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OUR GENESIS

After the 9/11 tragedy, we knew the security industry would grow dramatically as corporations and governments worldwide focused on security concerns.

We knew that investors would need professional guidance to evaluate companies in this industry, or they would be at the mercy of rumor and public relations specialists.

That's why we founded the first publication devoted exclusively to companies in this niche industry, Spear's Security Industry Analyst

We focus on three areas:

  • Homeland Security,
  • Traditional Defense, and
  • Strategic Resources.

Professionals and sophisticated individual investors who want specialized recommendations in these areas rely on us for the best political and economic analysis in the industry. 

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* Neither the publisher nor the editors of any Spear publication have any financial or personal relationship of any kind with any of the companies or funds we review. Officers and employees of our companies are subject to strict rules and procedures to prevent conflicts of interest with our readers.

Latest Articles

09.14.11
Global Financial Crisis, Act II

The world economy has bifurcated, which creates powerful crosscurrents as each segment deals with different challenges. The debt-ridden, legacy economies of the West need to deleverage, while the capital-rich emerging economies need to manage growth, capital inflows and inflationary forces.

Meanwhile, Act II of the Global Financial Crisis appears to be playing out, albeit in slow motion, with an epicenter in Europe. Fears of a Lehman-like collapse in that region abound, but global economic conditions are much different than in 2008. For example, bellwether commodities like corn, copper and crude oil do not reflect the crisis mentality.

08.29.11
The Running of the Bulls?

August has been a difficult month for the stock market with the major indices down double digits. Investors are pricing in a double dip recession in the U.S. and a commensurate stall in global growth. Despite rather benign economic conditions in China and elsewhere, the concept of decoupling between emerging economies and the developed nations is not yet in play. Because resource stocks are both cyclical and commodity-related, they will have the most volatility during such challenging times.

08.21.11
Crisis+Contrarian = Opportunity

Resource plays in general and the energy sector in particular, are at the epicenter of the dislocation. We have witnessed 20-30% declines in many names over the past week. In some cases, the selling has erased most of our profits, while more recent purchases are underwater. Despite the unusually aggressive selling, we nevertheless take a contrary view and outline a number of reasons not to shrink back from the market in horror, but rather to stay the course and even consider additional buying of resource-related names at bargain prices.

07.26.11
Pas de Deux

For the next decade or two, resource investing is going to be a tale of two themes: the U.S. Dollar and China. The dollar is weakening this week as European diplomats begin to get serious about fixing the euro zone. A weaker dollar is good for the resource investor.

The Chinese economy is back on the market’s radar, however, after HSBC’s Purchasing Managers’ Index (PMI) for July dropped below 50. The reading of 48.9 signals contraction. This was not entirely unexpected, however, as Chinese banks are obviously tapping on the brakes to control inflation and let some air out of the housing bubble.

07.12.11
Commodities = Volatility

As we noted in the last monthly issue, commodity prices are notoriously volatile (and cyclical). The cyclicality is driven by the business cycle, but is exaggerated by the leverage that is generally applied to the futures contracts by speculators. Accordingly, investing in commodity-related stocks requires a tolerance for larger week to week and month to month swings than you might be accustomed to.

06.22.11
Resource Investing Overview
Resource investing is about seeking opportunities along the entire supply chain, from the resource itself to the miners/growers, machinery suppliers, fabricators and distributors. For example, as a direct result of the current commodity boom, manufacturers of construction, mining and oil-producing equipment are enjoying record sales growth and profit margins. Higher agricultural commodities have been a windfall for U.S. farmers and farm equipment manufacturers. Accordingly, a savvy resource investor has the option to allocate capital to the three C’s: commodities themselves, resource-focused companies and/or countries. We will do all three.
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Updates

06.22.11
Stormy Weather
Executive Summary
Investorsare concerned about the fundamental level of economic health in the developed economies, particularly Europe and the U.S. Those concerns are reasonable, considering that these nations carry excessive debt burdens after a decade of financial irresponsibility.
Of much more import to resource investors, however, is the fact that China is slamming on the brakes in order to deflate a real estate bubble and moderate inflation. If China is unsuccessful in managing a soft landing, then the global resource sector will become a dangerous place to invest. We discuss the risks and rewards of this situation in detail below.

 

03.18.11
Crisis in Japan
Japan has a cultural imperative to ‘save face’ that creates a corresponding mendacity discount concerning reports on anything problematic. If the reactor cores at the Fukushima facility melt down, they could ignite and shoot large amounts of radioactive material into the atmosphere. It is a small world and part of it could get very radioactive. If Japan shuts down, the global economy shuts down. Consequently, we are adding two leveraged hedges to protect against the potential downside and we urge extreme caution. Do not buy any falling knives.
01.12.11
China's Resource War
There is an implicit war for global resources underway between China and the rest of the world. The latest campaign revolves around the acquisition and control of rare earth metals, which are needed by both the civilian and military economy. As China is the source of 97% of these 17 elements, a bill has been recently passed in the House of Representatives to re-start rare earth mining in the U.S. We expect the rare earth ‘craze’ to last quite a while.
11.11.10
Global Security Update Issue

Executive Summary
Sometime in 2011 the war in Afghanistan is likely to be suddenly over, but this will not be due to a military-style victory by NATO troops. Rather, meaningful negotiations between the Taliban and the U.S. are expected to start fairly soon. Al Qaeda in the Arabian Peninsula, however, is transforming itself into a cargo bomb operation and we anticipate some fireworks before long. Lastly, wireless, roaming, video-toting home security robots are the new hot thing.

We recommend iRobot (IRBT) as a general robotics play. In addition, uranium miner Cameco (CCJ) looks like it is finally ready to start a major run higher. 

03.31.10
V-shaped recovery. Is that possible?

The current rally means the market is pricing in a normal V-shaped recovery. Is that possible? According to the ECRI, the answer is ‘Yes.’

03.25.10
Sell Notice

In the Short-Term Model we are selling all five positions SRS, FAZ, SSG, SMN, & BGZ
 

03.23.10
Hedge with inverse ETFs

A resumption of recessionary conditions would trigger a retest of the March 2009 lows in the major indices, which is what we want to hedge against with our inverse ETFs

03.02.10
Pick #5 reaches 9%

Pick #5 reaches 9% for the week. Consider selling if you have reached your threshhold.

02.26.10
Pick #5 reaches 5.5%.

Pick #5 reaches 5.5% for the week.

02.25.10
All 5 picks up today

All five of this week's picks are up an average of 2% today.

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