Verification

Data Loading Summary

Data Items Successfully Loaded 13

Failed Items 0

Monte Carlo Simulations 10,000 per scenario (5 scenarios)

Historical Events Analyzed 10

Data Sources

Source	Data Type	Coverage	Freshness
FMP API (financialmodelingprep.com)	Historical Prices, Profiles, Quotes, Key Metrics TTM, Price Change, Financial Growth	All events from 1990 onward, 19 portfolio positions, 15 opportunity stocks	Real-time
undervalued.ai stock analysis database	Proprietary fundamental/technical ratings, price ranges, thesis	2,300+ stocks with proprietary fundamental/technical ratings	Updated per analysis cycle
Regime Detection Engine	Market regime classification	SPY + VIX data	Real-time
Hardcoded Research Data	1973, 1979 events	S&P, oil, gold returns	Historical (verified against Federal Reserve data)
Monte Carlo Engine	Simulated paths	10,000 x 5 scenarios x 252 days	Generated at load time

Historical Data Limitations

Pre-1993: SPY ETF did not exist. S&P 500 index (^GSPC) used where available. For 1973 and 1979 events, data is hardcoded from Federal Reserve Economic Data (FRED) and academic sources (Blanchard & Gali, 2007; Hamilton, 1983).

Pre-2006: USO (oil ETF) did not exist. XOM used as oil proxy for 1990-2006 events. XOM correlation with oil: ~0.70, so returns are directionally accurate but attenuated vs pure oil exposure.

Pre-1993: VIX (CBOE Volatility Index) was introduced in 1993. No VIX data for 1973 and 1979 events.

Sector ETFs: XLC (Communication Services) started 2018. XLRE (Real Estate) started 2015. Earlier events have incomplete sector coverage.

Survivorship Bias: Companies analyzed today may not have existed during earlier events. RTX was United Technologies until 2020. Many defense stocks have been through mergers.

FMP Endpoints: This version enriches all 19 portfolio positions and 15 opportunity stocks with FMP endpoints: key_metrics_ttm (PE fallback, market cap fallback), price_change (1M/3M/6M momentum), and financial_growth (revenue/earnings growth rates). Stock ratings and price ranges are sourced from undervalued.ai proprietary analysis database.

Monte Carlo Assumptions

Parameter	Value	Source
Normal Daily Volatility	0.607%	Empirical from regime detection rules (validated against 7 historical events)
Crisis Vol Multiplier (Limited Strike)	1.5x	2017 Syria strikes: VIX barely moved, vol stayed normal. 1.5x is conservative.
Crisis Vol Multiplier (Full Escalation)	2.5x	2022 Ukraine: VIX peaked at 36.5 from ~20 baseline (1.8x). 2.5x accounts for Hormuz.
Crisis Vol Multiplier (Prolonged Conflict)	3.0x	1990 Gulf War + 2008 GFC peak VIX: ~80 (4x normal). 3.0x for sustained conflict.
Base Annual Return	10%	Long-run S&P 500 annualized return (Dimson, Marsh & Staunton, 2020).
Mean Reversion Drift	abs(shock_mean) / (2 * recovery_days) per day	Recover half the initial shock linearly over the recovery period. Conservative estimate.
Random Seed	42	Fixed for reproducibility.

Scenario Probability Calibration

Scenario probabilities are estimates based on historical base rates and current intelligence:

Diplomatic Resolution (35%): Most Iran-US confrontations since 1979 have been resolved without full-scale war. The JCPOA process (2015-2018) showed both sides prefer negotiation when possible.
Limited Strike (25%): The 2017 Syria strike and 2020 Soleimani precedents show the US prefers targeted strikes with limited escalation. Israel's history of surgical strikes (Osirak 1981, Syria 2007) supports this.
Escalation (20%): Iran has demonstrated willingness to retaliate (2020 missile strikes on Al-Asad base after Soleimani). A more aggressive strike could trigger broader retaliation.
Full Escalation (10%): Hormuz closure is Iran's most powerful asymmetric option but would also devastate its own economy. Low but non-zero.
Prolonged Conflict (10%): Full-scale regional war involving multiple proxy groups (Hezbollah, Houthis, Iraqi militias). Similar to 2022 Ukraine scenario but in the oil heartland.

Confidence Levels

Finding	Confidence	Basis
Markets recover within 6 months (ex. embargo)	HIGH	8 of 10 historical events confirm
Energy/Defense outperform in week 1	HIGH	Consistent across all post-1990 events
TSM is the highest-risk portfolio stock	HIGH	Taiwan supply chain + geopolitical beta analysis
BABA negatively exposed via China oil dependency	HIGH	China imports 70% of oil from Middle East. Higher oil raises costs for Chinese economy. BABA has 6.9% portfolio weight.
Scenario probabilities are accurate	MEDIUM	Based on historical base rates. Actual probabilities are unknowable.
Monte Carlo terminal distributions	MEDIUM	GBM with mean reversion is a simplification. Fat tails not fully captured.
Modern sector extrapolation (AI/SaaS)	MEDIUM	No direct precedent. Extrapolated from XLK behavior during earlier events.

Data Loading Log

Regime: normal, VIX: 19.86
Event '1990 Gulf War': 7 tickers loaded
Event '2003 Iraq War': 17 tickers loaded
Event '2011 Libya Intervention': 23 tickers loaded
Event '2017 Syria Strikes': 24 tickers loaded
Event '2018 Iran JCPOA Exit': 25 tickers loaded
Event '2019 Aramco Attack': 25 tickers loaded
Event '2020 Soleimani': 25 tickers loaded
Event '2022 Russia-Ukraine': 25 tickers loaded
Event '1979 Iranian Revolution': hardcoded data
Event '1973 Oil Embargo': hardcoded data
UV ratings: 24 stocks
DB opportunities: 100 stocks discovered

Verification & Audit Trail

Data Loading Summary

Data Sources

Historical Data Limitations

Monte Carlo Assumptions

Scenario Probability Calibration

Confidence Levels

Data Loading Log