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Last week, 11,189 people signed up to get Tony Sagami’s report on calendar-based investing, now available here.
Many thousands more are reading this series of interviews.
And the questions keep pouring in.
One of the most frequently asked goes like this: “I want to buy a simple ETF, hold it for a reasonable period of time, and watch it go up rapidly. What single sector gives me the best chance of achieving that goal right now?”
I asked Tony that exact question, and his answer is spot-on. The discussion that follows, however, is quite shocking. Here’s the transcript …
Martin Weiss: Let’s not beat around the bush. Using your methodology, if you had to pick just one sector to invest in for the medium term, which one would that be?
Tony Sagami: Defense!
Martin: What’s the profit potential?
Tony: Over the last 12 months, the leading defense ETF is up 29%.
Martin: Are you talking about the iShares ETF?
Tony: Yes, the iShares U.S. Aerospace & Defense ETF (symbol ITA). Plus, in May of this year, a new ETF was introduced that aims to triple those results. I’m talking about the Direxion Daily Aerospace & Defense Bull 3x Shares (DFEN). Even assuming some slippage and extra costs, it would have probably given you a gain of about 80% over the past year. These are the two ETFs that I think give you the most firepower and the most security.
Martin: What about the next 12 months?
Tony: All indications are that the sector could rise at a similar pace.
Martin: Thanks to the Trump agenda?
Tony: Thanks to the Trump agenda to some degree, but mostly because of powerful trends that were already in place long before Trump was elected president. You’ve written about it. So have I. It’s massive. It’s worldwide. And it’s clearly the most-unstoppable megatrend of our time.
Martin: The long march to war.
Tony: Maybe long, maybe not so long. I just attended a conference with Harald Malmgren and George Friedman. Both have impeccable credentials — Malmgren, a senior aide to JFK, LBJ, Nixon and Ford; Friedman, formerly chairman of Stratfor. Both are alarmed by the rapid escalation of tensions. Both are adamant that a new war is imminent.
Martin: Against?
Tony: North Korea.
Martin: In response to their missile tests and nuclear buildup, I presume.
Tony: Not so much in response, but rather in advance. U.S. military strategists are now saying the sooner it happens, the smaller the ultimate price will be.
Martin: That’s just talk, not facts on the ground.
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| Tony Sagami, master of calendar-based investing. |
Tony: Let me give facts on the water. You know, of course, that the U.S. now has two aircraft carriers in the Sea of Japan — the USS Ronald Reagan and the USS Carl Vinson.
But do you know what that really means? For the Navy, it means a major disruption in planning, funding, maintenance costs. And for everyone in the region tracking U.S. operations, including North Korea’s Kim Jong-un, it sends the most powerful signal of battle readiness since World War II.
Martin: It takes more than a buildup of American military power to start a war.
Tony: Very true. It also takes a buildup of American public anger … which, by the way, is precisely the type of thing you’re seeing right now with the headlines about the hostage, Otto Warmbier, who was just shipped home with serious brain damage. Plus, it takes a U.S. president willing to take risks with bold actions … which, by the way, is precisely what we have in the White House right now.
Martin: Bring this back to investors.
Tony: OK. First of all, though, let me make one thing absolutely clear: It’s highly unlikely to be a nuclear war. Instead, expect a major conventional war. In that context, if you think defense stocks are strong now, just imagine the rush to buy them in a major new war.
Martin: Is war also the kind of event you trade on?
Tony: No. But it is the kind of event that can add powerful, unexpected momentum to the sector, which I already want to own even in peacetime.
As I explain in my report, the kind of events I do trade on are calendar events — prescheduled to happen. For each trade, I know when the event will occur. I know which sectors are the most impacted. And I have developed the math which rates the probability of a rise or a decline.
In other words: Timing. Selection. And market direction. Give me just two of those, and we can make good money. Give me three, and we have the equivalent of a trifecta.
Martin: Which events impact the defense sector?
Tony: One important one is durable goods orders.
Martin: Next release date?
Tony: Monday, June 26, a week from now.
Martin: Some people say that durable goods have too many wild swings.
Tony: Hah! But what causes those wild swings? It’s precisely the sector we’re talking about — aircraft and defense! And with the positive momentum we’ve been seeing for over a year now, I’m going to continue betting on a bullish impact.
Martin: You told us about the defense sector ETFs — ITA and DFEN. Can you trade options on those?
Tony: Not yet. But you can trade options on another one — the SPDR S&P Aerospace & Defense ETF (XAR).
Martin: What about individual defense stocks?
Tony: My top pick has long been, and continues to be, Lockheed Martin. It’s the largest defense contractor in the world. It has beat Wall Street expectations time after time. It’s also a stealth technology company.
Martin: How so?
Tony: Lockheed writes the software that goes into highly advanced weapon systems, making it next to impossible for hackers to gain access to the weapon systems. It’s a leader in cybersecurity. And as we’ve seen, cyberwarfare is not a future event; it’s already here. It’s an ongoing event. You can see it …
Martin: … in Russian election meddling.
Tony: … yes … in the politics of major countries; in targeted disruptions of foreign military systems; in economic espionage, sabotage, subterfuge.
Martin: So, what are the largest cybersecurity companies in the world?
Tony: I just told you about one of them — Lockheed Martin. I’m talking about their Information Systems & Global Solutions division. Huge operation! Gross revenues of $47.25 billion last year.
Martin: I get it. In total dollars, it’s huge. But that’s not its main focus, right?
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Tony: Wrong! In terms of contribution to revenues, Lockheed’s Information Systems division is now closing in on the F-35 Fighter jet, which was traditionally their biggest cash cow. Each of these two is now close to one-fifth of total revenues.
Not to downplay the F-35, mind you. Admiral Mike Mullen, former chairman of the U.S. Joint Chiefs of Staff, predicted that it will be America’s “last manned fighter” jet, which means that Lockheed Martin has a lock on that market going forward.
Martin: Experts I’ve talked to say that the biggest hole in our defense is exactly that — defense. We have enormous destructive power in terms of launching our own missiles, but very little ability to effectively shield ourselves against enemy missiles.
Tony: You’ve hit another big nail on the head. That’s why THAAD defensive missile systems will be in such huge demand, and you know who makes them, right?
Martin: Lockheed.
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| With the THAAD missile system alone, Lockheed’s defense contract is $1.3 billion and rising. |
Tony: Yes, Lockheed! Want to know the value of Lockheed’s defense contract for the THAAD alone? $1.3 billion! And that was back in February before the most recent re-evaluation and upgrade of risk levels.
Martin: Do really think the American public will support a massive defense buildup?
Tony: Can I answer that question with a short story about myself?
Martin: Sure, go ahead.
Tony: My father was a poor vegetable farmer; couldn’t afford to pay for my college. So I got a naval ROTC appointment, which meant I needed to cut my hair real short.
Trouble was, in those days, the only guys with short hair were military. And on campus, military guys were extremely unpopular with the girls. I saw two crew-cut guys trying to impress a couple of girls, and after they were out of earshot, one of the girls said, “Oh no! Baby killers!” The other spit out just one word — “Gross!”
Believe me, I got the message. I had no intention of going to college for four years without swooning the ladies. So I gave up the ROTC and washed pots in a dormitory cafeteria. My point is, patriotism was not popular in the 1970s. But now, despite all the divisiveness between left and right, the country is united in one thing: Everyone is bullish on patriotism. That’s a powerful undercurrent for more defense spending.
Martin: Agreed. Thanks, Tony.
Tony: Thank you, Martin.
{ 7 comments }
Great, New bullish in Cambodia for 2018 election ( based on commune council election 04, June 2017), the result showed that CNRP increase 1200% of number of CC member break out the commune strategy in local , this is base on two failing strategy of CPP (1. Not allowed garment worker to voted -720000 person not add other worker in -and-out country, if you want to moved Hun Sen from power , it is very easy way …..Creation of founder to support transportation of worker in both …. $ 50.00 per person in to two cases ( registration and election by $ 25.00 for registration and $ 25.00 for election focus on 2 million workers … Oh! Awesomeness for democracy here, final comment here
You know what often happens in nations with powerful militaries and ineffective political regimes. The military stages a coup, and takes control. The United States certainly fits both conditions required for such a coup. Especially the politicians out of control and working against one another at a high cost to the economy. And the military is currently very popular among most of the populace. Another failed war could be the spark required.
Martin is the most credible in the research arena. Myra my wife and I know many.
Thank You,
You had ny last name spelled wrong.
Great article.
“Everyone is bullish on patriotism”. What BS!
If people had any wisdom at all they would cut the military in half immediately which would still keep us as the number one military spender on the planet.
Take that money and feed some hungry people or give them medical care.
Stop spreading this military/patriotic/CIA/military-industrial complex. Shame on you!
War$.