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Schrödinger’s Strait.

When you can’t see it, it’s both open and closed at the same time.

Is it open? Is it closed? You may as well flip a coin, as the answer depends on who you ask.

On Friday President Trump said that “Iran has agreed to never close the Strait of Hormuz again”.

Well, they either forgot or didn’t actually say it, because after one day Iran announced it was closing the Strait.

Understandably, Iran doesn’t trust Trump.

So negotiations will take time.

The problem is, time is on Iran’s side. Iran has already taken heavy hits and inflation is running high.

But the threat to the global economy hurts everyone.

The longer the Strait stays closed, then energy prices will continue to have pressure on the up.

Jet fuel shortage effects may come further into play within weeks.

There are really only two options here:

With the S&P 500 hitting record highs, it seems as if the market is expecting a deal to be done with the conflict de-escalating.

I am not so convinced that escalation is fully off the table.

So whilst this rally is great for markets, I believe investors should be cautious.

It would be great if this was the end of the conflict.

But I wouldn’t be betting heavily on it.

Supreme is a controversial company.

Mainly became it was heavily dominant on vaping revenue.

People often decide that this is a dealbreaker for them, but are quite happy to buy alcohol companies, or gambling companies.

The beauty of investing is that everyone has the right to invest their money however they please.

I don’t like gambling. I believe it ruins lives, but I’m all for people having the choice.

That might sound crazy at first.

But think about it…

What happens if you ban gambling?

Do gamblers suddenly stop gambling?

Of course not.

Gamblers will always find a way to gamble and lose their money.

So they’ll go overseas, in unregulated markets where the odds are even worse, and where the UK sees zero in tax revenue.

I might not agree with gambling or like Bet365, but Denise Coates is one of the UK’s biggest taxpayers, and Bet365 is a huge employer in its local community.

Better to get some benefits of gambling and have some regulation, rather no taxation and the Wild West.

In any case, it’s the same with vaping. We either regulate them or people buy knockoff fake vapes from overseas filled with goodness knows what (probably nothing good though, that’s for sure).

But the reality is Supreme is no longer just a vaping company.

In fact, 42% of group revenues last year were generated ex-vaping, with that number set to rise above 50% this year due to recent acquisitions.

Here’s a list of the brands Supreme licenses, owns, and distributes.

And here’s a list of its customers.

Supreme is on the way to becoming a well-diversified business, and currently trades on a PE of less than 8.

This is despite the stock beating its expectations.

I think at 150p the stock is cheap and offers a great entry.

Supreme is unlikely to ever command a lofty valuation, but the facts are changing, and market sentiment is not.

There are some roadblocks ahead with the vaping tax next year.

But management is proactively dealing with this through strategic acquisitions and diversifying revenues away from vaping, and has also shown to be shrewd in dealing with the change from disposables.

The company generates healthy free cash flow, and I think future success is likely (but never guaranteed).

I’ll be launching my The Private Investor in the next few weeks.

This is my six-week live cohort where I walk you through building a proper investment portfolio from scratch.

You can register your interest here: https://shiftingshares.co.uk/tpi-waitlist