[SpearReport]

Recent developments in Georgia represent the geopolitical awakening of the Russian bear. Along with continued military action in Afghanistan and elsewhere, the defense sector should not be affected by a recession. These themes will be with us for a good long while and will have a synchronous effect over the next decade. Specifically, they will directly impact our large defense contractors in a positive manner. Thus, we are already seeing a technical breakout in Lockheed Martin (LMT) and we expect General Dynamics (GD) to follow shortly. Both are being added to the A-List.

We think defense will be a good place to invest/hide over the next few years as it is a non-cyclical business that is substantially separate from the consumer sector. We don’t think defense contracts will be cut back substantially even if the government has to enter the mortgage business and pay out hundreds of billions to support Fannie and Freddie.

Excerpts from Spear’s Securities Industry Analyst (SSIA).

Disclaimers:
SSIA and Spear Report recommendations are impersonal and not tailored to the investment needs of any specific individual and may not be suitable for your portfolio. Consult a financial professional before investing. There is substantial risk in all stock market investments including the risk of loss of all capital. Check all information carefully before making an investment. Past performance is not indicative of future return.

[lemon8]

I'd say so. My China holdings (FXI) gave back all their 200% gain. But General Dynamics (GD) only off about 30%.

[leonel80]

It is a very interesting and risky move. Defense stocks had their momentum at the beginning of the war and this decade. They will move down as the conflicts in Iraq goes down. But nobody knows if their is going to be another war or not with Iran.