Iraq War – 10 Years On. Still shock and no awe. A personal perspective

This last week or so has seen us remember* the 10th Anniversary of the Second Iraq War.  (* I’m not really sure that the word ‘celebrate’ would be the right word to use in this context.) It’s been interesting to read the views of people ten years on. I would ask you the reader to please indulge me as I offer my own perspective as a trader and an ex-military guy who’s friends took part in this war.

Naturally as Traders we know how easy it is to be right in hindsight and how difficult it is to make decisions at the right hand edge of the screen as things unfold in real-time.  History can sometimes be unkind on Generals and politicians who had to make decisions at the time based on incomplete evidence.  However I believe in this situation, the case for war in Iraq, there was a very real narrative before hand that this was a flawed plan and war was going to happen for all the wrong reasons.  It was clear that the invasion of Iraq was part of a bigger agenda and that the reasons for war given to us were at best, weak, at worst, downright fraudulent.

When someone holds the largest ever anti-war rally in the history of the world you know something is wrong.  When your main allies of Canada, New Zealand, Germany, France all choose not to follow the US/UK into war then something is up. When your main regional neighbours/players Saudi Arabia and Turkey remove their support and not even provide tacit physical and military support for the war then you know something is wrong.

As for the case of WMD’s at the time I was open minded. I wasn’t open to the Intel but I knew that Saddam had ‘form’ when it came to using chemical weapons and I know that any organisation (in this case the Hussein/ Baath party infrastructure) will do anything in its means to ensure its survival so it was plausible that there ‘ may’ have been chemical weapons and that they ‘could’ be used. However any one with half a brain knew that really the WMD piece was just another element that was being manipulated to encourage the case for war.

I spent the first night of the Air War (known as Operation Telic for British Forces) having a few drinks in a bar watching the build-up and the news unfold.  I had very mixed feelings about it all.  On the downside I was struggling with my decision to turn down the offer to return to the military to engage in what was pitched to me as “my generations great adventure”.  Whilst I may not have agreed with the strategic reasons for the war, part of me desperately wanted to be there and be involved. Most of my best friends were out there on their squadrons and I was struggling with coming to terms with my decision to turn down the RAF’s ‘once in a career opportunity’ to re-enlist. (Despite my reservations about the cause and reason for war I have every respect and admiration for the young men and women who carried out their orders and executed the tactical plan.)

The other downside of being in that bar drowning my sorrows?  I missed out on a hot date with a gorgeous blonde girl called Rachel. C’est la vie.

The upside of being in that bar drowning my sorrows? I ended up buying both the FTSE and Oil next day on a spread-bet.  Did I have some great trading strategy or marvelous insight? No, not at all. Did I know at the time that I would be picking the bottom of the post dot-com crash? Once again  no, not at all.  I was just very, very lucky. I knew that markets hated uncertainty and that now the war was on we had an element of certainty and it would likely cause a spike in Oil prices.  Take a look at the attached FTSE monthly chart. There was big hi-wave / pin bar candle for Mar 2003, after a couple of bearish years , the market reversed, turned bullish  and never looked back until the GFC of 2008. (The weekly and daily chart from those days is also worth looking at.)

The next upside was working from home the next day so I could watch the constant news feed. As soon as I saw what the Allies Day 1 war plan was, namely to secure the Oilfields in the north and south of Iraq , I knew that I’d made the right decision to not go back.

Laying my life down to defend a clear and present danger to my country? Yes, I’d have done it. Its part of the gig.

Put my life on the line to increase US access to cheap Oil whilst denying Chinese/Iranian access and making a healthy profit for shareholders and politicians? No, thanks. I think I’ll pass on that opportunity.

So what opportunities did come out of that operation for me?  Firstly when I watched the American rescue of Private Jessica Lynch, the American solider whose convoy was ambushed. She was injured and taken captive.  I noticed that in the footage of the rescue (courtesy of NVGs) that all the special forces had not only a pistol but a Tazer strapped to their leg. Once I saw that I realised everyone else would see that and what Special Forces used today the rest of the worlds Armies and Police forces would be using tomorrow.  That made $TASR a buy.

The other thing I noticed was that on every TV News footage of the war they always showed footage of Allied Jets and Helicopters flying over whilst they deployed chaff and flare counter measures.  (Makes for an interesting TV shot I suppose.) This got me thinking into how the Forces must be burning through their counter-measures stocks and that whoever supplied them would have a healthy order book. I did some research and found a UK company called Chemring (LON:CHG) that focused on countermeasures for the US Military. Yep, they were a buy as well.

This is a good reflection of my investing style over my Trading style. Trading is all about rules, discipline, consistency and risk management. Investing , for me, is where my more discretionary, creative, intuitive side comes into play. I literally wait for a story to hit me (as in Tazr and the over-use of countermeasures) and then do some research. If the research backs up my intuitive reading of a trend / opportunity then I will invest.  I invest very rarely because opportunities that literally leap off the page at me come around rarely. I’ve learnt to trust myself over the years

So was it all worth it?  The US spent $60Bn and lost more than 4400 lives. The loss of Iraqi lives numbers somewhere between 10,000 and 100,000 depending upon your sources. We lost 179 lives and spent billions of sterling.  Was it worth it for my Forces friends? You’d have to ask them; I never do. I expect that cognitive dissonance would mean they’re unlikely to give a really straight answer. Are we any safer because of the war? Not noticeably.  Are the Iraqis? I suppose we should ask them, but I doubt it.  Progress has been interminably slow since the war ended.   There’s still a lot of this story to play out. (Dont even get me started on the CPA and the mis-use of all those UN/Iraqi funds!)  It maybe another 10-20 years before we see how it’s all turned out for us and the Iraqi’s.