All eyes last night were on the U.S. presidential debate, the first of three before Election Day.
Donald Trump and Hillary Clinton faced off for 90 minutes – and some of it was entertaining… a bit of it even enlightening.
But to me, if felt like a big waste of time…
Sure, the two candidates covered international trade, terrorism, crime, “birtherism,” immigration, and – of course – Clinton’s email server.
But when it came to the economy – the engine driving the United States – all I saw or heard was a big black hole of nothing.
Sure, Trump hearkened back the 1970s – or maybe even the 1950s – and called for the return of a robust manufacturing economy (not going to happen). And I’m sure Clinton whispered something about “green jobs”… but I fell asleep there.
Where was the talk about technology – Silicon Valley’s role in the economy, the threat of artificial intelligence, online privacy and surveillance?
Besides some grandpa and grandma-just-got-a-computer-level paranoia about cybersecurity, we got nothing.
While I’m not one for endorsements – my job here is to show you how to profit on the markets, the news, the major trends – there was a candidate I wish was on the stage last night.
She could have led the conversation in a much more interesting direction…
A rogue nation and its cartoonish, unpredictable leader fire two ballistic missiles towards its rival neighbor, a vital U.S. ally. Then the nation claims to have detonated its most powerful atomic bomb ever, which it says will fit nicely on a warhead fitted to those ballistic missiles.
A strongman in charge of a world power decides to invade a sovereign country to “reunite” half its territory with the mother country – twice… and both times during the Olympic Games.
As we all know, these events weren’t lifted from the plot of a spy novel.
They’re happening in the world today. Border wars, frozen conflicts, and saber rattling in the South China Sea, Ukraine, the Russian Caucasus, the Korean Peninsula, Syria, Iraq, Yemen, and Saudi Arabia don’t show any signs of letting up.
A global economy lurching toward recession, bad planning, and poor leadership across the globe don’t help international tensions, either.
But this is precisely the kind of environment lucrative defense stocks thrive in.
In fact, nervous nations with deep pockets are propelling the entire defense sector into a “supercycle” that could be good for steady gains for the next 20 years.
And it doesn’t matter who wins in November, either…
The F-35B stealth fighter from Lockheed Martin Corp. wowed the crowd in its British debut. The ultra-sleek aircraft not only hovered but also turned 360 degrees.
Then there was 737 MAX from Boeing Co. (NYSE: BA). The huge passenger jet, showing off for the first time for an international audience, accomplished an incredible near-vertical takeoff before leveling off and plunging… all on purpose.
Then there were the always hotly watched “backroom deals” – in which Airbus Group SE racked up orders and commitments for 279 planes worth $35 billion, while Boeing brought in orders and commitments for 182 airplanes worth $26.8 billion.
I’m talking about the Farnborough International Airshow, which took place about a week ago near the southern coast of England.
It’s a signature industry meeting in which commercial aerospace and defense firms pile up big sales.
But those stories above are about “old aviation.”
As amazing as some of those aeronautical feats and big-number deals were, the real story at Farnborough involved a fleet of 90 highly advanced tiny fliers.
They truly knocked my socks off, because they point right to the future of a $55 billion industry.
Today I’ll show you how to play this red-hot trend for big tech profits now – and in the long term…
Last week, I recommended picking up shares of Northrop Grumman Corp. (NYSE: NOC) on the dual trend of increasing global tensions and rising defense budgets.
Those shares have already run up 23.5% in the past 12 months. That would be an impressive feat for a small cap, but Grumman is one of the five biggest defense and aerospace firms on the planet.
These kinds of gains prove our thesis about investing to follow Rule No. 3 and “Ride the unstoppable trends.”
Grumman has good company on its ride into the stratosphere. And there is so much money pouring into the defense sector right now – more than $1.75 trillion by 2020 – that it makes sound investment sense to open up our exposure to it a bit and capture even more of the gains this growth sector is offering.
Army Chief of Staff Gen. Mark Milley has been saying the U.S. Army is in a state of “high risk” when it comes to its capability of fighting one or more large conflicts or defending the country.
And Gen. Milley finally went on record with his message in Defense News earlier this month.
Now, he wasn’t saying our military isn’t up to the job – far from it. Rather, he meant that this critical capability is a tall order considering the threats we face right now and into the future.
North Korea, for instance, has announced its development of a miniaturized nuclear warhead. It already has a ballistic missile capable of flight to the U.S. west coast.
Saudi Arabia is fighting a two-front war. Iraq, Syria and Libya are failed states and fertile ground for terror groups like al-Qaidaand the Islamic State. The European Union and Turkey are reeling from homegrown ISIS-sponsored terror and the worst refugee crisis since.
Meanwhile, the National Association of State Chief Information Officers just released a report saying that we likely couldn’t stop a cyberattack that happened simultaneously with a natural disaster, like a Category 5 hurricane, with our current cybersecurity capability.
Clearly, the world is not a safe place right now. And governments here and around the world have their work cut out for them when it comes to providing a defense that can match and defeat the threats.
And they’ll need assistance from the tech and defense companies that have, over the decades, designed and built the innovative and effective weapons systems that have helped win wars around the globe… like the one I want to share with you today.
It’s where our government is turning to help them do all that – and more…
Last week’s 51st Bi-annual Paris Air Show was the event of the year for the Aerospace industry.
Held in Le Bourget Airport in Paris, France, this prestigious air show has brought together industry leaders from across the globe to hunt for new commercial opportunities – and over 2115 exhibitors marketing their latest and greatest projects – for the last century.
As the largest, and longest-running, aerospace trade show in the world, the Paris Air Show features companies from over 44 different countries, 285 official delegations, 3,100 international journalists and nearly 139,000 professionals’ year-over-year.
But you don’t have to be perusing the Parisian halls of Le Bourget to be a part of the action.
For investors, like us, the Paris Air Show is a tipping point for the entire aviation industry. Investors look at this week-long battle royale as a make-it-or-break-it moment to see who will be the leaders in this highly competitive industry and who is likely to come up short.
I’ve been telling you for two years now that we are in the midst of the largest aviation boom in history. An industry that analysts believe could soon topple $5.6 trillion in the next few years.
No doubt, that’s a big number. But it greatly understates the potential that tech investors can find in aviation-related plays.
About a dozen years ago, I found myself having a stimulating conversation one sunny day in San Francisco with the great economist Milton Friedman.
It’s a conversation I’ll always remember.
I studied economics in college – in fact, I’m the recipient of an honors degree in that subject – and the tireless free-market advocate was and remains one of my big heroes.
We were standing on the balcony of his spacious Nob Hill condo taking in the sweeping Bay views and talking about economics and Washington politics – as I eyed the huge portrait of him standing in a corner that Friedman’s wife hated and wouldn’t let him hang. Then he looked me in the eyes and said, “You know, Michael, I’d like to see the Federal Reserve replaced by a computer.”
As the 1976 Nobel Prize in Economic Sciences laureate explained it, he felt the Fed had become too obsessed with micromanaging the nation’s economy. Remember, this was a dozen years ago, before the Fed started quantitative easing and heavily manipulating interest rates.
Of course, I’m not suggesting we replace the Fed chair with a robot.
But I always recall Freidman’s thought experiment whenever the markets get choppy, as they have in the past few weeks. And when I see the markets become volatile because of the Fed and the news, I know it’s time for defense.
I’ve before shared with you my five “Choppy Market Tools.” But today, I want to share with you a classic investment strategy that I’ve given a brand-new nickname to reflect our focus on the “New West” of Silicon Valley tech stocks.
I call it the “Cowboy Split.”
And today I’m going to show you that when employed properly the Cowboy Split will protect you from volatile markets.
We all know what a lousy winter this has been. So if you’ve been doing any traveling, I’m hoping you haven’t been victimized by one of the 75,000 commercial flights that the nation’s airline industry has scrubbed since Dec. 1.
That’s the industry’s worst showing in 25 years, says The Associated Press.
As a frequent flier myself (I rack up some serious travel miles jetting from one CEO meeting to another, and then onto one of my media appearances on CNBC or Fox Business), I feel real empathy for those of you who’ve been stranded in a cold, uncomfortable airport terminal.
But when I saw these statistics, I knew there was a bigger story at play here – a story with the kind of financial heft that spells profits for investors who are savvy enough to zero in. Because this story has yet to hit Wall Street’s radar screen, you have the chance to score major outsized profits.