With the 2003 Second Gulf War so long ago, many investors have no experience of what a major war means for their portfolio. The civil wars in Iraq, Syria and Yemen have been comparative sideshows in terms of their economic impact outside those countries.
Of course nobody but a madman would actually want any sort of war, with its horrific consequences for those fighting and living under it. But as history shows, that has never stopped them happening in the past.
I remember being at a press conference in Dubai just before the start of the Second Gulf War in March 2003. Somebody came running up to me with spreadsheets and graphs in his hands to explain that now was the point of maximum uncertainty - just before the shooting started - and that this was the very lowest point to buy global stocks.
At the time I was a bit shocked that anyone could take such a cool view of an approaching disaster. Yet this particular contrarian investor had certainly got his timing right.
Right now in North Korea the drums of war are beating again. But nobody really believes anything will happen because it is almost 70 years since the First Korean War, and in all that time belligerent talk and weapons testing has not resulted in war.
However, with US President Donald Trump hinting that his current consultations with US military could be ‘the calm before the storm’ and ‘nothing else will works’ - that could change quite suddenly.
If war was to commence, it would be a dramatic and extremely violent affair. It would also upset the current complacency in extremely overvalued US and other global stock markets, with seriously negative consequences.
After the very quick and at first successful invasion of Iraq by the US and its allies the stock market went up. But it had reached rock bottom first. History could repeat itself again.
For what financial markets hate more than anything is uncertainty, and nothing is more uncertain than a war. It could turn out to be a pushover like Iraq - which later morphed into a disaster - or nuclear bombs might land on South Korea causing immense loss of life.
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Pricing of worst possible scenarios into stock markets is always a painful experience for those fully invested at the time, and the subsequent recovery can take many years, particularly when stock prices have reached record-breaking levels as they have today.
Conversely wars tend be very positive for commodity prices and interest rates.
Financial markets are then thinking further ahead and asking well what if this proves to be a longer commitment than originally advertised. The First World War was supposed to be over by Christmas but took four years to reach an inconclusive conclusion.
Therefore, markets assume that commodities ought to cost more because military equipment lost will need to be replaced. Also there is an assumption that inflation will follow the necessary printing of money to pay for the conflict.
So the Middle East sat on the world’s largest energy reserves would be a net beneficiary. Also on some calculations, more than one-third of the world’s energy supply flows would be disrupted by a conflict in Asia, and that alone would mean far higher oil and gas prices.
Opportunistic investors might care to buy up oil shares, for example, in the stock market mayhem that would result from a surprise conflict in North Korea or the build up to one.
One of my contrarian investment friends was thinking about South Korean shares as a clear buy in such a tragedy a couple of months back. Professional investors already have this situation on their radar but, like everybody else, have been loathed to jump the gun.
Classic safe havens like precious metals also move up and down in price on every news item about North Korea. Gold and silver would benefit due to fears about future inflation from money printing as well as a flight from riskier assets like overvalued stock markets and bonds.
If a North Korean war was to get completely out of hand, then gold could hit record highs as central banks would then have so many problems to deal with that fixing the gold price would be put on the backburner as it was in 2009 to 2011.
Rising interest rates from falling bond markets would put a big squeeze on all asset prices related to cheap money. Holding cash would be a better place to be, at least until the initial bear market was completed.
Real estate is a more difficult asset to call, however. It also has a safe haven appeal and in a time of chaos in stock markets, real estate can benefit as a less risky alternative.
A bad crash in the Dubai Financial Market in the mid-2000s did nothing to derail the then property boom, for instance, and in fact powered it to new highs just in time for the Global Financial Crash of 2008.
So while war is the worst of manmade tragedies it can be a friend to the opportunistic investor if you move correctly when it happens.
Sir John Templeton, one of the world’s most famous investors, made his first fortune by borrowing big to invest in undervalued US companies in the early days of the Second World War when the effect the war was to have on profits was not generally appreciated.
Unfortunately, today US stocks are very overvalued so it is impossible to make the same argument, and selling short is a more obvious course of action.
Buying precious metals now while prices are cheap is a far better analogy. Right now people prefer to gamble on bitcoin going up and Facebook shares rather than buy gold, and the contrarian in me reckons the consensus is wrong as usual.
Peter Cooper has been writing about finance in the Gulf for over 20 years