SPC Premium Dossier: The Cybersecurity Gunslinger
It won't trade at this discount forever ...
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I grew up during the “First Cold War.” So I know that if the New Cold War is a story, there are subplots that will drive it.
Subplots like:
The Return of Old Foes: Russia and China served as the Evil Empire foils to America and its Western Allies in Cold War I. They’re back and (as those TV promos say) “badder than ever.”
Some New Cast Members: A potentially fully nuclear North Korea wasn’t in the OG Cold War – but it figures to be in the sequel. Pyongyang leader Kim Jong Un likes to make splashes around important events and holidays (at my last newsletter, I wrote about his threat to incinerate America while most of us were sitting down for Easter dinner). Take the “over” on him making major noise with nuke and/or missile tests as close to the November presidential election as possible. In the meantime, new “stateless” foes have emerged, too.
Keep-Up-With-The-Joneses Spending: Yeah, I know I said it wasn’t just a money story. But money will help drive the subplots. Take China. While the proposed U.S. defense budget for next year increases only 1%, Beijing has been aggressively growing its military budget. It’s up 7.2% for 2024 – which follows increases of 7.2% in 2023, 7.1% in 2022, 6.8% in 2021, 6.6% in 2020 and 7.5% in 2019, government reports say. (And some experts claim Beijing understates those figures.) Beijing has boosted defense spending for 28 years in a row. And the budget in 2022 was 63% higher than in 2013, says the Stockholm International Peace Research Institute (SIPRI) think tank.And, as the following projection shows, global military spending will continue that march – from its record $2.24 trillion in 2022 to nearly $3.3 trillion by the end of the decade, SIPRI says.
Deglobalization: Decades of pushing to integrate world markets are being reversed – undone – as flintiness escalates. That move back toward “trading blocs” has consequences – and creates opportunities. Here in the United States, we’re seeing “onshoring” of manufacturing, which will be highly bullish for America’s semiconductor industry.
All New Acronyms: The military loves creating acronyms – especially weapons systems. And we’ll have new ones to learn – like AI, DEW (directed energy weapons), HGV (hypersonic glide vehicles), A2/AD (anti-access/aerial/denial), UAV (unmanned aerial vehicle), UUV (unmanned underwater vehicle) and C5ISR (command, control, communications, cyber, intelligence, surveillance and reconnaissance). These are some of the new technologies, and new weapons systems, that will command the battlefields of the future. We’re already watching “The First AI War.” And some of those other new battlefields will be in cyberspace – and outer space.
All-New Battlefields: As we told you late last week, the new battlegrounds include cyberspace … and outer space. And that creates all sorts of new targets: Our adversaries are putting “bullseyes” on satellites, critical infrastructure like electrical grids and water systems, corporate information systems, and such personally sensitive things as your medical records.
New targets demand new defense systems.
And for Wealth Builders like us … that also creates new opportunities – including one I’m going to show you today.