Dividend Investing | Industrials

Defense Stocks Bubble? Na.

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So, a recent article on Investopedia starts off warning of a possible bubble in defense stocks (eg. LMT, RTN, etc).  Throws out some scary lines about the dot-com bubble, etc. (different industry, right?).  But strangely, ends the article with 3 points about how investors should react, with 2 of those 3 points being bullish in nature, not bearish.  So is the headline just click-bate or confusion? (I am actually being a bit cheeky– I like the article; it does us a favor by giving some counter points to the main argument).

The three points:

  • It’s bubble time, take profits (well, ok, that’s helpful).  I am not in agreement.
  • Refers to Zacks Research being bullish:

“…with the United States being the largest [worldwide] supplier of defense equipment, it is undoubtedly a golden era for U.S. aerospace and defense stocks.” [1]

  • Again refers to Zacks being bullish:

“…Widespread geopolitical tensions that are prompting nations, both developed as well as developing, to rapidly expand their arsenal should keep the outlook for the U.S. aerospace and defense stocks favorable.” [1]

Hey, what about the Space Force?

Sources:

[1] – https://www.investopedia.com/news/bubble-defense-stocks-why-it-may-burst-soon/