Trading The Iran And Private Credit Sh*t Show

Submitted by QTR's Fringe Finance

Heading into Monday, our 26 Stocks For 2026 are still beating the S&P 500 by +7.7%.

On the macro front, there are really two things I’m watching right now: the Iran war and private credit.

Starting with Iran, these last few months have been a full system shock for oil. When you get escalating conflict in a region that sits at the center of global energy supply, you are effectively repricing inflation expectations in real time. Higher oil feeds directly into CPI expectations, which feeds into bond yields, which then tightens financial conditions and compresses equity multiples, especially for long duration assets.

But beyond that, war introduces uncertainty premiums everywhere. Shipping lanes, insurance costs, capital flows, currency volatility. It’s not linear. Markets don’t calmly digest war, they lurch.

Now layer on private credit, which is the exact opposite type of risk.

I’ve been flagging the sector as one of ten that I see as an avoid at all costs, and just days ago I wrote that conditions were worse than they appeared on the surface.

Over the last few weeks my conviction has only increased that the worst is still ahead and the chart I included in this piece showing the growth between 4Q25 redemptions and 1Q26 redemptions should make that very clear.

Private credit, like most of everything in finance, is run by psychopaths and assholes. But private credit and BDCs use Level 3 accounting, which allows people to pick a number out of the sky and use it to value assets with little rhyme or reason.

Psychopaths generally aren’t the first to come forward and say, “Hey, my dogshit fund that just funded my wife’s fake tits and my Porsche is actually just an air pocket full of nothing,” so they mark their illiquid crap higher than it should be forever—until they literally can’t for one more second due to redemptions. Then shit hits the fan in a big way. Congratulations, that’s where we’re at now.

So you’ve got a fast shock of the war and a slow burn. That combination is exactly why you’re seeing such sharp divergence across the watchlist.

And when you actually look at the data in the watchlist, it tells a very clear story. On an equal weight basis, the watchlist is up roughly +3.95% versus the S&P down about -3.84%, which translates into nearly 8% of outperformance. That’s not just a nice stat, it tells you the watchlist is positioned in areas that are benefiting from the current macro regime rather than being dragged down by it.

Let’s dig into the details and the names...(READ THIS FULL WATCHLIST ANALYSIS HERE).