Mark Esper crawled out of the defense contractor speaking circuit long enough to announce that the Iran war will never end. Shocking insight from a guy whose entire post-government career depends on wars continuing.
He mentioned China benefits from this. America's greatest adversary gets stronger while we dump blood and treasure into another Middle East quagmire. Groundbreaking stuff. Really needed a former Cabinet member to connect those dots.
The defense stocks didn't move. Lockheed traded sideways. Raytheon shrugged. Northrop Grumman investors checked their phones and went back to lunch. Turns out the market already priced in forever war somewhere between 2003 and 2004.
Day traders saw the headline and immediately started scanning for Iran ETFs. Pulled up their Robinhood accounts. Searched "war stocks." Found a leveraged defense contractor fund with a 1.2% expense ratio and thought they'd discovered alpha.
They didn't notice the fund peaked in March. Didn't check the holdings. Didn't realize half the revenue comes from NATO contracts that have nothing to do with Iran. Just saw the word "war" and started clicking buy.
Esper's out here doing media rounds about geopolitical catastrophe. Cable news booked him for the full hour. Asked him about conflict escalation and strategic failures and the balance of power in the Pacific.
Meanwhile some guy in Ohio just bought fourteen shares of an aerospace ETF because the chart looked like it was "about to break out." He set a stop loss at a price the stock hit twice yesterday. He's now explaining Middle East policy to his coworkers based on a screenshot from Twitter.
The war helps China and never ends, but sure, your technical analysis on a defense stock will definitely be the edge you need.
Photo by Saifee Art on Unsplash
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