How to Avoid Being Collateral During the Next Cyberattack

0 | By Michael A. Robinson

Just a couple of hours ago, I received a call from one of my team members at Money Map Press – and it left me a bit confused.

He described to me a big corporation suffering from a massive DDoS attack (distributed denial-of-service), and then he went on and on about how some “white hat” hacker was called in to solve the problem.

Naturally, I figured he was talking about the major DDoS attack that – at that very moment – was taking down a lot of prominent U.S. websites, including Amazon, Twitter, Shopify, Spotify, and Github.

But he was just getting some of the important details wrong.

hand-keyboardWhy was he describing a single corporation being cyber-attacked instead of dozens of websites? And how did he know so much about a particular individual being called in to handle it, right down to the guy’s name (Elliott)?

Worse than that, he tried to tell me about how Elliott himself was also a target of this cyberattack…

I was getting concerned. Was my colleague suffering from some sort of paranoiac delusion?

That wasn’t the case – thankfully.

Today I’ll reveal to you what my colleague was talking about – and how it connects to today’s huge DDoS attack.

And then I’ll show you how this story “converges” with an ETF I tipped you off to a few weeks ago.

It may sound like some sort of conspiracy theory – but it’s really a huge profit opportunity…

What Mr. Robot Gets Right

Many of you have probably already solved this puzzle – especially if you watch USA Network on Wednesday nights.

My buddy was talking about how he and his wife had just started watching the TV drama Mr. Robot on DVD.

And because the show’s plot matched up so perfectly with the morning’s news, I got a bit confused.

Now, I’ve watched the first season of Mr. Robot already – and plan to catch up on the second season soon. And I’m impressed with how much it gets right about hacking (though not so much the tech business world).

mr-robot-tvFor those who haven’t seen it yet, here’s a quick rundown…

By day, Elliot Alderson is a computer engineer/programmer – a “white hat” hacker – who safeguards the clients of his cybersecurity firm employer, Allsafe.

By night, however, Elliot’s a bit different. He’s a socially maladjusted morphine addict who hacks “bad guys” – like child-porn rings and cheating spouses – in order to get them arrested or just exposed.

That’s the backstory. The plot is driven by Allsafe client E-Corp getting struck by that DDoS attack and Elliot getting called in. After that, a mysterious group of Coney Island-based hackers – the fsociety – enters.

From there, the plot gets pretty murky – but like I said, what I really like about Mr. Robot is what it gets right about the world of hacking.

It’s mostly correct about the technical details of hacking (DDoS attacks are pretty esoteric hard to explain – but the show does it well). It gets the jargon hackers use right. And it gets hackers’ motivations right: Sure, most hackers do what they do to cause trouble or steal, but plenty of others use it as a coping mechanism… or as a form of “justice.” It’s justice I agree with, but a lot of these guys do have moral codes they stick to – and I have to give them that.

But most impressively, the creators of the show have proven themselves to be prescient about how the world of hacking intersects with the real world.

After all, they anticipated this morning’s massive DDoS attack.

And all the major retail and bank cyber thefts we’ve seen, along with the election-related hacks we’re seeing right now, give Mr. Robot’s producers plenty of material to work with.

Juniper Research recently estimated that the global cost of data breaches – hacks – will reach $2.1 trillion by 2019. That’s nearly four times the estimated cost of cybercrime in 2015.

And Cybersecurity Ventures Worldwide recently predicted that cybersecurity spending, from 2017 to 2021, will top $1 trillion.

That reality is why we’ve moved into cybersecurity investing here at Strategic Tech Investor.

So let’s review our “play” on cybersecurity…

(Cyber)security for Your Portfolio

PureFunds ISE Cyber Security ETF (NYSE Arca: HACK) is that it’s a “pure play” in the sector.

Built to track the ISE Cyber Security Index, with HACK you can take advantage of the “arming” of businesses, governments, and individuals.

The index is made up of all the big players and many of up-and-comers in the cybersecurity sector. That means you get a play on federal, state and local governments beefing up their security – and on the huge array of business cybersecurity solutions… all in one spot.

This fund’s holdings are like a “Who’s Who” of cybersecurity…

  1. Symantec Corp. (Nasdaq: SYMC) is one of the oldest and largest firms in the market and is a major player in the U.S. government’s cybersecurity platforms – and, at a “weight” of 5.41%, it is the largest of HACK’s holdings. It also owns the Norton brand security programs that are popular with individuals, as well as enterprise solutions for both mobile and computer security.The stock is up nearly 33% in the past six months, largely because investors and Wall Street are starting to understand the long-term growth explosion in this sector. And I expect at least another 25% out of the stock just in the short term.
  2. Palo Alto Networks Inc. (Nasdaq: PANW), which composes 4.22% of HACK’s holdings, is one of the newest players to become a familiar name in any IT department and one of my favorite single plays in the sector. It operates in three divisions: Next-Gen Firewall, Advanced Endpoint Protection and Threat Intelligence Cloud.It has clients in every sector, both public and private, but has had a tough time recently acquiring new clients because of the slack economy. But this is our advantage. The stock is off 14.6% year to date, but the overall trend is up – it’s up 19% over the past three months and 183% since its mid-2012 IPO – which makes now a great time to get in.
  3. Qualys Inc. (Nasdaq: QLYS), which makes up 4.21% of the ETF, is a cybersecurity player in the fast-growing cloud sector. This is where computing now resides and where the IoE will either sink or swim. Given the enormous corporate interests involved in IoE, it will be extremely important for every link in the cybersecurity chain be as strong as the next, and Qualys is building a reputation for just that. Qualys stock is up 50% in the past six months, so there is real momentum here. It released its second-quarter earnings in early August, and even then, things were looking up. Revenue was up 20% for the quarter, as was gross profit. It also raised its guidance for the rest of 2016, always a bullish sign given the broad economy.
  4. Simply put, anywhere in the federal government where secure records are a top priority, ManTech International Corp. (Nasdaq: MANT) is on the job. It keeps a low profile, though, because it operates on highly sensitive projects for the U.S. intelligence community. ManTech, which makes up 1.52% of HACK, also provides secure networks for the intelligence community so that communications between outposts and command can be relayed without threat of hacking.

That’s why it’s not surprising the stock is up 29.6% year to date. The federal government is finally committing to beefing up its cybersecurity – and it needs a reliable integrated solution. ManTech is the kind of specialist organization that can work with the government at the highest levels. And even now, the company is paying a solid 2% dividend – income you get by owning HACK.

HACK is down about 4% over the past month, making this a very nice entry point.

This is an ETF that’s going to double and triple as cybersecurity keeps becoming an even bigger issue.

And you don’t have to be able to keep up with the ins and outs of Mr. Robot’s plot to make that kind of money. You just have to make this one “Buy.”

Remember to watch your inbox one week from today – Oct. 28 – for my free exclusive Triple-Digit Tech Profits in the Singularity Era special report.

It’s just for Strategic Tech Investor members.

Don’t miss it.

Follow me on Facebook and Twitter.

Leave a Reply

Your email address will not be published. Required fields are marked *