Is Iran Set To Attack California?
530: Drone Stocks, Pentagon's Elite Defense Team
Good morning kings.
Hope this week has been solid.
On Tuesday I dropped a fresh set of stock picks for Spring 2026 covering AI, Defense, Energy, Tech, and more.
The market fire sales are continuing for now, so don’t miss out on some potential rippers. ONDS 0.00%↑ is a name we’ve touched on recently that I think is about to send. You can check the full list out below:
Today we have some important major stories to cover.
Strait of Hormuz & Iran Updates
A development worth watching is the growing concern around the Strait of Hormuz and the potential use of naval mines.
U.S. intelligence and defense officials have warned that Iran could deploy sea mines in the Strait of Hormuz if the conflict escalates further. As of last night US officials are saying that Iran HAS laid mines in Strait of Hormuz according to the WSJ.
Whether that is actually true is beyond me. Could just be some classic war time propaganda.
BUT.
By now you should know that the strait is one of the most important energy chokepoints in the world, with roughly 20% of global oil supply passing through the narrow waterway between Iran and Oman. There’s already some big disruption in the region, in the video below you can see Iranian forces hit a U.S. owned oil tanker in the Persian Gulf.
Mining the strait would be one of Iran’s most effective asymmetric tools. A sort of flip the chess board over move because you are getting bodied so hard.
For those that don’t know naval mines are relatively cheap, difficult to detect, and can force commercial shipping to halt while minesweeping operations take place. Even a limited mining campaign could send insurance costs for tankers soaring and disrupt energy flows through the Persian Gulf.
This morning the Wall Street Journal reported that "Reopening the strait, military analysts say, may require a ground operation to seize the Iranian coastline."
Right now there’s about a 50% chance on Polymarket of the Strait returns to normal by April 30th.
Iran's new supreme leader for the time being, Mojtaba Khamenei, released a statement this morning with a pretty hardline sentiment. He wants US bases out of the region and called for the Strait to be closed. Energy Secretary Chris Wright has said that it is possible US naval vessels will start escorts before the end of this month.
If Iran does end up mining the strait you can pretty much guarantee this conflict lasts until late Spring early summer, as the clean up and ramifications from it will take months to fully play out.
Iran Plan to Drone California?
The other day when I added a section to Arb Letter (and posted on Instagram) about the threat of terrorism, false flags, or other events in the US, a bunch of people threw hissy fits. Some said to go touch grass. Others got mad.
Classic cope behavior.
We’ve seen this same thing since Covid. People get mad when you tell them how the world is changing.
They want it to all be sunshine and rainbows. They like to be the “nothing ever happens bros” or they just make disagreeing or downplaying things a personality.
They’re having a few tough years. Say a prayer for em.
One of the more bizarre headlines floating around this week involves a report that the FBI circulated to law-enforcement agencies in California warning that Iran had at least considered the possibility of launching drones at the U.S. West Coast.
“We recently acquired information that as of early February 2026, Iran allegedly aspired to conduct a surprise attack using unmanned aerial vehicles from an unidentified vessel off the coast of the United State Homeland, specifically against unspecified targets in California, in the event that the US conducted strikes against Iran.”
—FBI Bulletin
The concept, according to the intelligence bulletin, would involve launching attack drones from a vessel positioned offshore, essentially using a commercial or disguised ship as a launch platform. A shipping vessel, fishing boat, etc.
They could even be launched from South of the Border or within American cities, Iran’s connections with Mexico and nations in South America leads to some uncomfortable truths about the legitimacy of this threat.
But things gets weirder. Four Skydio X10D Drone systems were stolen from Fort Campbell in Kentucky back in late November, Army investigators are offering a reward of up to $5,000 for help identifying the perpetrators.
Some are claiming this is a psy op or even conditioning for an eventual false flag.
Even if a drone attack on California or any American state or city might seem implausible (it’s probably not), other threats have proven not to be so far.
The temperature is rising.
Since the invasion of Iran:
Austin shooting - A gunman (wearing a “Property of Allah” T Shirt and another with an Iranian flag) opened fire on a crowded nightlife district, leaving multiple people dead and several more injured.
Upper East Side bomb - An explosive device was thrown outside the NYC mayor Mamdani’s residence during anti war demonstrations. The FBI arrested two individuals later found to have been radicalized by ISIS
Flights grounded - Airlines have begun canceling and rerouting flights across parts of the Middle East as security concerns escalate with multiple bomb threats and scares. Reagan Airport this morning announced on X:
Around 9 a.m., a suspicious package was located in a break room. The Airports Authority police established a perimeter for safety until the item can be cleared, that included moving passengers out of the D Concourse. We will let you know when we have an update.
Protests turning violent - Demonstrations tied to the conflict have erupted in several major cities, with arrests and clashes reported
Domestic security warnings - Law enforcement agencies are increasingly warning about the risk of lone actor or copycat attacks tied to the conflict
This reaction and set of events was almost immediate.
Ted Cruz said this week the United States should prepare for terrorist attacks from Iranian sleeper cells. “The danger has never been higher than right now.” Tucker Carlson said recently on his show: “The neocons know air strikes won't topple Iran. They need American ground troops. And the only way they will get them is by waiting for or manufacturing another 9/11 style terror attack on US soil to justify it.”
I don’t share these updates or give you guys color on this to be edgy or extreme, I do it because the majority of normies don’t think about things like this. I can tell you right now, all it would take is a single lone wolf actor or drone attack in my suburban town to plunge the entire thing into chaos.
Really makes you think about how soft the homeland has become and how vulnerable we might be. Imagine a handful of incidents across the country.
With the porous open border we had for years all of these threats are amplified. That can be true in addition to politicians wanting to justify further action in Iran. On top of that we have the DHS shutdown which is causing TSA agents to quit and go months without pay.
Don’t let all of this drive you nuts, but also realize it’s not that far fetched that we see more incidents in the coming weeks.
In the infamous words of Sgt. Griggs from Call of Duty 4 “Stay Frosty”.
Other Global News Updates
The U.S. medical tech company, Stryker SYK 0.00%↑ was hit by a cyberattack by an Iranian linked hacker group
The National Guard Bureau has announced the activation of the 260th Special Purpose Brigade within the Washington D.C. Army National Guard (OSINT Defender)
Various reports now indicate the Pentagon has spent more than $11.3 billion in the first 6 days of the war against Iran
A laundry fire on the US aircraft carrier USS Ford has injured two the US military says (InsiderPaper)
Financial Markets
Major US indices are off to a rough start this morning as oil continues to surge (trading around $95). It would seem some panic is beginning.
Equities have been extremely choppy as traders start to price in the possibility that higher energy prices could keep inflation sticky and delay the timeline for interest rate cuts.
Another interesting development this week involves the Pentagon moving deeper into the world of finance.
The Department of Defense is reportedly assembling an elite 30-person team of investment bankers pulled from firms like Goldman Sachs, Morgan Stanley, JPMorgan, and Bank of America. Their goal is to help deploy roughly $200 billion into defense investments and acquisitions over the next three years.
Some of you keep asking why I am so bullish on defense.
Stop sleeping on our picks (you can find them here).
Should be painfully obvious by now lol. Wall Street is increasingly being pulled directly into the national security playbook.
The initiative would effectively create an internal “economic defense unit” tasked with identifying strategic deals, financing defense companies, and directing capital toward industries considered critical to national security.
So sharpen up your resumes kings.
You might have a shot at a Lord of War Banker job soon.
Private credit defaults are up 4x since 2024 (Illiquid Insights)
PLTR 0.00%↑ is partnering with Ondas ONDS 0.00%↑ and World View to build an AI-enabled intelligence, surveillance, and reconnaissance platform for defense and security customers (Polymarket Money)
Profits returned to Private Equity investors are at a 16-year low (Unusual Whales/Bloomberg)
Enterprise software firm Atlassian announces its laying off 10% of its workforce to restructure around AI (Polymarket)
Deutsche Bank has disclosed approximately $30 billion in exposure to private credit in its recent annual report. Bank is down 6% today
Oil has been ripping higher this week as traders price in the risk that tensions in the Persian Gulf could escalate further. Brent briefly traded north of $100 after tanker attacks.
The situation has picked up even more attention after President Trump posted on Truth Social warning Iran against interfering with shipping in the Gulf, signaling that the U.S. is watching the waterway closely.
The Kobeissi Letter shard on X this morning: As US oil prices rise above $95/barrel, our models indicate that if current levels are sustained for 3 months, US CPI inflation would rise to ~3.2%. This would put US inflation at its highest level since May 2024.
For now the market is essentially trading the “what if Hormuz gets messy” scenario and it definitely feels like what was intended to be quick limited strikes to incapacitate Iran is now bleeding into another drawn out conflict with no clear ending in sight.
Crypto
Crypto has been grinding through another volatile week.
Bitcoin spent most of the past several days chopping between roughly $66K and $70K, repeatedly testing the psychological $70K level but failing to break through it with conviction.
Every time it looks like momentum is building, another macro headline knocks it back although it is holding pretty steady all things considered.
Despite the macro chop large players continue to accumulate. One of the biggest corporate Bitcoin holders (Strategy) added tens of thousands of coins worth over a billion dollars recently, continuing a steady pattern of buying during volatility.
BlackRock has debuted a staked Ether ETF, letting investors earn staking rewards alongside ETH price exposure (CoinTelegraph)
Strategy has purchased another $1.3B of Bitcoin
New investment products tied to AVAX are beginning to emerge as asset managers look beyond Bitcoin and Ethereum for the next wave of crypto exposure
Exchanges and fintech platforms are exploring on-chain versions of traditional stocks, with companies like Nvidia and Tesla often cited as potential candidates for tokenized trading
Crypto is unlikely to give us a hint on its next move until the Iran debacle plays out. For now I am watching for a rally from Bitcoin.
ETH + alts are dormant for now. Which is an excellent time to research what you want exposure to when things clear up.
Have a great rest of the week guys. There’s a chance I drop another post before Monday if we see any major happenings in the Middle East. We will do another deep dive on crypto next week as well as a refresher post on online business.
Discord link is HERE for those interested. We are now closing in on 2,000 members.
Godspeed
Andy