Ideas on profiting from war

Discussion in 'The Okie Corral' started by JohnF, Jan 22, 2010.

  1. JohnF

    JohnF

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    I'm asking the GT crowd for serious methods of profiting from the various wars and other man made calamities around the world.

    There was an article of the stock returns on defense and other related stocks before and during WW2 that sparked an interest.

    I see that Halliburton did well during the last decade (better than gold), but that seems to have peaked.

    Any ideas?
     
  2. Isaiah1412

    Isaiah1412

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    I think its a bit late now, there was a lot of money to be made back in 2001-2003 but the ship has sailed for now.

    Defense and energy did very well under Bush. Not sure who will make out best under Obama, if anyone. :dunno:
     

  3. JohnF

    JohnF

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    I don't want to limit it to just US.
     
  4. Billy10mm

    Billy10mm

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    Picking these things is extremely tough unless you have an inside source. When Hilliburton or any other defense contractor gets awarded a contract, one of enough size to affect their stock price (assuming they're publicly traded in the first place), regular shmoes like you and me don't get the news fast enough to act on it before the stock adjusts the to the news. We can at that point, take a guess as to whether the market price adjusted correctly or not and act on that guess, but being wrong lands you in the red.

    A safer bet is watch government spending. When the gov starts printing money to pay for the war (or bank bailouts for instance), expect big inflation and put your cash into gold. When the war ends and the government reels back in the cash, we see negative inflation and its time to turn the gold back into cash.

    One of the things you can do it watch a particular industry, like automobiles or aircraft, and watch out for the smaller supporting companies to those industries. There are many small and mid-cap companies out there who do things like make seats for planes that get a noticeable boost in revenue when a large order for airplanes is made to Boeing or Airbus. Plenty of smaller companies that support the big 3 in Detroit making airbags, transmissions, electronics.

    When big news hits about an automaker, the first stock to adjust is the main stock (GM, Ford, Boeing, etc) ... but it usually isn't until the quarterly report that the smaller stocks that feed off these major companies gets adjusted.
     
  5. Billy10mm

    Billy10mm

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    Furthermore, I always recommend that people stick with what they know. Are you a reloader? Do you know the names of the major players in making rifle rounds for instance? Find out who the government's main supplier of military ball is and try to find out who supplies them with powder/cases/primers/lead/copper ... maybe one of those companies is publicly traded.

    Things like that.
     
  6. moeman

    moeman

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    The modern play book was written in Iraq:

    1. Get your boys in office
    2. they get us into war
    3. you get no bid, cost plus, contracts
    4. run the cost thru the roof and you get to make more and more
    5. when taxpayers cry foul, your media attack dogs paint them as unpatriotic for questioning the judgement of your boys in office
    6. when the ground swell is too great to hold back lawsuits for waste and corruption, move headquarters overseas for immunity
    7. clean up via pardons from exiting President