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Always Bet On Defense



February 05, 2009 – Comments (5) | RELATED TICKERS: NOC , RTN , KBR

I get comments quite often that I focus too much on politics and economics, and that this forum is not appropriate for most of my concerns. I take that criticism to heart. So today I'm going to sprinkle in a little investment advice in a stream of consciousness set of random thoughts. Discussion is always welcome.

I like to bet on Defense. It wins football games. It wins basketball games too. In 1996-97, the Chicago Bulls went 72-10, setting the NBA record. Michael Jordan's scoring was a big part of that, but did you know that was one of the defensive teams of all time?

Sometimes I think about politics as standing next to the river. Some people, usually big government supporters and moderate-collectivists, are swimming with the current. Others, limited government types and Constitutionalists (like Kucinich, Paul, and a handful of others) swim against the current. But the current continues to sweep them all towards the river's end. I prefer to stand next to the river, watch the folly unfold, and occasionally note the absurdity of it all. Most importantly though, I keep my distance from it because I can see what is at the end of that river.

That's my defensive strategy and it brings me to some stock advice for today. I like Defense Contractors. I like them a lot. Don't get me wrong here. They aren't the most efficient businesses, though some are better than others. They are mostly merchants of death, but then again, so are most politicians. They certainly don't live up to my Libertarian ethics of Non Aggression. But this play is for defense. I wouild rejoice if I could see a reason for hope, that our absurd world would let others leave in peace, and that we could fundamentally question the premise that our neighbors must be controlled in order to provide stability. That won't happen anytime soon. After all, 99% of Americans voted for war this election. 46% for one war. 53% for any war but that war. 1% voted for peace. That makes me defensive.

Defense Contractors took a beat down with the overall stock market. Some believe they took an extra beatdown on the hope that Obama would withdraw troops from Iraq. Little did those people know that Obama wanted to increase military spending and shuffle troops off to different locations. We will have a surge in Afghanistan, more action in Pakistan, and further troop surges on the Horn of Africa. Rest assured shareholders, Defense Contractor revenues will stay strong.

What does this mean for the rest of us? It's not good. Set aside your rahrahrah ramblings of support for your party and vitriol for their party. 

Defense Contractors and Para-Military Security Services, it has been reported, are building detention facilities in the United States. That's more money for me, yay!  In the meantime, is the stage being set for totalitarian distopia? If so, the 99% will have themselves to blame. As I said, I am playing defense, watching from a safe distance. Does that make me culpable? Maybe. Then again, I was one of the 1% that voted for peace, and donated for peace movements.

Another random thought: what would Republican voters be saying right now if this was McCain's first month in office? He would, of course, be doing exactly the same thing as Obama right now, i.e. trying to cram another bailout down our throats. Would they sound just like Democrat supporters? As a man who tries to observe things from the river's edge (probably why others refer to my thoughts as too abstract), I think they would.

Support for the stimulus is high. What amount of money is too much? What amount of nationalization is too much? Where does the money come from? Where does collectivism draw the line? Your wealth is no longer your own, of course. It hasn't been for any American since 1913. Where are my privacy limits? What is the right size for the government sector? How militarized does the police need to be? What the heck is a homegrown terrorist?

Considering all these thoughts is a bit of an exercise in futility perhaps. After all, I'm going to get my way no matter what. No one can stop me. I stand on the river's edge. It's all about playing defense, right MJ?

David in Qatar

5 Comments – Post Your Own

#1) On February 05, 2009 at 7:35 PM, DemonDoug (31.51) wrote:

bet on defense except in the beginning of a democratic administration.  less bombs being dropped = less bombs being bought = less business.

good call on everything else.

and MJ was one of the best defensive players in the game in his prime.  very disruptive, lots of steals, good rebounder too.

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#2) On February 05, 2009 at 9:52 PM, Varchild2008 (84.37) wrote:

Careful with what defense contractors you go with.

Textron's getting people killed like no tomorrow.

Boeiing is a big fat QUESTION MARK until their dreamliner is finished and ready for shipping.  They do have an excellent UAV program now though.

Contractors that assist soldiers through training or other services are going to be excellent.

I am currently eying "EAG" American Defense Systems right now.  However, I hate that stock's run-up.  It is a 13.11 P/E at 80 cents a share.  I won't buy in till it falls to 70 cents a share.

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#3) On February 06, 2009 at 1:07 AM, Option1307 (30.63) wrote:

Great post David, I for one appreciate your stance on things.

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#4) On February 06, 2009 at 1:50 AM, DaretothREdux (50.63) wrote:

So...don't bet on World Peace? How about peace in the middle east?

How about the U.S. leaves the 130 countries they occupy and quit starting wars of agression?

I can't have my way, but I can still argue and fight for it.

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#5) On February 06, 2009 at 4:45 PM, RonChapmanJr (30.09) wrote:

good post and you definitely get a rec for talking about the greatest basketball team and player of all time.  :)



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