The phone rang. My hand reached, but I dropped it.
On the floor, the screen simply said: “David.” Zero callback number.
It was October 2021.
He was in London.
What happened next changed my view of the markets...
He’s Going In
I picked up the phone. The voice on the other end said: “He’s going in.”
He was talking about Russian President Vladimir Putin invading Ukraine.
“All of the oil traders I talk to have already moved assets out of Russia,” he said.
In fact, my friend had also been forced to quit his job because sanctions were pressing down on his company.
I suspected for months that Putin would invade Ukraine. But I had confirmation two months before the real speculation that took over the markets.
The fact that energy traders started moving capital and assets out of Russia was a damning proposition.
Imagine being a trader in April 2022 after the invasion, and all of your capital and commodities are locked within the borders. You don’t move assets unless something serious lies on the horizon.
My friend was 100% correct in his prediction.
Oil prices have surged and collapsed in the wake of the invasion.
The metals industry is also under pressure after a huge move up in the first half of 2022. The same goes for agricultural inputs and commodities like potash and wheat, respectively.
But there’s one sector that has outperformed them all in the meantime...
War.
There’s Always Money in Bombs
There’s no shortage of people telling the world to give peace a chance.
But we keep putting the same people who prefer war into office.
Secretary of State Anthony Blinken probably can’t find a place on a map that wouldn’t look better in his mind than after a bombing campaign.
He’s supported every single military action of the United States dating back to the Clinton administration.
Today, the U.S. faces military threats on multiple fronts.
The nation provides military support to Ukraine in a proxy war against Russia. It continues to face superiority challenges from China in the Pacific. We have heightened tensions again with North Korea…
We still have a presence in the Middle East that will never go away.
To our south, multiple nations engaged in war games in the Gulf of Venezuela.
These reasons represent a stunning level of investment in global defense.
The U.S. military budget hit $816 billion this year.
I won’t be shocked if it reaches $1 trillion in the next decade.
Regardless of what you think… that money will always flow into the military.
The Top Name in the Defense Sector
If there’s one name I want to own — it’s Lockheed Martin Corp. (NYSE: LMT).
This is a wide-moat company that generates roughly $65 billion a year in revenue. LMT offers a terrific benefit of income and growth as it continues to develop its F-35 fighter jet program, Sikorsky helicopters, space systems, cybersecurity and missile defense.
Lockheed is a cash-flow machine (thanks, U.S. government). In September, it hiked its dividend for the 21st straight year. Over the last eight years, it’s hiked its dividend from $1.50 to $3.00.
Last year, the company increased its backlog by 11%, hitting a staggering $150 billion. To put that figure into perspective, the backlog is more than double its annual revenue.
Lockheed Martin has also done a great job at returning capital to shareholders outside of dividends. In addition to annual dividend hikes, it’s also announced a multi-year stock buyback program worth $14 billion.
I’d love it if the world could find peace and we ended war.
But I’ve lived 42 years on this earth, and there’s one additional constant to “death and taxes.” The world will likely continue to be fragile.
A well-capitalized defense is a critical — and rational — place to invest.
To your wealth,
Garrett Baldwin
*This is for informational and educational purposes only. There is an inherent risk in trading, so trade at your own risk.
Market Momentum is Green
Momentum is green after a choppy day. We saw the S&P 500 bounce off the second standard deviation band while markets continued to look for some support heading into the final hours of trading. Things might be a little less stable next week. But we’re not worried about the short term. Our focus remains heavily on the long-term value and income opportunities created at Tactical Wealth Investor.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
Media-Driven Anomaly Is Prodding These Stocks Higher
How would you feel right now if you were able to have closed a single trade for 70%?
*The profits and performance shown are not typical, and you may lose money. From 2/21/20 to 5/11/23 on live trades the win rate is 66%, the average return of winners and losers is 12.9%. The average winner is 52.8% on the options over a 7 day average hold time, with a total annualized return of 125%.
TradingPub is Now On Telegram!
Want to get a link to my TradingPub articles as soon as they post? I’ve got you covered!
Telegram is an entirely free messaging app and getting access is as easy as 1… 2… 3…
1. Download Telegram on your mobile device (Before you can add Telegram to your desktop computer, you must download the application on your phone and create your account
The material in this document is for informational purposes based on our proprietary research. It is not an offering, specific recommendation, or a solicitation of an offer to buy or sell any securities mentioned or discussed herein.
Any performance results discussed herein represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.
Due to the timing of information presented, any investment performance reflected within this document may be adjusted after the publication and distribution of this material. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, be equal to any corresponding indicated historical performance levels or be suitable for your portfolio.
Any investment results set forth in this document are not net of expenses and execution costs, nor do they account for other relevant trading or investment fees. Please visit thetradingpub.com/terms-of-service/ for our full Terms and Conditions.
