We Didn’t Start the Fire, Part 2: Now the Bombs Are Real (and So Are Our Dividends)

2026-03-05 03:29:46

Last month, we hit the contrarian karaoke bar together. No judgment. It was a good time!

If you’ve got a (ahem, no judgment) fuzzy memory, well, here’s how it went down. We sang some Billy Joel—good start, I know.

A little We Didn’t Start the Fire. We honored his point that the chaos never stops. That was the case in 1989 when the banger topped the Billboard charts. It remains true today.

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Ha, we even belted a 2026 verse over our (virtual) beers!

Venezuela, Davos snow, Iran missiles here we go

Greenland borders, tariff fights, Powell keeping money tight

Wow. About that “Iran missiles here we go” line. Even I didn’t expect the sequel to arrive this fast.

But here we have it. I woke up on Saturday, checked my phone (my unhealthy yet common ritual), and see we’ve got US and Israeli forces decapitating Iranian leadership—Khamenei is dead. Iran flailed back at neighbors in the region. Oil is rallying because the Strait of Hormuz is shut down.

The fire is burnin’. The new verse for our next rockin’ night out together practically writes itself:

Tehran burning, bombs at dawn, Hormuz shipping tankers gone

Oil spiking, gold on fire, Treasuries the world’s desire

Vanilla panics, herd is out, we contrarians grab payouts

Billy said it, now it’s real—we don’t flinch, buy dividend deals!

The Piano Man’s lesson hasn’t changed. It was always burning somewhere since the world’s been turning. The fire never stops. Not our fault! Our job is to get paid while it’s burning.

In February, we discussed the iShares 20+ Year Treasury Bond BuyWrite ETF (TLTW). This fund owns long-term government bonds and sells covered calls against them for additional income, a savvy strategy which elevates a pedestrian 4% paying bond fund into an elite 8.9% dividend payer. It also takes advantage of geopolitical panic and morphs that into a monthly dividend machine.

We are selling panic insurance to the broader herd.

Since then, TLTW has continued paying investors. Readers who followed my Contrarian Outlook recommendation now sit pretty. Subscribers to my Dividend Swing Trader service, who got in even earlier, can now boast 11% on the position including dividends in eight months, an annualized 17%. Not bad for a “boring” bond fund!

Here’s why TLTW loves a crisis. When bombs fall and the world panics, money floods into US Treasuries. Bond prices jump and yields drop. Meanwhile, this fear spike also boosts option premiums, and TLTW is on the other side of that trade. As a seller of these expensive options to nervous traders, the income that TLTW generates actually goes up during times of crisis. Good for TLTW investors.

My only issue with TLTW today is that now the world’s talking about Treasuries. As contrarians, we want to buy ahead of the herd, not with it. So, I rate TLTW a Hold over in our DST portfolio. Of course, we’re happy to collect the dividend checks. We’re just not going to chase TLTW here.

If you missed TLTW, consider the Global X S&P 500 Covered Call ETF (XYLD). It’s a perfect complement to TLTW. The fund does the same thing, but in stocks instead of bonds. XYLD holds a basket of S&P 500 stocks and sells covered call options against the index every month. This generates additional income and provides a much higher yield than from buying the S&P 500 index alone.

And here’s where it gets good with the Iranian situation. When market turbulence spikes—which is exactly what’s happening right now—call options get more expensive. And XYLD, as a seller of these call options, collects more. The result is a 10%+ yield, paid monthly, that is well supported. This is real cash that hits our brokerage accounts twelve times a year, regardless of whether the market trends up, down, or sideways.

XYLD is our bomb shelter dividend. We’re getting 500 of America’s biggest companies and collecting a fat monthly income stream no matter how scary the world gets. In fact, the scarier the world gets, the more premium income the fund generates. Crisis alpha, baby!

The underappreciated secret? These S&P 500 firms are best positioned to benefit from AI in the near term. They’re implementing it across their operations right now—cutting costs, boosting margins, trimming headcount (hot off the presses: Jack Dorsey’s Block, formerly known as Square, announced cuts of 4,000—nearly half its workforce—due to AI!). When these efficiency gains show up in quarterly earnings, the recent hysterical selling will fade and XYLD will benefit even more.

Here’s what I want you to understand: TLTW and XYLD aren’t one-off picks. They’re part of a proven system that works for you.

My Contrarian Income Report portfolio holds 25 positions across bonds, energy toll collectors, covered call funds, BDCs, munis, and utilities—yielding 8.3% on average. When the world catches fire (and it always does, somewhere), this portfolio doesn’t flinch. It keeps paying, month after month!

The fire never stops. Billy Joel told us that in 1989. I reminded you last month. Tehran is reminding you right now.

So, let me ask you: when the next crisis hits (and it will), do you want to be panicking with the herd? Or collecting your monthly dividends with us?

Right now, I’ve got 25 bomb shelter income plays ready for you—including XYLD and every other covered call fund, bond play, and toll collector in the portfolio. I’m talking about real yields of 8%, 10%, even 12%+ landing in your brokerage account every single month.

Click here to get instant access to my full Contrarian Income Report portfolio and start collecting your monthly dividends today.

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