“Damn John Jay! Damn everyone who won’t damn John Jay! Damn everyone that won’t put lights in his windows and sit up all night damning John Jay!”

Jay had just returned from London with his infamous treaty. The United States would settle its old debts, Britain would leave its frontier forts, and the two countries would trade instead of shoot. 

George Washington signed it. The sensible man figured a young republic with no navy, no money, and barely an army shouldn’t pick a fight with the biggest empire on Earth over what the kids today would call “feels.”

Of course, that didn’t stop The Great Unwashed from losing their minds.

One newspaper editor called Jay “the arch traitor” and invited his readers to seize him, drown him, burn him, and flay him alive.

In Philadelphia, a mob put his effigy in the pillory, guillotined it, set its clothes on fire, and blew it up with gunpowder.

In New York, Alexander Hamilton stood up to defend the treaty, and the crowd pelted him with rocks. Aaron Burr would’ve been saved a heap of trouble if any of them had decent enough aim.

One effigy carried a sign: “Come up to my price and I will sell you my country.” British gold, they said. Mad King George had bought the American emissary!

The good-humored Jay joked that he could walk from Boston to Philadelphia at night by the light of his own burning effigies.

His treaty kept America out of a war it would have lost. It bought two decades of peace and trade. The frontier filled up, and the merchants got rich.

Hold that thought while we visit the Journal’s comments section.

The Journal Versus Its Own Readers

On Tuesday night, the Journal’s editorial board warned Trump might sit down with Putin and Xi to end the war in Ukraine. Oh, the horror!

The Board called it “Yalta 2.” They fretted about credibility, alliances, and the “post-1945 global order.” I disagree with nearly every line of its nonsense, but that’s a column for another day.

As so often happens, the comments section is where the gold is.

I hasten to remind you that The Journal is the house paper of American capitalism, read by people who own things, or so I thought. Its readers are furious at the editorial board, not for being too hawkish, but for being too soft.

“Tactical impulse,” the board wrote of Trump. The readers accused the board of “dancing around.” By my count, “traitor” or “treason” had appeared over a dozen times before I got tired of scrolling.

Russian asset. Russian puppet. Poodle. Useful idiot. Munich 1938. Molotov-Ribbentrop. The 25th Amendment. Impeach.

“VOTE BLUE!” shouted in the obligatory capital letters was surely penned by the only Journal subscriber with a nosering.

It was as if someone hacked the New York Times comment section and pasted the blue-haired vitriol among more civilized folks. Just for the hell of it.

One sage pontificated that Trump is in it for “Russian gold.” It’s been a full 230 years since Jay’s chalking, and the whiners still haven’t changed their script.

The best comment of the lot got exactly one upvote. A reader named John had the temerity to write, “Policy disagreements aren’t treason.”

The nerve!

What Treason Actually Is

The Founders had watched English kings hang men for disagreeing with them. So they wrote treason into the Constitution and made the target tiny on purpose.

Article III, Section 3 of the Constitution defines it thus: levying war against the United States, or adhering to its enemies, giving them aid and comfort. Two witnesses to the same overt act, or a confession in open court.

No other crime gets its own definition.

They did that because they knew how the word was misused.

The Founding Fathers, who wanted neither conflict nor entangling alliances with any country, knew the definition couldn't be wider. If the man who wants to end the war is a traitor, the warmongers don’t have to explain anything. His motives are the argument. The debate ends before it starts, and the warmongers win by default.

It’s convenient for warmongers.

The Quiet Part, Out Loud

One honest commenter mourned a “wasted opportunity.” America “could have used Ukraine as a proxy to cripple Russia and isolate China in economic decline, while we prospered.”

That was the real aim of America’s policy, but the editorial board would never print it.

Ukraine was never about Ukraine. It was a cheap way to bleed Russia with someone else’s sons. Nearly five years and over $150 billion dollars later, Russia isn’t crippled, the front hasn’t moved, and the plan has failed.

Turning this stupid war into an open-ended Western proxy campaign wasn’t statesmanship, and wanting it to stop isn’t appeasement.

Ukrainian men are dying while the demands for more bloodshed rain down from the peanut gallery. Continuing the conflict only protects the people who sold the war. Because if the war was a mistake - I’m looking at you, Joke Biden and Boorish Johnson - then somebody had to make it. But if ending the war is treason, well… then, we can’t have that, can we?

Yalta, Munich, and Other Things That Aren’t Happening

The commenters reached for Munich. The board reached for Yalta. Both are lazy analogies. 

Yalta was the winners dividing the spoils after the war was decided. Munich was a strong man carving up a weak neighbor.

Let’s check the scoreboard:

• Vlad is still grinding it out in Ukraine.
• The Donald is bogged down in Iran, a Vietnam of his own making.
• Emperor Pooh Bear is watching two tired men and calculating his next move.

This is closer to Vienna in 1815, when Europe's victorious but exhausted powers discovered that winning a war and constructing a durable peace were two different things.

The Congress of Vienna gave Europe 40 years without a general war. Of course, the men who signed it were called cowards.

There’s a legitimate argument against negotiating over Ukraine's head, but calling diplomacy treason isn’t it.

Useful Idiots, Then and Now

In 1987, Ronald Reagan signed the INF Treaty with Gorbachev. Howard Phillips, a conservative activist from Reagan’s own side, called him “a useful idiot for Soviet propaganda.”

Four years later, you couldn’t find the Soviet Union on the world map.

Apparently, the only true patriot is the man who wants the war to go on, watching safely from his couch, with other people’s children doing the fighting. I, myself, have never understood the attraction to ordering poor Appalachian kids to die abroad, serving the fictitious “national interest.”

John Jay retired to his farm in Bedford, New York, and died there in 1829 with the frontier settled and the ports full. Nobody remembers the colonial era’s graffiti artist.

Wrap Up

Here’s what you do when one of your virtue-signaling in-laws announces at Thanksgiving that wanting peace in Ukraine is repeating Kremlin propaganda.

First, ask them what the war was for. Make them say “proxy.” Enjoy the facial contortions their cognitive dissonance creates.

Second, ask them what three more years buys in square miles. They won’t have a number, even if they could find Ukraine on a map. Give them an extra serving of pumpkin pie if they know the length of the shared Russia-Ukraine border. (Answer: 1,200 miles.)

Third, ask them to read Article III of the Constitution on their iPhone. They’ll discover, perhaps for the first time, that treason is an overt act, not a feeling.

While they’re there, for your further amusement, ask them to hit the search function and type in “democracy.” That it’s not in the document opens up a fantastic can of… cranberry sauce.

Then pass them a basket and ask how they like “dem apples,” knowing you’re using the same argument the Father of the Country would’ve used.

The hoi polloi called George Washington a traitor, too. History ridicules them.

My dear reader, for reasons still unclear to yours truly, I sent out the wrong Zach article this morning. Of course, it was a peach of a piece, and I was perfectly thrilled to share it with you. 

But my friend and colleague has since shown me that I didn’t scroll all the way down to his intended special article. This one’s far more timely, as Zach shares 3 AI opportunities ahead of tomorrow’s earnings reports. Read and consider, my friend. And I’ll see you tomorrow.

I have the honor to remain, quivering in embarrassment, your humble and obedient servant,

Zach’s Second Opinion

Zach here…

I've been taking flying lessons again.

This time I'm working toward my instrument rating. That's the certification that lets a pilot fly through the clouds, relying on the cockpit instruments instead of what you can see out the window. 

The goal is simple: I want to be able to fly with Angela, even when the clouds are low.

Lately, on training flights over rural Georgia, I keep noticing the same thing. Big construction sites. Acres of cleared land with long, flat buildings going up far from any town.

I'd bet more than a few of them are data centers. Georgia already has 112 data centers up and running, with 22 more under construction and another 98 planned, according to the U.S. Data Center Map.

Building out AI has been big business. It will stay big business for years.

But up there, I've been thinking about something else. From 3,000 feet, you can see the buildout. What you can't see is what all that computing power is starting to do.

And that's exactly where investors are starting to look.

The Market Is Flying on Instruments

For the past few years, the AI trade has been all about the buildout: chips, networking equipment and memory. The companies selling AI's picks and shovels got paid, and so did their shareholders.

Earlier this month, Bespoke Investment Group's basket of AI infrastructure stocks was up 78.6% for the year. Its basket of AI implementation stocks (companies using AI to change how they do business) was up just 1.5%.

That gap tells you where the money has been. It doesn't tell you where the money is going.

This month, the buildout trade has hit turbulence. Last week brought a sharp selloff in AI infrastructure stocks, and semiconductor stocks recently put together their longest losing streak since October 2008.

Here's the thing about markets. They don't wait for the picture to be clear. Stocks move on what investors expect to happen next.

That's a lot like flying on instruments. When you're in the clouds, you can't see the runway. You trust what your instruments tell you about what's ahead, and you act on it before you ever break out into clear sky.

Right now, investors are moving capital in anticipation of AI's next phase: implementation. 

They're looking for companies that will use AI to drive real growth in real industries. And one of the most exciting places where this is happening is medicine.

How AI Is Speeding Up New Medicines

Most diseases are driven by a specific protein in the body. Scientists call it the "target." A drug works by latching onto that protein, like a key fitting into a lock.

Finding the right key has always been the hard part. Traditionally, researchers screened huge libraries of compounds, often for years, hoping something would fit.

AI flips that around. Instead of trying millions of keys, AI can study the shape of the lock and design a key to fit it.

Here's a recent example. Drugmaker GSK let an AI company called Chai Discovery design molecules for a list of disease targets. Chai's AI had no special training on GSK's proteins. GSK then tested the designs in its own lab. 

For every target GSK tested, at least one AI-designed molecule latched on. GSK was impressed enough to turn the trial run into a full partnership.

More than 170 AI-discovered drug candidates are now being tested in human trials, and AI is cutting the time it takes to start a study by 15% to 20%, according to Axis Intelligence.

One standout: Insilico Medicine used AI to take a drug for a serious lung disease from discovery to mid-stage human trials in under 30 months. That process usually takes six to eight years. The drug moved into late-stage trials this year.

One point of clarification: No AI-discovered drug has won full FDA approval yet. But the pipeline is getting faster and fuller.

And the FDA itself is getting on board. The agency rolled out its own AI tool, called Elsa, to all staff last year and launched an upgraded version in May. FDA Commissioner Marty Makary has said one reviewer task that used to take two to three days now takes six minutes. 

The FDA is also cutting back on animal testing requirements, and this year it qualified the first AI-based drug development tool for regulatory use.

It's early, and the FDA's claims about speed haven't been independently proven. But the direction is clear. More shots on goal, and a faster path from the lab to the patient.

Three Healthcare Giants Putting AI to Work

Rather than bet on which small biotech wins the race, I'm watching three large companies that are putting AI to work right now. All three report earnings Wednesday morning, October 21.

Thermo Fisher (TMO): Faster Clinical Trials

Thermo Fisher supplies drug companies at nearly every step, from research to manufacturing. I'm most interested in clinical trials, the longest and most expensive stage of bringing a drug to market.

Last year, Thermo Fisher teamed up with OpenAI to bring AI into PPD, its clinical research business. The goal is to shorten clinical trials and flag drugs that are likely to fail earlier, so drug companies can put their money where it counts.

Thermo Fisher also bought Clario for $8.875 billion. Clario collects and analyzes the data that clinical trials are judged on. According to Thermo Fisher, Clario's technology supported about 70% of new drug approvals in the U.S. and Europe over the past decade.

Analysts expect earnings of about $6.40 per share on $11.93 billion in revenue. I'll be listening for new clinical research business and any real results from the OpenAI work.

Danaher (DHR): The Self-Driving Lab

Danaher makes the equipment scientists use to discover and manufacture drugs. Its Cytiva business supplies much of what's needed to produce biologic drugs at scale.

Earlier this month, Danaher announced it is building an AI-powered "autonomous lab," where robots and AI work together to develop antibodies and other research tools. It's expected to run at scale in early 2027, and Danaher is targeting up to eight times faster discovery. 

A week later, it announced a collaboration with NVIDIA to bring more AI computing power into the lab.

Those are goals, not results yet. But Danaher is clearly serious about this.

Analysts expect earnings of about $1.92 per share on $6.56 billion in revenue. I'll be listening for demand from drug manufacturers and more detail on the autonomous lab.

Abbott (ABT): AI Reaching Patients Directly

Abbott gives us a different angle. It's putting AI directly in patients' hands.

Its FreeStyle Libre is a small sensor that tracks blood sugar around the clock. In January, Abbott added an AI feature called Libre Assist. You snap a photo of your meal, and it predicts how that meal will affect your blood sugar before you take a bite.

Abbott also closed its acquisition of Exact Sciences in March, adding the Cologuard cancer screening test and other cancer diagnostics. Exact is expected to bring in about $3.2 billion in sales this year, and Abbott sees cancer screening and precision cancer diagnostics as a $60 billion market.

Analysts expect earnings of about $1.41 to $1.43 per share on roughly $13 billion in revenue. I'll be watching how much Exact contributes and how fast Libre is growing.

What I'm Doing Next

I don't own any of these three stocks today. But I'm watching them closely.

These are the kinds of established companies I could use in my Income Alliance portfolio, and what management says Wednesday could help shape that decision.

There's a second opportunity here, too. Big drug companies are already paying up for AI. AstraZeneca just agreed to pay AI drug developer insitro up to about $1.5 billion. That's good news for smaller biotech companies built around this technology. 

If Wednesday's reports confirm the trend, we may soon be taking aggressive positions in some of those smaller names in James Altucher's True Alpha.

I'll be listening to all three calls Wednesday morning, and I'll keep you posted on what I hear.

In the meantime, think about how this technology is affecting your life… Has AI shown up in your own health care yet? A doctor's visit, a test, an app on your phone? I’d love to hear about it at feedback@rudeawakening.info.

The next time I'm up in the clouds working on that instrument rating, I'll be thinking about this trade. 

You don't need to see the runway to know where you're headed. You just need to trust your instruments. Right now, mine are pointing toward AI in medicine.

Hi, Zach here…

This week, the Social Security Administration announced that retirement checks will increase by 3.6% in 2027. 

That's the biggest raise since 2023. And for the average retired worker, the monthly check goes from about $2,095 to $2,170 starting in January. That's roughly $75 more each month, or about $900 for the year.

Of course, an extra $75 each month is nice. But if you’re a retiree facing stubbornly high inflation, that $75 might feel more like a hollow gesture than a truly helpful raise.

So this week’s announcement won’t relieve the pressure you've been feeling. And there's an even bigger problem on the horizon that this raise doesn't fix at all.

The Inflation You Actually Feel

The same morning Social Security announced its raise, the government released its latest inflation report. 

According to the Bureau of Labor Statistics, prices rose 3.7% over the past year. So before your first bigger check even arrives, the raise is already behind.

And that 3.7 percent is the flattering number.

Look at what's driving inflation in today’s economy: 

• Energy prices are up 20.4% from a year ago. 
• Gasoline is up 34.2%. 
• Heating oil is up a staggering 74%. 
• Electricity is up 4.4%.

Now, you'll hear the experts on TV talk about "core" inflation, which came in at a much calmer 2.6%. Core inflation strips out food and energy. The reasoning is that those prices are "volatile," so they muddy the picture.

Well, who cares if they're volatile? You still have to pay them!

You still drive to the grocery store, to the doctor, and to see the grandkids. You still have to heat your home this winter. Nobody at the gas pump gives you a discount because the price is volatile.

Food is the same story. Grocery prices have cooled a bit this year. But that's cold comfort when your cart costs roughly 30% more than it did in early 2020. Those higher prices didn't go away. They just stopped climbing as fast.

Here's what really matters for retirees. Your budget probably doesn't look like the "average" household the government measures. 

A bigger share of your money goes to the necessities: housing, utilities, gasoline, groceries, and health care. Fewer of your dollars go to new cars, gadgets, and the other things that have been getting cheaper. (New car prices are up just 0.6% this year. Used cars are actually down.)

Those cheaper categories pull the official average down. But they don't help you much if you're not shopping for a car. So your cost-of-living adjustment pays you back for an inflation rate that's lower than the one you're actually living with.

And Medicare takes its bite, too. The standard Part B premium is projected to rise to $209.50 a month. That’s not much for seniors who spend a large portion of their income on medical costs.

This isn't a one-year problem, either. According to The Senior Citizens League, Social Security benefits have lost about 20% of their buying power since 2010. 

Year after year, the raises have fallen short of what retirees actually spend.

Meanwhile, the Clock Is Ticking

An even bigger issue is looming on the horizon. 

Social Security's own trustees project that the trust fund that pays retirement benefits will run dry in late 2032. That's about six years from now.

When that happens, incoming payroll taxes will only cover about 78% of scheduled benefits. Unless Congress acts, that's an automatic cut of roughly 22%.

A bigger raise this year doesn't fix that. Bigger checks just mean the money goes out the door faster.

I expect Congress will patch this up eventually. They usually do, at the last minute. But do you really want your retirement to depend on what Washington decides in 2032? I sure don't.

Build Your Own Raise With a Barbell

You can't control the COLA, and you can't control Congress. But you can control your own investment portfolio. My favorite way to do that is with a barbell strategy.

Picture a barbell. Heavy weight on one end, lighter weight on the other, and nothing in the mushy middle.

The heavy end: reliable income (70% to 90%)

I recommend keeping most of your money in a strategy that produces reliable income. 

Think of it as your own paycheck, and you're the one in charge of it. If you don't need the income right now, reinvest it. That's how your income stream compounds into a bigger one over time.

One of my favorite income strategies is selling cash-secured puts. Here's how it works in plain English. 

You find a quality stock you'd be happy to own, and you agree to buy it at a lower price than where it trades today. Another investor pays you cash up front for that promise.

Say a stock you like trades at $50. You agree to buy 100 shares at $45 any time over the next six weeks, and you're paid $1 per share, or $100, today. You set aside $4,500 in cash in case you need to buy.

If the stock stays above $45, you keep the $100 and can do it again. If it drops below $45, you buy a stock you wanted anyway at a discount, and you still keep the $100. (This is a simplified example, not a recommendation.)

Done patiently and consistently, a strategy like this can help grow your income faster than inflation. 

But it takes discipline: Stick to quality companies. Only sell puts on stocks you'd truly be happy to own. And don't chase the fattest payments, because those usually come with the most risk.

The light end: swing for the fences (10% to 30%)

The rest of your money can go into a much more aggressive strategy. This is where you go after trades with big upside.

Not every trade will work, and that's okay. That's exactly why this end of the barbell is small. A loss here won't sink your retirement.

But here's the key move. When you book a big win, take some of the profits off the table and move them into your income basket. Every win permanently raises the income you collect month after month. That's how the two ends of the barbell work together.

You Don't Have to Do This Alone

Here's the good news. Paradigm has experts on both ends of this barbell. Our trading services are built to target big gains. And seasoned income investors know how to generate reliable income month in and month out. 

Social Security just gave you a $75 raise. Let's work on giving you a real one.

Yes, he fought the Sheriff of Nottingham and the Prince Regent.

But he didn’t “rob the rich and give to the poor.” That’s 20th-century revisionist nonsense.

Robin robbed the tax parasites who enriched themselves by stealing from the serfs. (That’s how the serfs became poor.) And Robin rightfully returned the money to those serfs.

Kind of like your annual tax refund, delivered by arrow.

Of course, Robin’s actions were illegal, but entirely moral. Legality asks only one question: “Will the State punish me for what I’ve done?” Morality, too, asks only one question: “Is this right or wrong?”

Morality sets life’s bar much higher. After all, slavery was legal. But it’s never moral. Stealing isn’t moral - we must pardon Jean Valjean, of course - but the State steals your hard-earned income every two weeks via income tax withholding.

The State is never the arbiter of right and wrong. And when the gap between what is right and what is legal metastasizes into a yawning chasm, the people who can vote with their feet start moving.

This is what prompted individuals to leave everything they knew in Europe and sail to the New World. They wanted to start over somewhere without an overbearing “authority” holding them back.

Don’t Dream. It’s Over.

Today, I’m calling it.

One of America’s founding principles, individual liberty at the expense of the State, is dead. Rest in Peace, Libertarianism, because the State won.

And you know what killed it?

Homeowners Associations.

That’s right, HOAs all across the country sprayed Roundup on the seeds of American libertarianism.

The history of individual liberty predates the United States. We codified it in the Declaration of Independence’s second paragraph:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

It doesn’t say anything about making the State happy. It doesn’t say anything about the State’s right to kill people, interfere in markets, or take property at its whim.

In fact, it states the opposite.

And yet, in America today, we see the Federal Government’s grubby tentacles wrapping around the country, squeezing the life out of it and putting its wants ahead of the people it governs.

The U.S.’s current policies are so far from Libertarian ideals that you can’t see any freedom in them.

Of course, an HOA fine and a federal agent’s bullet aren’t the same thing. But they grow from the same insidious seed: the belief that authority deserves obedience just because it’s authority.

We’ve gotten used to surrendering small freedoms in exchange for convenience. We’ve stopped questioning who’s making the rules and why. We find out too late what happens when we finally refuse.

That’s how the ruinous habit of submission takes root. Once Americans accept that their neighbors can dictate what they do with their own property, it’s a much smaller leap to accepting that The Swamp can dictate what they do with their own lives.

The HOA may not have created the police state, but it taught Americans to tolerate petty tyrants.

Chad and Karen: Murderers

The death of libertarianism began when we agreed that Chad and Karen should form an organization to tell us the regulation height of our grass and the correct shade of beige to paint our homes.

With respect to my friend and Rude editor Sean Ring, “What are we? Europe?”

I grew up listening to music that fought against that kind of conformity. The Clash, The Police, Bob Marley, REM, U2, you name it. The 1980s alternative scene grew out of the anti-government protest movements of the 1960s and 1970s.

The idea of an HOA is enough to raise Marley’s shade in protest.

As far as I can tell, HOAs began in 1916 in Los Angeles. The Los Feliz Improvement Association created and enforced rules about architectural design, landscaping, and property maintenance.

They really caught on after World War II, as suburbs emerged. Today, more than 40 million housing units are subject to Chads and Karens. Nearly two-thirds of new single-family homes are built inside one. According to House Beautiful, HOAs have rules like:

• No edible plants

• Consistent curtain colors

• No trucks or work vehicles

• No tall fences

• No RVs or boats

• No pets over 10 pounds

• No sidewalk chalk

• No clotheslines

• No grass over 3 inches high

• Only white holiday lights

• Guests must check in with the HOA

This is an exhaustive list, and it must be as exhausting as living in France!

Wrap Up

How far we’ve fallen as a country!

Our forefathers jumped on sailing ships to cross an ocean to unyoke the chains of Europe and Great Britain, then the world’s largest empire.

And yet, their descendants willingly climbed into chains of HOAs. The chains are shiny and uniform. Perhaps that’s why they revere them, much to the country’s detriment.

End of rant.

Tesla's new Roadster climbed a ramp, hung upside down using powerful suction fans, then launched itself into the air. Its SpaceX-inspired compressed-gas thrusters helped it rotate and land safely.

The clip was all over X within the hour.

Contrast that achievement with this little ditty.

A mere ten days ago, aggrieved Native American and US Senator Elizabeth Warren sent a letter to federal regulators.

What fresh calamity demanded her attention?

Among other things, McCormick's proposed combination with Unilever's food business. A transaction that could put Hellmann's mayonnaise and Cholula hot sauce on the same shelf.

Shock! Horror!

Warren warned that giant food mergers could reduce competition and raise prices. But the FTC had already granted the McCormick–Unilever transaction early termination of its antitrust waiting period.

As Ricky Gervais once warned his audience: “This is the level.”

On the one hand, we have a world-beating entrepreneur working on thrust-to-weight ratios. On the other, a tax parasite is working on your condiment selection.

The Hover Test

Take any institution. A ministry, a carmaker, a senate committee, a central bank. Whatever.

Ask one question: has anything this outfit has done lately left the ground?

Not announced or studied or funded for further review. Left the ground.

Musk passes the test with an asterisk the size of Texas. He first showed this Roadster in November 2017 and promised production in 2020. Then 2022. Then 2023. Then 2024. Then “2025 to 2026.”

Now he says 2028. That's 11 years after the original unveiling, for those keeping score at home. Electrek counted at least eight moved goalposts.

The original “flying” demo was supposed to drive up a ramp, hang upside down, and somehow render gravity optional.

And that's pretty much what happened.

The Roadster climbed the ramp, hung upside down, and then, with a little help from its SpaceX-inspired thrusters, took flight and performed a barrel roll.

No computer-generated trickery. No AI sleight of hand. Just some spectacular engineering.

And before you tell me, “Well, it only lasted a moment. That doesn’t mean it can fly you to Walmart,” remember Orville and Wilbur’s first flight only lasted 12 seconds.

And speaking of seconds, Tesla claims the Roadster goes from 0 to 60 mph in 0.81 seconds.

Zero point eight one seconds.

Now, Elon is nine years late. Fine. But when he’s late, something eventually lifts off.

When the other side is late, you get a second committee to review the first one.

Wolfsburg Schedules a Meeting

Volkswagen built the Beetle for the common man. It built the Golf, the car half of Europe learned to drive in.

Volkswagen CEO Thomas Schäfer told the Financial Times at this year’s car summit that the electric Golf won’t arrive before 2030. His exact words were that VW doesn’t “need an electric Golf in 2028.”

The real problem is VW’s next-generation vehicle platform, the SSP, which has suffered repeated delays. VW-owned Audi and Porsche get first dibs. The people's car must know its place.

And it gets even better…

VW brought back its famous hippie bus as the electric ID. Cue the Buzz. But Schäfer now admits he revived the people’s van at a price the people can’t pay. A cheaper version is in development. Because of course it is.

Some companies have a product pipeline. Others have a PowerPoint pipeline.

And it ain’t just VW. Look at the poor sods at Porsche.

Imagine unveiling a gorgeous new supercar concept on the very day Elon Musk makes a Tesla fly. Here’s a mere sample of the abuse Porsche is getting after releasing their new Mission S yesterday:

Unless your car can fly, it’s not really going to wow anyone anymore. Talk about moving the goalposts!

Why the Meetings Never End

For a moment, let’s have some sympathy for the downtrodden German CEOs.

Lower Saxony (the German state) controls 20% of Volkswagen’s voting rights, holds blocking power over major corporate decisions, and appoints two members of the supervisory board.

Add Germany’s powerful unions and Volkswagen’s labor representation, and you have a carmaker whose bosses must keep politicians and workers happy ahead of the people who actually buy its cars.

So if you must choose between a faster car and a quieter plant floor, and the plant floor votes on your contract, you’d choose the plant floor every time.

As for Warren, a letter about your condiments costs her nothing. If the deal goes bad, well, she told you so. If it goes fine, nobody will remember. She got her headline about “fighting for families” either way. The senator collects the upside and bears none of the downside.

In other words, she has no skin in the game.

Musk is the opposite case. His name is on the car, and his money is in the company. When the Roadster slips, he eats a big poopburger, served up happily by the public.

Those are properly structured incentives. People with skin in the game eventually ship, because the pain of not shipping eventually hurts them.

The Credibility Caveat

Let’s not get ahead of ourselves.

Tesla hasn’t delivered a flying car to a paying customer. Production won’t even begin until 2028. It has demonstrated a remote-controlled, yet extraordinary prototype nearly nine years after the original Roadster unveiling. The airborne Rocket version isn’t approved for public roads, and its final price remains unknown.

There’s an enormous gap between a spectacular demonstration and a vehicle you can actually buy.

The fair contrast isn’t “Elon delivers, everyone else fails.”

It’s between ambitious engineering and institutional molasses.

One side is wrong about dates. The other is wrong about what century it’s in.

Wrap Up

For each stock you own, think about what has “left the ground” in the past three years.

A product. A plant. A mine. A drug. Something with a firm date and paying customers.

If the answer is a reorganization, a strategic review, or a letter to a regulator, you own a fancy meeting calendar, and meetings don’t compound your wealth.

Look at businesses that dig, build, refine, and ship, especially energy companies these days. My colleagues Jim Rickards, Dan Amoss, and Adam Sharp have been spot on about those.

I leave you with this thought: the present may belong to clowns who worry about hot sauce. But thankfully, the future belongs to people who make things fly.

Most investors look at the Middle East chaos and ask where oil prices are going. But predicting crude prices is hard enough without guessing which refinery, pipeline, or tanker will get hit next.

The hardest-working man in the newsletter business, Dan Amoss, thinks there's another way to play this mess.

Whether oil goes to $60 or $160, producers still need to drill wells, maintain equipment, replace broken parts, and get their product to market. The more complicated that job becomes, the more valuable the companies that make it possible become.

Last month in Strategic Intelligence, he identified five companies that provide the rigs, machinery, services, and expertise the oil industry can't do without. Some are trading at valuations that suggest Wall Street hasn't quite caught on. Today, Dan shares those ideas with you.

And now, over to Dan. 

Crude and Unusual Profits

It’s Friday rush hour.

Traffic flows smoothly on the six-lane highway until a sudden pileup shuts down two lanes.

Taillights flare, brake pads burn and thousands of vehicles grind to an absolute crawl.

We’ve all been there.

And a similar scenario is playing out across global oil transportation today.

For decades, the energy economy relied on frictionless, high-volume superhighways like the Strait of Hormuz and Russian pipelines routing crude to European refineries.

Today, those freeways are blocked by the equivalent of fiery wrecks.

Threats from Iranian radicals and proxies in the Persian Gulf and Red Sea have driven insurance premiums on oil tankers to prohibitive levels. And repeated drone strikes have knocked Russian refineries offline.

Yet global demand remains virtually unchanged.

Consumers still demand every molecule of oil, so crude must keep moving through expensive detours, including shipping routes around the Cape of Good Hope.

Gridlock at the Wellhead

But bottlenecks are not limited to maritime traffic.

A single automated well cluster funnels immense rivers of crude into the network. Physical strikes on these nodes can instantly disrupt the entire downstream flow.

When critical pipes and facilities are hit, the wellhead cannot simply keep pumping.

Operators must shut in giant wells under emergency conditions. Sudden shut-ins can trigger pressure imbalances, sand blockages and other operational problems.

Remediating a damaged superfield can demand huge expenditures, weeks or months of downtime and urgent cleanouts or even re-drilling.

Keeping global supplies moving requires specialized crews and heavy machinery to repair the damage and drill alternative off-ramps.

That shifts pricing power toward the oilfield equipment and service providers that keep the system running. Here are five of these companies from our Strategic Intelligence portfolio:

Transocean Ltd. (NYSE: RIG): The Fleet

When high-risk offshore waters demand rapid development of secure reserves, Transocean provides the heavy machinery.

But building one of today’s most advanced deepwater drilling ships costs $1 billion; with zero newbuild orders globally, Transocean’s ultra-deepwater fleet is virtually irreplaceable.

At the same time, high-spec drillship utilization is approaching 100%, so Transocean’s pricing power is strengthening.

The upcoming all-stock merger with Valaris will create a combined fleet of 73 rigs with a $10 billion backlog. Critically, Transocean will apply its disciplined pricing strategy to Valaris’s historically underpriced fleet, turning idle capacity into a high-margin cash machine.

Even before the merger, Transocean’s results are starting to impress after a long depression in offshore drilling. In Q2 2026, it achieved average day rates of $455,500 for ultra-deepwater rigs at 97% utilization, generating $212 million in free cash flow.

Patterson-UTI Energy (NASDAQ: PTEN): The Crew

Patterson-UTI is the domestic workhorse of North American land drilling.

By avoiding speculative exploration, Patterson functions as an integrated onshore tollbooth, collecting a profit on every vertical foot drilled and every gallon of fluid pumped downhole.

Patterson’s scale has improved in the 2020s through its merger with NexTier and the acquisition of Ulterra drill bits.

The company is entirely sold out of its premium, top-specification APEX drilling rigs, with no excess capacity across natural gas-fueled field assets. Its completions and fracturing fleet is similarly running at near 100% utilization.

Management recently negotiated and won 10% price increases from major customers, with leading APEX rigs on track to earn $40,000 per day by late 2026.

PTEN shares trade at an attractive valuation on many metrics. The stock could rise to $60 over the next few years based on past drilling booms and the financial maneuvers the company has made in recent years.

NOV Inc. (NYSE: NOV): The Foundry

NOV holds a dominant position in the industry’s critical hardware.

It manufactures the top drives, mud pumps and blowout preventers found on many rigs around the world.

Running these rigs at maximum capacity to remediate damaged fields causes wear and tear, driving a steady stream of high-margin parts replacement revenue to NOV.

NOV is generating close to $9 billion in revenue and $1 billion in free cash flow at the trough of the cycle, yet it still trades near 1x sales.

DNOW Inc. (NYSE: DNOW): The Warehouse

DNOW is the parts supplier keeping the entire field from grinding to a halt.

DNOW functions as the ultimate industrial hardware store for the energy patch, collecting steady margins on every pipe, valve and fitting required to move molecules through complex routes.

As a pure-play distributor, DNOW does not take on speculative geological risk.

Instead, it buys in bulk from manufacturers and resells directly to the field, capturing a highly predictable toll on the volume of physical inventory moving through the supply chain.

SLB (NYSE: SLB): The Navigator

As the global energy map fragments and capital migrates into complex offshore and international basins, operators face geological and technical hurdles.

They must map reservoirs with precision and squeeze every drop of efficiency out of existing wells.

SLB, the king of oilfield services, uses machine learning and data analytics to help operators bypass the global gridlock.

In the second quarter of 2026, revenue rose 3% from the previous quarter to $8.97 billion, driven by a rebound in U.S. shale completions and improving international offshore activity.

For investors who want exposure to the brains behind the global oil network, SLB is a core holding.

Back to that Friday evening gridlock.

Frustrated drivers do not simply decide they no longer need to get to their destinations. They find alternate routes.

Global energy markets work the same way — especially when the usual pathways are blocked.

And when the detours get longer and more expensive to navigate, these five companies provide the equipment, services and expertise to keep the oil moving.

As you probably know, electricity demand is growing worldwide. It’s most visible here in the U.S. Electric power demand was flat for decades, and now it’s exploding. Rising rates are so widespread that they're a major political hot potato for the mid-term elections.

Rising demand and soaring rates brought nuclear power back from dormancy. We spent decades dismantling nuclear power all over the world. Now it’s coming back quickly. 

In the States, the most iconic example is Microsoft and Constellation Energy partnering up to restore one of the nuclear power units at Three Mile Island in Pennsylvania. The federal government supports this project to bring power online sooner rather than later.

These giant nuclear power plants buy their fuel through long-term contracts. The contracts do two things: secure the uranium itself and its conversion to fuel. According to the Nuclear Newswire, the price of contracted uranium in 2025 was around $55 per pound. Spot contracts accounted for about 13% of the uranium delivered in 2025. Those spot contracts came with a much higher price of around $76 per pound. 

The gap between the long-term price and the spot price creates a problem. It means that utilities aren’t signing enough new material contracts today. They want to use every bit of their existing contracts and delay signing new ones. 

That’s because the contract price is nearly half the current spot price. And that apparent lack of demand is driving down the prices of both the commodity and the miners:

The blue line is the Sprott Funds Uranium Miners ETF (NYSE: URNM). It holds major uranium names like Cameco Corp. (CCJ), NexGen Energy (NXE), Kazatomprom (KAP), among others. It also holds 15% of its fund in the Sprott Physical Uranium Trust (TSX: U/UN). So, major uranium miners are down more than URNM because the physical uranium price isn’t falling as fast.

None of this makes much sense in the long term. The opportunity is simple…nuclear demand is going up, not down. Today's contracts pay miners a fraction of the current spot price. And they expire between now and 2030.

In the U.S., about 98% of the nuclear fuel is under contract today. By 2030 (only three-and-a-bit years from now), only 60% of demand is covered. In Europe, contracted supply falls from 100% in 2030 to just 36% in 2034.

Here’s what we know right now…existing contracts pay uranium miners about $58 per pound. The spot price is closer to $98 per pound. That means the next round of contracts will push uranium prices higher. 

That means uranium miners could see prices rise by as much as 70% over the next couple of years. And I don’t expect that to happen gradually. The contracts need to be closed in the next few years.

I also don’t expect the contracted uranium price to be at current spot prices. But there is a very good chance that it will be 50% higher. And when you do that to a miner’s revenue, its earnings explode.

Take giant uranium producer Cameco (NYSE: CCJ), for example. In 2026, the company plans to produce at least 19.5 million pounds at $63.00 per pound. Every extra dollar of uranium price should add $19.5 million to the bottom line. In 2025, the company earned $590 million. Here’s what that math looks like for Cameco’s earnings:

• A one-dollar increase adds 3% to the company’s earnings. 
• An extra $10 per pound bumps that to 33%. 
• A 50% increase adds $30 per pound…and doubles the company’s earnings. 

That will happen across the board. Not tomorrow. Not next week. But probably within the next 12 to 18 months. 

And the market is selling off uranium miners today. That’s an outstanding opportunity to get in on a market that should explode higher in the next couple of years. You can buy Cameco, the ExxonMobil of uranium. Or you can buy a basket like the Sprott Funds Uranium Miners ETF or the Global X Uranium Miners ETF (NYSE: URA). 

Any way you play it, you should have uranium exposure now. Because the minute you take your eye off this sector, it will rocket higher.

On Saturday, he told Ukraine to fire its president.

“I think it’s time for Ukraine to get a new president,” he told reporters on the South Lawn. Then he left for a campaign rally in Clarksville, Tennessee.

I’d love to say I’m shocked. I’m not.

I wrote the ending to this story way back in November 2022. I even gave it a cast of characters.

Good morning from a foggy Piedmont, where the truffle hunters are out in the hills, and I’m out with my old archives.

Let’s get into it.

What Happened

On Friday, Trump confirmed a deal with Moscow. The USG will suspend restrictions on Russian diesel exports until April 7, 2027. Millions of tons of Russian fuel will flow into American and global markets.

Why would The Donald do that? Because the ill-conceived fight with Iran has squeezed world fuel supplies. Squeezed truckers are howling about diesel prices. And the midterms are only 3 weeks away.

Of course, Zelenskyy objected. He warned that the deal will hand Russia fresh cash for weapons.

But the silly little dictator also kept sending drones into Russian refineries. Trump had warned him off. “You can do whatever you want to Russia, don’t hit the refineries,” the President recalled telling Kyiv.

So on Saturday, Trump lost patience. He said Zelenskyy “could have made many deals and for some reason, he never does.” One that comes to mind is his terrible penchant for taking advice from disgraced former UK Prime Minister Boris Johnson. The Donald suggested Ukrainians find “a new leader who can make a deal.”

The American president eased sanctions on Russia to cut his voters’ fuel bills. Then he told Ukraine’s president to step aside for complaining.

This is the divorce I’ve been waiting years for.

The Receipts

I went back through the Rude archives for 2021 and 2022. This is a summary of what I wrote.

August 2021. Kabul had just fallen, and America left some friends on the tarmac. I wrote that if I were Europe, I’d start building a working relationship with Russia. America had just shown the world how it treats a cause it’s bored of.

September 2021. Five months before the war started, I had written, “The West must reconcile with Russia.” Against all common foreign policy sense, DC had pushed Moscow into Beijing’s arms. Back then, it was a fringe view. Today it’s an official talking point.

February 2022. Days after the tanks rolled, I wrote about the now-famous Budapest Memorandum. In 1994, Ukraine surrendered its nuclear weapons in return for American and British “assurances.” Ukraine didn’t get guarantees. A guarantee means troops. An assurance and $5.00 doesn’t even get you a latte at Starbucks.

March 2022. Two weeks into the war, I urged DC and Brussels to “find a way to save face and cut a deal.” I also wrote, “Ultimately, this sanction plan will fail because they always do.” On Friday, DC suspended the diesel sanctions to fix its own fuel bill.

May 2022. I wrote that the West was already at war with Russia and was letting Ukrainians do the bleeding. I also told you who was paying. A government funds a war through taxes or the printing press. Americans wouldn’t vote for the tax, so they would pay through inflation instead. That inflation has hit the diesel pump, and Americans have noticed.

November 2022. This was the big one. The headline read “The EU Awakens and the Coming Betrayal of Ukraine.” I wrote, “I think it’ll be a staggering betrayal of Ukraine.”

The next day, I told you a story about a schoolyard.

A Bully picks on a Nerd. A big, friendly Jock steps in, flattens the Bully, and takes the Nerd out for a milkshake.

Then the Jock moves to another city next summer, and the Bully goes right back to work.

Ukraine was the Nerd. Russia was the Bully. America was the Jock.

I wrote, “America will leave, sooner or later, just like it did in Afghanistan.” I said The Swamp would someday run the numbers and find that a war that served the hawks didn’t serve America.

On Saturday, the Jock loaded the moving van.

The Pump-Price Veto

No leader serves “the nation.” The “national interest” is a lovely fiction people need to believe for the system to work. In reality, every leader serves the coalition that keeps him in power. If they lose that coalition, they lose their job.

Zelenskyy’s coalition lives in Kyiv.

Trump’s coalition lives in towns like Clarksville. Its truckers, farmers, ranchers, and commuters matter to him. Those people buy diesel by the tank, not the barrel.

And none of them vote in Ukraine.

When a foreign war starts costing that coalition money every week, the coalition casts its veto. It doesn’t need a Congressional vote. It just needs an election on the calendar.

Every faraway war carries a Pump-Price Veto. The only question is when that veto gets cast.

For Ukraine, it was cast on Saturday.

Any president facing midterms and soaring diesel prices would reach for the same lever. Trump just says the quiet part aloud, on camera.

Where I Got It Wrong

I don’t get a perfect score.

I thought Europe would crack first. Never in a million years would I have understood just how deep Europe’s vassalage runs without this dreadful war.

In late 2022, I expected most of Europe to seek a deal with Moscow within a year. Germany’s chancellor even blinked that December, musing aloud about a return to the old “peace order.”

But Europe held. It’s broke, but its leaders don’t care. They care only about staying in power until the bitter end. It’s the only way they’ll avoid the unsavory consequences of their treacherous actions. You know, like the guillotine.

It was the Jock who cracked.

What to Watch

What happens on April 7th, when the diesel waiver expires? If DC extends it, then the Russian sanctions regime will have ended.

Then watch the EU’s next move. The Brussels vassals poured their industry, energy, and weapons stocks into this war and its alliance with America. If DC walks, Europe must carry Kyiv alone or cut its own deal. It’ll likely be a deal, depending on how bad the economic situation is by then.

Finally, every other security “assurance” is under the microscope, especially NATO’s. Taiwan, the Baltics, and the Gulf states all just watched how America treats an ally that got too expensive.

Wrap Up

None of this takes away from the Ukrainians’ courage. They fought harder than anyone in DC expected.

But the people who sent them into this fight never had the staying power to finish it. And those of us who said so in 2022 got called Putin’s puppets for our trouble.

The geography never changed. Russia and Ukraine still share a 1,200-mile border. DC still sits 5,000 miles away.

“The Bully” only had to bide his time.

And I swear, I wasn’t going to write one. (Trump buying Russian oil is a bigger story I’ll delve into tomorrow.)

But last week, I finished reading a book that blew my mind… and I’ve just got to tell you about it.

That book is Raymond Ibrahim’s Sword and Scimitar, and I can’t recommend it enough. It chronicles the 8 decisive battles between Christendom and the Islamic world.

I had long known that the conquest of North Africa, Spain, Portugal, and the Balkans was a blood-drenched invasion of an amazing world. And there’s much to talk about on that front.

But I’m going to skip that for today and talk about an episode Ibrahim brings up that I certainly wasn’t taught in school and didn't know anything about.

A Business Plan For a Holy War

Columbus wrote that Spain’s Queen Isabella and King Ferdinand laughed and said they liked his idea, an idea my history teachers never told me.

How’s this for a shock: Columbus’s idea was that every penny of profit from his voyage would go to… the conquest of Jerusalem.

In his book, Ibrahim writes that many Europeans believed that if they could reach the peoples east of Islam (in Asia), “together they could crush Islam between them.” Quoting another historian, he calls the voyage an effort to launch “a final and definite Crusade against Islam by way of the Indies.”

Surely that would’ve been history’s greatest squeeze play.

The Squeeze Play

Constantinople (present-day Istanbul) fell to the Ottoman Turks in 1453. Ferdinand and Isabella took Granada (in Andalusia) 39 years later.

Columbus was there when it happened. He opened his log of the first voyage with the scene. On January 2, 1492, he watched the royal banners rise over the Alhambra. The last Muslim king in Spain came out to kiss the monarchs’ hands.

Then Columbus turned to his mission. He called the monarchs “enemies to the sect of Mahoma and to all idolatries and heresies.” He wrote of a prince in the East called the “Gran Can,” meaning “King of Kings.” This ruler and his forefathers had asked Rome many times to send teachers of the faith. Rome never did.

So the Crown sent Columbus, with letters for the Great Khan.

The squeeze play behind that mission was centuries old. Europe had long dreamed of a Christian king beyond Islam, the fabled Prester John, who would march west and strike Islam from behind.

In 1289, Argun, the Mongol ruler of Persia, wrote to the King of France. He offered to take Jerusalem together.

Portugal ran the same play down the coast of Africa. Prince Henry the Navigator’s chronicler wrote that Henry sent ships to learn whether Christian princes in those parts would aid him against the enemies of the faith.

Columbus sought the same ally by sailing the other way.

A Caveat…

Ibrahim writes that the monarchs sent Columbus to see how the people of the Indies “can help in the war effort.” Those words are his summary. Columbus’s log says he was sent to see the princes, their cities, and their lands, and how they might be converted to the faith.

The conversion had to come first. An ally might come later. It’s a technicality, but an important one.

And Columbus’s view of China was outdated. The Mongol khans had lost it in 1368, 124 years before he sailed. Marco Polo’s China no longer existed.

The Use of Proceeds

On Christmas Day, 1492, the Santa Maria ran aground off Hispaniola. The next day, Columbus wrote in his log that he hoped the men he’d leave behind would find enough gold that the Crown could prepare to take the Holy Sepulchre within 3 years.

Then he reminded his backers of his pledge. “I protest to your Highnesses that all the profits of this my enterprise may be spent in the conquest of Jerusalem.” That’s when they laughed and said it pleased them. They added that they’d wanted it anyway.

In March 1493, Columbus reached Lisbon on the way home. He wrote to the monarchs again. A copy of that letter turned up in the 1980s, and Ibrahim cites it, too. Columbus offered to raise an army “for the war and conquest of Jerusalem.” He said that within 7 years, he could pay for 5,000 cavalry and 50,000 infantry.

He never let it go. In 1503, sick, broke, and shipwrecked on Jamaica, Columbus wrote that Christian hands would rebuild Jerusalem and Mount Zion.

So did Columbus write to Ferdinand and Isabella about a war on Islam? Yes, more than once.

But Columbus didn’t ask the Khan to raise an army. Columbus offered to fund one from the West, with Indies gold. The squeeze play was the dream, but the money was the plan.

But the Gold Went Elsewhere…

Columbus thought his use-of-proceeds pledge would bind the people who held the money.

Ferdinand laughed and said yes. But a king doesn’t spend on a sailor’s dream. A king spends on the people who keep him on the throne. Ferdinand had nobles to reward, wars in Italy to win, and North African coasts to guard. A crusade 2,000 miles away didn’t pay any of those bills.

So in 1501, Ferdinand did the practical thing. He sent the scholar Peter Martyr d'Anghiera to Cairo to bargain with the Sultan to protect pilgrims and the holy sites. In return, the Spanish would help protect the Egyptian Mamluks against the threat of the Ottoman Turks. Ferdinand had chosen diplomacy over a crusade.

Meanwhile, the New World’s gold and silver poured into Seville. Those nearest the spigot, the Crown and its bankers, got the wealth first. Everyone else got the higher prices that followed. That’s the venerable Cantillon effect in action again: new money enriches whoever grabs it first.

Eventually, some of that silver did fight the Ottomans. It helped pay for the fleet that won at Lepanto in 1571. But most of it went to Spain’s wars in Europe and to the Genoese bankers who lent against it. Columbus’s hometown got its cut after all.

Still sure he’d reached Asia, still waiting for his crusade, Columbus died in 1506.

Wrap Up

Ibrahim was right about the squeeze play.

It was Europe’s oldest strategic dream. He’s right that Columbus wrote to his monarchs about a war for Jerusalem. He leans a little far in making the Indies a war ally. The log speaks of converts. With Columbus’s own math, gold would pay for the crusade.

The gold went where gold always goes. A founder can promise anything about where the money will go. The one who holds the capital decides. It was true in Seville in 1493, and it’s true in The Swamp today.

Still, if they taught this story about Columbus, rather than the boring old Nina, Pinta, and Santa Maria stuff, many more students would be interested in their history classes.

Have a lovely day!

His captain told him to stay put. But Miguel de Cervantes, who would one day write Don Quixote, refused. By his own account, he said he’d rather die for God and his king than hide from the fight. So he took a skiff and 12 men and sailed into battle.

By nightfall, 2 bullets were buried in his chest. A third bullet forever cost him the use of his left hand.

But, by God, he had just fought in the greatest sea battle of his age and would live to tell the tale. Luckily for us, his side - or I should say, our side - won that battle.

The people who came out ahead after the Battle of Lepanto, fought 455 years and 2 days ago, weren’t the admirals or the emperors. They were a future author and a family of gunsmiths from a valley near Brescia. Last week, that family’s company turned 500.

The Biggest Win in a Century

In 1570, the Ottoman Turks invaded Cyprus and besieged Famagusta, Venice’s richest colony. Pope Pius V answered by creating the Holy League. Spain, Venice, the Papal States, Genoa, the Knights of Malta, and a few others signed on.

Don John of Austria, the half-brother of Spain’s King Philip II, took command of the fleet. He was 24, the same age as Cervantes. Venice sent Sebastiano Venier, a tough-as-leather patrician in his seventies. The Ottoman fleet sailed under Ali Pasha.

They met in battle just off the coast of Lepanto (called Nafpaktos in Greece), near where the Gulf of Patras meets the Gulf of Corinth. More than 400 galleys crashed together in battle.

Venice brought a secret weapon: 6 galleasses. These floating gun platforms tore holes in the Turkish line before the boarding started. After that, it was hand-to-hand fighting, from deck to deck, through impenetrable smoke.

When the Muslim sailors saw Ali Pasha’s severed head lofted upon a spike on his own flagship, they knew the battle was lost. The Ottomans lowered their sacred standard for the first time in history.

As many as 30,000 Ottoman sailors and soldiers died with him. About 12,000 Christian galley slaves walked free.

Rome rang its bells, with Pius V crediting the Rosary. The Church still keeps October 7 as the feast of Our Lady of the Rosary.

The Ottoman navy had looked unbeatable, but all you need is one loss to dispel a myth.

Then the Bill Came Due

Unfortunately, the League didn’t retake Cyprus, and it didn’t sail on Constantinople. It argued. Spain wanted to strike North Africa. Venice wanted Cyprus back. Pius V died in May 1572, and the glue holding the alliance died with him.

Meanwhile, the Turks got back to work. By some counts, Istanbul’s shipyards had launched about 150 new galleys by the spring of 1573.

Grand Vizier Sokollu Mehmed Pasha spelled it out for Venice’s envoy. As the story goes, he said Venice had only shaved the Sultan’s beard. But by taking Cyprus, the Turks had cut off Venice’s arm.

As it turns out, Venice signed a separate peace in March 1573. It gave up Cyprus and paid the Sultan 300,000 ducats for his trouble.

Why did the “winners” pay the “losers”?

Venice was a merchant republic. Its ruling families lived on trade with the East. Every month of war meant empty warehouses. They did what they had to do.

Spain wasn’t in great shape either. Even its South American silver mines couldn’t save its fiscal situation. Philip II defaulted on his debts in 1575, for the third time in his reign.

To be fair, even though the Ottomans rebuilt their ships, they lost so much at Lepanto that their navy was never the same again.

So who came out ahead?

Winner #1: The Gunmaker

On October 3, 1526, the Venice Arsenal paid 296 ducats to a master barrel maker from Gardone Val Trompia named Bartolomeo Beretta. He delivered 185 arquebus barrels (for the long guns). The record of that payment still sits in the State Archives of Venice.

Gardone was Venetian land back then. Beretta tradition holds that the family’s barrels armed the Venetian fleet at Lepanto 45 years later. No receipt proves it. But the Republic bought its barrels from Gardone, and the Berettas made them.

Napoleon ended the Republic of Venice in 1797. Thankfully, the Ottoman Empire is also gone. Philip II’s Spain went broke again and again.

And yet, Beretta is still in Gardone. The family still runs it, now in its 15th and 16th generations. This month, it marks 500 years in business.

How? By planning in generations, instead of quarters. Today’s CEOs should take note.

Economists call this low time preference. You value tomorrow more than today, so you build instead of splurge. The Berettas have done this since the 16th century.

The Lindy Effect is defined as “the longer something has lasted, the longer it’s likely to last.” This 500-year-old business has outlived everything that tried to kill it. Long may it continue… and it probably will.

Winner #2: The One-Handed Writer

Cervantes didn’t get rich from Lepanto. In fact, it was only the start of his troubles.

In 1575, Barbary pirates seized his ship on the way home to Spain. He spent 5 years as a slave in Algiers and tried to escape 4 times. In 1580, the Trinitarians, a Catholic order that ransomed captives, paid 500 gold escudos and brought him home.

Later, the Crown made him a tax collector. In 1597, he left the king’s tax money with a banker. The banker went bust, and Cervantes paid for it by going to jail in Seville.

History has a sense of humor.

In the prologue to Don Quixote, Cervantes hints that the book was born in a prison. Tradition says it was that one. What many call the first modern novel came out in 1605.

Once, a man mocked the aged Cervantes as old and maimed. Cervantes replied:

What I cannot help resenting is that he calls me old and one-handed, as if it had been in my power to stop time from passing over me, or as if my maiming had been born in some tavern brawl, and not in the highest occasion the past and present ages have seen, or future ones hope to see.

History’s greatest writers aren’t born, but made from events that steel their characters.

Wrap Up

Every age has its Lepantos: a victory, happy headlines, and celebrations in the streets. But out of the public eye, the scorecard tells a different tale.

Sure, the admirals got the paintings and the Sultan got Cyprus.

But the real returns went to the ones who played the long game. One was a family that built something its descendants still run. The other was a broken soldier who turned his worst years into one of literature's greatest works.

This week, the Church marked the feast of Our Lady of the Rosary, as it has for more than 4 centuries.

But now, Venice is a tourist-infested open-air museum and the sultans have been consigned to history’s dustbin.

And yet, Beretta still forges barrels in the same valley, and Don Quixote is still in print.

Now that’s legacy.