Operation Epic Fury began on February 28, 2026. Fifteen days later, we have the first complete dataset of how every major asset class performed during a modern supply-shock war. The results demolish several assumptions that most portfolios were built on.
Spread
74.2pp
CL=F vs AAL
Assets Positive
11/38
29% survival rate
Chart 1: The Complete War Scorecard
The Four Things That Worked
| # | Asset | Return | Why It Worked |
|---|
| 1 | Crude Oil (CL=F) | +51.0% | Direct beneficiary of supply shock. Hormuz -96% = 20% global supply offline. |
| 2 | Oil Producers (OXY) | +9.9% | Revenue windfall. Every $10/bbl = ~$1B additional cash flow for OXY. |
| 3 | Bitcoin (BTC-USD) | +6.0% | "Digital gold" thesis validated while actual gold failed. Capital flight vehicle. |
| 4 | US Dollar (DXY) | +2.7% | True safe haven. Flight to reserve currency during geopolitical crisis. |
Notice the theme: only the commodity itself and the currency of the country starting the war worked. Oil is the war. The dollar is America. Everything else — stocks, bonds, gold, defense stocks, managed futures — either lost money or barely broke even.
The Three Things That Should Have Worked But Didn't
1. Gold: The Safe Haven That Wasn't
Gold (GLD): -4.1% during a literal shooting war.
Gold is supposed to be THE crisis hedge. It's been the safe haven for 5,000 years. In the first 15 days of the biggest Middle East war since 2003, gold lost more than stocks. GLD -4.1% vs SPY -3.0%.
Why it failed: Gold responds to REAL interest rate expectations, not geopolitical fear. Oil at $99 = inflation fears = expectation that the Fed holds or hikes = real rates stay high or rise = gold underperforms. Gold is an inflation hedge over years, not a war hedge over weeks. The same oil shock that creates the crisis creates the real-rate environment that suppresses gold.
2. Treasuries: Bonds Broke the Promise
TLT: -4.6% — worse than stocks, worse than gold.
In every prior crisis (2008, 2020, 9/11), Treasuries were the ultimate shelter. Not this time. Long bonds lost 4.6% in 15 days. Even short-term bonds (SHY) lost 0.7%.
Why they failed: Flight to safety assumes the crisis is DEFLATIONARY (demand shock). This crisis is INFLATIONARY (supply shock). Oil at $99 means higher CPI, which means the Fed can't cut, which means bonds can't rally. The war premium on oil IS the anti-bond signal. Bonds only work as crisis hedges when the crisis kills demand. This one killed supply.
3. Defense Stocks: The War Premium Was Already Priced
LMT: -0.3% since war start. ITA (defense ETF): -4.7%.
Lockheed Martin was flat. The iShares Aerospace & Defense ETF lost nearly 5%. NOC (+1.9%) and RTX (+3.1%) gained modestly. The "defense play" returned only +1.6% on average since the war started — barely beating cash.
Why it underperformed: Defense stocks' 3-month gains (+34.5% for LMT) happened BEFORE Feb 28 — the market anticipated the war. By the time bombs fell, the war premium was already embedded. Buying defense on Day 1 of the war was buying the news after the rumor. The 3-month chart looks great; the 15-day chart is flat.
Portfolio Report Cards
How did the standard allocation strategies perform across 15 days of supply-shock war?
Oil Producers (XOM/CVX/OXY)
+6.4%
B
Dollar Long (DXY)
+2.7%
B-
Defense (LMT/NOC/RTX)
+1.6%
C+
Cash (T-Bills / USFR)
+0.2%
C
Mag 7 (Equal Weight)
-2.2%
D+
Managed Futures (DBMF)
-2.4%
D
"Safe Haven" (GLD+TLT)
-4.4%
F
The devastating finding: The "safe haven" portfolio (50% gold + 50% long Treasuries) lost more than the S&P 500 during a shooting war. A portfolio specifically designed for geopolitical crisis returned -4.4%, while the index it was supposed to protect against returned -3.0%. The textbook failed. Cash (+0.2%) beat both gold and bonds. The boring answer was the right answer.
Chart 2: Model Portfolio Performance — 15 Days of War
Why the Textbook Was Wrong
The failure of conventional crisis hedges has a single root cause: this is a supply shock, not a demand shock. Every portfolio model was built for the crises of 2008 and 2020 — demand collapses where consumers stop spending and the economy freezes. In those crises:
| Asset | Demand Shock (2008/2020) | Supply Shock (2026) | Why Different |
|---|
| Gold | +25-30% | -4.1% | Real rates fell in 2008/2020, rising in 2026 |
| Long Bonds | +15-20% | -4.6% | Fed cut in 2008/2020, can't cut with $99 oil |
| Dollar | +5-10% | +2.7% | Dollar works in both (reserve currency flight) |
| Oil | -40-60% | +51.0% | Oil CAUSED this crisis; it was a victim in 2008/2020 |
| Stocks | -30-50% | -3.0% | Smaller decline because energy/defense offset damage |
The fundamental error: portfolio models treat "crisis" as a single category. It's not. A supply shock inverts the correlation structure that demand-shock models depend on. Gold goes down instead of up. Bonds go down instead of up. Only the commodity driving the crisis and the reserve currency work. Everything else is noise.
The Counterintuitive Winners
Bitcoin: +6.0% — The Digital Gold That Worked When Gold Didn't
BTC gained 6% during the war while gold lost 4.1%. That's a 10-point outperformance of "digital gold" over actual gold during an actual geopolitical crisis. The thesis: BTC doesn't respond to real rates (it has no yield to compare against). It responds to trust in the system. When the US starts a war that breaks the global oil market, some capital flows to the thing that's outside all sovereign control. COIN's stock (+11.5%) confirms institutional adoption of this trade.
Micron (MU): +6.1% — The War-Proof Semiconductor
While most of tech fell (AAPL -8.3%, META -4.6%, NVDA -0.6%), MU gained 6.1%. Memory chips are essential for defense systems, AI infrastructure, and data centers that don't stop running during wars. MU's 3-month return of +76.7% is partially war-driven (defense demand) and partially structural (AI memory cycle). It was the only Mag 7-adjacent stock to meaningfully outperform during the war period.
MSFT: +1.2% — The Enterprise Anchor
Microsoft was one of only two Mag 7 stocks positive since Feb 28 (with AMZN at +0.4%). Despite being -17.3% over 3 months, MSFT has actually RECOVERED during the war period. The thesis: enterprise software has zero oil sensitivity. Cloud contracts are fixed. The war doesn't change Azure spending. MSFT's divergence from AAPL (-8.3%) reflects hardware vs software exposure — iPhones ship through Hormuz-adjacent supply chains; Azure doesn't.
The Casualties List
| Rank | Ticker | War Return | Damage Driver |
|---|
| 1 | AAL | -23.2% | $34B debt + jet fuel at $99 oil = existential |
| 2 | UAL | -22.7% | International routes disrupted + fuel costs |
| 3 | JETS | -17.0% | Entire airline sector in freefall |
| 4 | ASGN | -14.8% | IT staffing frozen — nobody hiring during war |
| 5 | LEN | -14.7% | Homebuilder: no rate cuts = no mortgage relief |
| 6 | DAL | -13.2% | Premium airline still fuel-dependent |
| 7 | ITB | -12.8% | Homebuilder sector breakdown |
| 8 | DHI | -11.5% | Entry-level homes + rate sensitivity |
| 9 | UPWK | -9.5% | Freelance demand evaporated |
| 10 | FVRR | -9.0% | Gig economy hiring completely frozen |
Two sectors account for 8 of the top 10 casualties: airlines (direct oil victims) and housing/staffing (indirect rate victims). The war creates the oil price that prevents the rate cuts that would save housing and employment. The casualties list IS the transmission chain documented in Reports #105-112.
Chart 3: Supply Shock vs Demand Shock — Why the Playbook Inverted
Lessons for the Next 15 Days
What the first 15 days teach about the next 15:
1. Don't fight the supply shock. The only strategy with strong positive returns was being long the commodity driving the crisis. In a supply shock, the source of the crisis IS the trade. Everything else is a derivative.
2. Cash beats sophistication. T-bills (+0.2%) beat gold (-4.1%), bonds (-4.6%), managed futures (-2.4%), and the S&P 500 (-3.0%). The most boring allocation was the 4th best performer out of 12 model portfolios. When the textbook breaks, simplicity wins.
3. The safe haven rotation is real. Dollar (+2.7%) and BTC (+6.0%) were the functional safe havens, not gold or bonds. This isn't a one-off — it may be the new regime. Supply shocks create inflation that kills traditional havens but boosts currency flight vehicles.
4. The ceasefire trade is the contrarian bet. Report #114 mapped the 35.5% ceasefire probability by April 30. If ceasefire happens, every asset on the casualties list reverses violently while every asset on the winners list gives back gains. The oil options market (P/C 0.07) is positioned for war continuation. The contrarian trade is the opposite.
5. Buy the victim, not the victor. Defense stocks were flat since war start despite +34.5% 3-month returns. The war premium was priced in BEFORE the war. Airlines at -23% are pricing in war continuation forever. If you believe in mean reversion (50% ceasefire by May 31), the victims have more upside than the victors.
Self-Falsification
This backtest has important limitations:
- 15 days is not enough: The 2008 crisis took 18 months. 2020 took 5 weeks to bottom. We may be in the early innings where the true safe havens haven't been activated yet. Gold could rally massively if the Fed is forced to cut despite inflation — that's a 2026 Q2/Q3 catalyst, not a Week 1-2 trade.
- Hindsight bias: "Buy oil during an oil war" seems obvious in retrospect. Pre-Feb 28, the consensus was that a US-Iran conflict was unlikely. The trade was only obvious after it was already working.
- Survivorship in the data: We're measuring from war start to now. We don't know the path — oil might have spiked to $110 and pulled back to $99. The peak-to-trough drawdowns within the period could be much worse than the endpoint-to-endpoint returns suggest.
- The next 15 days are different: FOMC, triple witching, SPR release, and potential ceasefire talks change the game. The first 15 days were "shock and awe." The next 15 are "now what?" Different regime, different winners.
The deepest inversion: The financial industry spends billions on crisis preparation. Tail-risk funds, gold allocations, long-duration bond hedges, managed futures, risk parity — all designed for the moment when everything goes wrong. The moment came. Everything went wrong. And every sophisticated hedge either lost money or barely broke even. Cash in a savings account at 4.25% beat a $2 trillion gold market, a $25 trillion Treasury market, and every managed futures strategy on the planet. The textbook wasn't just wrong about which way to trade — it was wrong about what a crisis IS. When the crisis comes from supply, not demand, the entire correlation structure that portfolios are built on inverts. Gold goes down. Bonds go down. The thing causing the pain goes up. And the sophisticates who hedged with everything except the obvious — the commodity itself — lost money protecting themselves against the wrong kind of disaster.