The most difficult issue right now is how to quantify the negatives. If Russian leader Vladimir Putin continues to prosecute the invasion of Ukraine, it’s possible to see the stock market as a whole continue its decline. But there will be a premium on stocks that have nothing to do with the conflict and a super-premium on the beneficiaries — oil and gas and defense.

First, let’s consider what we own that has quantifiable exposure and expected to be hit (and they have been hit). First is Ford Motors (F). Electric Vehicles use a lot of nickel, and guess where electric vehicle makers get their nickel from: Russia. That's why you see the stock of Ford Motors have negated all of the gains that it made after they announced the division of their business (supposedly positive news).

A second casualty is Boeing (BA). For starters, we don’t know the full impact of airspace bans issued by the Federal Aviation Administration. Second: There’s uncertainty following Boeing’s decision to stop buying the titanium it uses to build jets and military aircraft, as reported Monday by the Wall Street Journal. That’s despite CEO David Calhoun making it clear to us that the worries about titanium are unfounded given the stockpile that Boeing has created since 2014.  

The next level of contagion has to do with the banks and credit linkage to Europe. We uniquely have two banks with little to no exposure. In 2011, Morgan Stanley (MS) was perceived as hostage to Europe. CEO James Gorman has trimmed that exposure to almost zero. Count us as buyers on scale, meaning when the stock trades at a markedly lower level from our last buy at $89. Wells Fargo (WFC) has no exposure — again, good news for us.

Finally, there is the amorphous high-multiple tech which is linked to inflation, in the system, and is regarded as a force that erodes value. 

The rest of our portfolio presents great opportunities because it isn’t exposed to the Russia-Ukraine crisis. Some of these stocks may be impacted by the general depression people feel regarding travel and leisure, the economic outlook, or to the stock market itself, but their operations are not connected to what’s happening overseas. 

One group of stocks that could potentially outperform during this period (in addition to the oil and energy) is the healthcare group. If we do enter a recession due to high oil prices, healthcare stocks should outperform because of their secular trend and insensitivity to economic cycles. We endorse buying Eli Lilly (LLY), Pfizer (PFE) and Danaher (DHR) here. Note we didn't endorse buying Ford (F) or Boeing (BA) above, because we're uncertain how low they can go. 

Our view is that the market will get more substantially oversold. We think $4000 on the S&P500 is in the cards.