What to Do With Your Cash When the World Is on Fire

A mungbeans.io framework analysis — March 14, 2026

The Situation

Let’s state it plainly. The world is in a geopolitical crisis that hasn’t had a parallel since the Gulf War.

On February 28, the United States and Israel launched coordinated airstrikes across Iran, killing Supreme Leader Ali Khamenei. Iran retaliated by effectively closing the Strait of Hormuz — the narrow passage through which one-fifth of the world’s daily oil supply flows. As of March 11, the IRGC has stated that “not one litre of oil will get through the Strait.” WTI crude has surged from $72 to $98.71 — a 37% move in two weeks. Brent is above $100. Gasoline is up 19% in a month. Goldman Sachs is modeling $110 oil; Iran’s IRGC is promising $200.

The cascade effects are already here. South Korea’s KOSPI crashed 12% in a single day on March 4 — its worst session since 9/11 — because Korea imports 70% of its oil through the Strait. Japan’s Nikkei dropped 5.2%. Qatar’s helium production facility at Ras Laffan was hit by an Iranian drone, threatening the global semiconductor supply chain — helium spot prices have doubled, and chipmakers like Samsung and SK Hynix are on a two-week supply clock. The Trump administration has responded with a 172-million-barrel release from the Strategic Petroleum Reserve, lifted Russian oil sanctions for 30 days, and the IEA has coordinated a 400-million-barrel release across 32 nations — all to keep oil below the $140 threshold that Oxford Economics models as the recession trigger.

Meanwhile, the market isn’t crashing. The S&P 500 is down only 3.4% from its January highs, hovering near 6,836. The VIX is elevated but not panicked. Energy stocks are surging. Defense stocks are surging. Gold is at all-time highs. And most investors are frozen — staring at their screens, unsure whether to buy, sell, hedge, or simply hoard cash and wait.

This article isn’t a prediction about what happens next in Iran. It’s a framework analysis: what does the mungbeans.io 200-week moving average system tell us about investing during geopolitical crises, and what are the historically rational responses to this specific type of event?

What the 200-Week Framework Shows During Crises

We ran the S&P 500 against its 200-week moving average during every major geopolitical and oil crisis since 1990. The results are instructive — and counterintuitive.

The Data

The Pattern

Two things jump out immediately.

First: starting position matters more than the crisis itself. When the market entered a crisis already below or near the 200WMA (Gulf War, 9/11, Iraq War, COVID), the 12-month forward returns were overwhelmingly positive — averaging +26% over the subsequent year. The market had already priced in pessimism, and the crisis either proved to be the bottom or was quickly overshadowed by policy response.

When the market entered a crisis well above the 200WMA (Russia-Ukraine at +30.9%), the 12-month return was -5.0%. The market had further to fall because it started from an elevated position with limited margin of safety.

The 2008 GFC is the outlier: the market started only -3.5% below the 200WMA but fell another 37% over six months because the crisis was financial rather than geopolitical — it struck at the foundations of the banking system rather than at commodity flows.

Today, the S&P 500 sits +31.2% above its 200WMA. This is almost identical to the Russia-Ukraine positioning of +30.9%. The historical parallel is uncomfortable: the market is not offering a discount to long-term trend, which means there is no margin of safety from the 200-week framework’s perspective.

Second: the broader statistical record is clear. Across all periods since 1993, stocks purchased when the S&P 500 was below its 200WMA returned an average of +11.0% over the next twelve months with a 64% positive hit rate. Stocks purchased when the S&P 500 was above its 200WMA returned +10.6% — nearly identical on average, but with notably different tail risk profiles. The below-200WMA buys captured dramatic recoveries (COVID +73%, Iraq War +26%); the above-200WMA buys were more vulnerable to extended drawdowns.

The framework’s message is not “sell everything.” It’s “the broad market is not offering you a discount right now, so be extremely selective about where you deploy capital.”

The Four Playbooks

Given the current positioning — geopolitical crisis with oil above $100, market still elevated above 200WMA, inflation re-accelerating — there are four rational responses. Each has historical precedent. Not all are equally appropriate.

Playbook 1: Hoard Cash (The Dragon’s Vault)

The thesis: Cash is an option on future opportunity. If the crisis escalates — Strait stays closed, oil hits $140, recession triggers — the S&P 500 will fall below its 200WMA, and that is when the framework tells you to buy aggressively. Holding cash preserves your ability to act when the signal actually fires.

Historical precedent: Investors who held cash during the early stages of the GFC (September 2008) and deployed it in March 2009 — when the S&P 500 was 45% below its 200WMA — captured the greatest buying opportunity of a generation. The 12-month return from the March 2009 low was +68%.

The problem: Cash earns you nothing in an inflationary environment. With CPI likely to re-accelerate toward 3–4% as oil prices flow through the economy, uninvested cash is losing purchasing power every month. And timing the bottom is extraordinarily difficult — in COVID, the market went from -10% below the 200WMA to +46% in six months. If you waited for “clarity,” you missed the move.

When this is right: When you believe the crisis is the beginning of a broader economic contraction, not an isolated geopolitical shock. If the Strait stays closed for months, oil sustains above $120, and the US enters a recession, the S&P 500 will eventually cross below the 200WMA. That’s when cash becomes the most valuable asset you own.

The framework says: Cash is not an investment. It’s a call option. Hold it only if you have the discipline to deploy it when the signal fires — and not a moment later. Most investors hold cash too long and miss the recovery entirely. The data shows that 84% of all trading weeks occur above the 200WMA. The windows when the market is below the line are short, violent, and psychologically terrifying. Cash only works if you can pull the trigger when everything feels like it’s falling apart.

Playbook 2: Buy the Crisis Stocks (Energy, Defense, Commodities)

The thesis: The Iran war creates direct beneficiaries. Oil producers, defense contractors, and commodity plays see immediate earnings acceleration. Buy the stocks that profit from the crisis.

Current positioning:

The problem: Every one of these trades is already extended. Energy is 40% above its 200WMA. Defense is 50–80% above. Gold is 93% above. You’re not buying these at a discount — you’re buying into a momentum trade that’s already moved 20–70% this year. The mungbeans framework was designed to find stocks below the line, not to chase them at multi-year highs.

Historical lesson: During the Russia-Ukraine crisis, energy stocks surged 40% in the first two months. Investors who chased the move at the peak gave back most of those gains over the following year. Oil went from $130 to $70. Energy stocks mean-reverted. The crisis premium evaporated.

When this is right: If you believe the Strait of Hormuz stays closed for 6+ months and oil sustains above $120, energy stocks could continue running. But this is a macro bet on the duration and severity of the conflict — not a value investment. The framework has no edge here because these stocks are all massively above their 200WMAs.

The framework says: Crisis trades are speculation, not investing. They work until they don’t, and when geopolitical situations resolve (or even de-escalate marginally), the snap-back is brutal. If you want energy exposure, the framework would point you toward energy stocks that have fallen below their 200WMAs during the broader market disruption — contrarian plays within the crisis sector — not the obvious beneficiaries already priced for sustained conflict.

Playbook 3: Buy the Victims (Stocks Crushed by the Crisis)

The thesis: Every crisis creates collateral damage — stocks that sell off not because their businesses are impaired but because fear and forced liquidation drive prices below fair value. These are the stocks that cross below their 200-week moving averages, and they’re exactly what the mungbeans framework was built to find.

Who’s getting crushed right now:

The semiconductor supply chain is under direct threat from helium shortages and rising energy costs. Asian-exposed companies are selling off on Korea/Japan fears. Consumer discretionary names are weakening on inflation expectations. Airlines and travel stocks are falling on oil costs. And across the board, high-multiple growth stocks are compressing as rate-cut expectations evaporate in the face of re-accelerating inflation.

This is where the framework generates its highest-conviction signals. The historical data is unambiguous: stocks purchased below the 200WMA during crisis periods produce significantly better forward returns than stocks purchased above it. The Iraq War was the template — stocks that crossed below the line in early 2003 generated average returns of 25.9% over the following twelve months. COVID was even more dramatic: below-200WMA buys in March 2020 returned 73% in twelve months.

When this is right: Always. This is the framework’s core competency. Geopolitical crises create fear-driven selling that pushes high-quality businesses below their long-term trend lines. The business fundamentals haven’t changed — the prices have. That’s the definition of opportunity.

The framework says: This is where you should be spending your energy. Not watching oil prices tick by tick. Not debating whether the Strait reopens in April or August. Instead: screen for quality companies that have crossed below their 200WMAs in the last 30 days, apply the five-layer forensic analysis, and deploy capital into the ones where the crisis has created a price dislocation without creating a business impairment.

The stocks we’ve already analyzed in this series illustrate the principle. LULU at 50% below its 200WMA isn’t selling off because of Iran — it’s selling off because the market has repriced growth expectations. But the Iran crisis amplifies the drawdown, creating an even wider gap between price and value. IRDM at 29% below its 200WMA operates a satellite constellation that is more valuable during a Middle East conflict, yet the stock keeps falling. These are the kinds of disconnects that produce outsized returns when the fog clears.

Playbook 4: Hedge the Downside (Puts, Volatility, Inverse Positions)

The thesis: Buy put options on the S&P 500 or individual overextended names. If the crisis escalates and the market drops 15–20%, the puts pay off dramatically. If it de-escalates, you lose the premium — an insurance cost you’re willing to pay.

Current cost: VIX is elevated but not extreme, meaning put premiums are higher than normal but not at panic levels. SPY puts at the 200-day moving average (roughly -10% from here) are priced at approximately 2–3% of position value for 3-month protection.

Historical context: Hedging with puts during the early stages of the Russia-Ukraine war (February 2022) was profitable — the S&P 500 fell 8.6% over the following six months. Hedging during COVID was extraordinarily profitable for those who positioned before the crash. But hedging after the crisis has already begun typically captures less downside because the market has already repriced the immediate risk.

When this is right: If you have a large equity portfolio and can’t stomach a 20% drawdown. Put protection at current levels is a rational insurance purchase — not a speculative bet, but a risk management tool.

The framework says: The mungbeans system doesn’t use derivatives — it’s a long-only, buy-and-hold framework that identifies value through the 200WMA signal. But the framework does tell you something important about hedging: the market is 31% above its 200WMA, which historically means downside risk is elevated. The framework’s entire thesis is that buying above the 200WMA produces worse risk-adjusted returns than buying below it. If you’re fully invested at current levels and the market drops to or below the 200WMA, you’ll wish you had some protection.

What Should You Actually Do?

Here’s what the framework tells us, synthesized across 30+ years of data and five prior geopolitical crises:

The broad market is not a buy right now. At +31.2% above the 200WMA, the S&P 500 is not offering a margin of safety. The only crisis that started from a similar position (Russia-Ukraine) produced a negative 12-month return. This doesn’t mean the market will crash — it means the risk-reward of buying the index at current levels is unfavorable relative to historical norms.

Individual stocks below the 200WMA are still a buy — and a better one than usual. Crisis-driven selling pushes more stocks below the line, increases the magnitude of the discount, and creates wider price-to-value gaps. The historical forward returns for below-200WMA stocks during crisis periods are significantly better than during calm markets. This is the framework doing exactly what it was designed to do.

Energy, defense, and gold are not framework buys. They’re all massively above their 200WMAs. They may continue to rise if the crisis escalates, but the framework has no edge in chasing momentum. If you want exposure to the war trade, understand that you’re speculating on crisis duration, not investing on value.

Cash has option value, but it’s a wasting asset. With inflation likely to re-accelerate, holding too much cash for too long erodes purchasing power. The optimal use of cash is to deploy it selectively into below-200WMA opportunities as they appear — not to wait for the “all clear” that never comes. The market’s best buying opportunities occur during maximum fear, not after the fear subsides.

The crisis itself is not the investment thesis. Iran, the Strait, oil prices — these are catalysts that create temporary dislocations. They’re not reasons to buy or sell specific stocks. The 200-week moving average filters out geopolitical noise by definition: it’s a four-year smoothed average that has survived the Gulf War, 9/11, Iraq, the GFC, COVID, and Russia-Ukraine without modification. The framework doesn’t need to know whether the Strait reopens next week or next year. It just needs to identify quality businesses at discounted prices.

Where to Look Right Now

Without making specific recommendations, here’s where the framework suggests focusing attention during this crisis:

New crossers driven by collateral damage, not direct impairment. Companies that are falling because of broad market fear, not because their businesses are directly threatened by the Iran conflict. Software companies, domestic service businesses, and consumer brands with pricing power are all potential candidates if they cross below the 200WMA.

Oil-dependent businesses that have over-corrected. Airlines, shipping companies, and transport businesses are selling off on oil costs, but if the crisis resolves or oil stabilizes, these stocks may be below the 200WMA at prices that assume permanently elevated energy costs.

Asian-exposed names punished by Korea/Japan sell-offs. Multinational companies with Asian revenue are being sold alongside Asian domestic stocks. If the business is global and the revenue is diversified, the Asia sell-off may create a 200WMA crossing that has nothing to do with the company’s actual prospects.

Cash-rich companies with zero or low debt. In an inflationary, rising-rate environment with geopolitical uncertainty, balance sheet quality becomes the margin of safety. Companies that can weather $140 oil, 4% inflation, and a potential recession without financial distress are the ones that survive to benefit from the recovery.

The mungbeans.io screener is designed for exactly this moment. When the world is on fire, most investors either panic-sell or freeze. The framework says: ignore the headlines, watch the 200-week line, and buy the quality businesses that cross below it. The historical evidence, across every crisis in the last three decades, says this approach works.

The fire will go out. The stocks you bought while it burned will still be there.

This analysis is for informational purposes only and does not constitute investment advice. The author does not hold positions in any of the ETFs or securities discussed. Market conditions during geopolitical crises are inherently unpredictable, and past performance does not guarantee future results. Always do your own research and consider your personal risk tolerance before making investment decisions.

Framework methodology: mungbeans.io 200-week moving average screening system