Dear Reader,
Good morning,
We are in the sixth day of this conflict with Iran.
We've heard a lot of concern about whether we are running out of missiles, interceptors.
Here's what's going on:
In late 2025, the Defense Department really started putting pressure on our suppliers - Lockheed Martin, RTX, Boeing, etc. to increase production.
When that happened, I started saying to myself:
One of three things is going to happen…
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Something with Iran…
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We'll double down on supporting Ukraine to put pressure on Russia…
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Something with China.
It's these three hot spots we really have to worry about.
I sat down with a couple of congressmen yesterday and we talked through this.
Thankfully, the same things that keep me up at night, keep them up at night, too.
I have a number of things to share with you this week after those conversations, but today I want to start with the question of more missiles.
Back to these three big companies - Lockheed Martin, RTX, and Boeing…
Lockheed makes Patriot interceptors.
Capacity is rising from 600 a year to 2,000-plus.
In January, Lockheed also announced a plan to quadruple the number of Thaad interceptors to 400 from 96. These are thermal high altitude area defense systems.
These interceptors are very cutting-edge.
So cutting-edge, in fact, that when we moved a Thaad system to South Korea, China protested.
Now, RTX makes SM-3 interceptors, advanced medium range air-to-air missiles.
These are what we have taking down incoming Iranian missiles.
And we're really seeing a race here, to see who runs out of missiles first - is it Iran, or the U.S. and allies.
These interceptors are being fired from a bunch of different areas at incoming Iranian missiles - from navy ships, our bases in the Middle East - the UAE, Kuwait, etc.
Our hope is we don't run out of interceptors before Iran runs out of missiles.
Iran's trying to flood the zone, trying to get us to degrade our defense systems.
We have a healthy inventory of them, I am hearing.
But the speed at which we're running through our most-advanced interceptors is putting pressure on Lockheed and RTX to expand production as quickly as possible.
And Boeing, finally, can make tens of thousands of JDAMs annually - direct attack munitions. And they are being produced now.
Now, a lot of folks have asked me how to play this in the market. If you read our Diary yesterday, you'll remember a stock market usually rises 25% to 35% on the 12 months following a Middle east war, right after it goes down an equivalent amount in the year leading up to the war, basically.
So we're in a unique situation here.
President Trump didn't really spend time preparing the nation for this.
When you think of going to Congress, talking to the American people, putting out morning news shows, etc. to really sell the American people on why this is important, that didn't happen here.
People haven't already been conditioned for this, so the market response is likely to be different.
If this war lasts 30 days or less, boom - the market will do well.
If instead it seems to spiral more out of control in the first 30 days, it could get ugly in a lot of ways.
My bias right now is to the downside.
With the market at highs, and really overvalued, I'd have a risk-off bias.
So, what does that mean?
We talk about this in our book, Midnight in America, along with the four steps to protect yourself.
Step 1 is sell your speculative stocks.
If you have stocks that are speculations - that aren't growing their revenues, get out of those first.
Remember, we have an exact playbook for times like this. It's all laid out for you right here >>>
Step-by-step, exactly how I've made money during bear markets my entire life.
It's how I've made the majority of my personal wealth.
Don't leave your nest egg to chance, download the playbook now >>>.
We don't know how this is going to play out, but I get nervous when I see people come out saying "there's a 60% chance this lasts 30 to 40 days."
What does that even mean? That's someone who likes to talk a lot and say nothing.
60%? It's basically 50/50 it lasts 30 to 40 days or less. Okay? Tell us something we don't know.
Well, I'll tell you something you don't know -
Right now, President Trump keeps going out there saying, "this is gonna be no problem, no problem."
Maybe he's right. Maybe he's wrong.
What I do know is when you walk into war, a lot of unexpected things happen.
So again, my attitude right now is risk-off.
I would be cleaning up the most speculative parts of my portfolio right now - okay?
I'd be taking positions carefully.
Lockheed, RTX, Boeing - we've recommended all of these.
We've been in war-positioning mode for some time.
But of these three, Boeing is the only stock that is really, really cheap.
The company is in turnaround mode and really starting to get their business offense running.
Of these three stocks, Boeing is the best value for the money right now in my view.
I'd be adding to my position or buying if I don't have any Boeing.
Remember, these are giant companies. Missiles are smaller parts of their businesses.
There are smaller defense stocks that move MUCH higher on missile demand, and we cover a lot of those right here>>>.
This is how we found Palantir at $7 and showed readers countless double- and triple-digit gains on defense stocks.
If you are looking for the best defense stock opportunities, I urge you to read our newest defense stock report.
If you want to hold tight and take a risk-off stance, here's the playbook.
It has everything you need to handle a tricky market like this.
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