August 2, Economic Pulse – Buy stocks when there’s blood in the streets
Buy stocks when there’s blood in the streets
The strategy “Buy stocks when there is blood in the streets” is an old investment maxim that, while brutal, reflects some historical experience. It is attributed to various famous investors, including Baron Rothschild.
The idea is that during periods of high market volatility caused by crises, wars or other major events, stock prices often fall well below their real value. Investors who are able to overcome fear and buy stocks during such times can make substantial profits when the market begins to recover.
Panic and sell-offs: During crises, investors often panic and sell their stocks at low prices without assessing their long-term prospects.
Many investors who bought stocks during the Great Depression or after the world wars have subsequently become significantly richer.
But the most important thing in this strategy is to know which stocks to buy. Here, my friends, everything is critically simple.
The U.S. military-industrial complex (MIC) is a set of companies engaged in the production of weapons, military equipment and military services.
It is one of the most powerful and influential sectors of the US economy.
Lockheed Martin military equipment, including fighter jets, missiles, missile defence systems and spacecraft.
Boeing military transport aircraft, fighter jets, helicopters and missile defence systems.
Northrop Grumman production of unmanned aerial vehicles, radar detection systems, space systems and information systems
Raytheon Technologies missiles, radar detection systems, electronic systems and cyber security.
General Dynamics armoured vehicles, ships, command and control systems, and information systems.
Major players in the UK military-industrial complex market
BAE Systems tanks, infantry fighting vehicles, ships, and aircraft.
Rolls-Royce supplier of engines for military aircraft and ships
MBDA UK missiles
Leonardo UK Advanced Sensors & Computing and Integrated Mission Systems
QinetiQ UK multinational defence company
Babcock International service and repair of military equipment
Major players in the French military-industrial complex market
Dassault Aviation
Naval Group
Thales
Safran
Nexter
Major players in the German military-industrial complex market
Rheinmetall
Krauss-Maffei Wegmann
ThyssenKrupp Marine Systems
Diehl Defence
Heckler & Koch
Aerospace & Defence
The list below represents US companies operating in the aerospace and defence industry.
Market Capitalisation Capitalisation Performance Year % – 64 companies
Industrial Machinery
The list below shows 92 companies in the United States that are in the same industry: industrial machinery.
Market Capitalisation Capitalisation Performance Year % 92
In the slides below you can see and confirm that the strategy works. Using trading volume data, the Leonardo DRS stock chart shows prices when major players bought the stock outright and in large blocks.
HEI Heico Corp. engages in the manufacturing of electronic equipment for the aviation, defense, space, medical, telecommunications, and electronics industries.
MOOG inc. MOG-A
developer, manufacturer and systems integrator of precision motion and fluid control and systems for applications in the aerospace, defence and industrial markets.
If you buy the stock even at $79-80 – total return 100% over 2 years.
MOOG inc. $70 – $200
The information provided in this overview is of a general nature and may not be complete.
If you would like to explore this strategy in detail or have experience and ideas to share and add to the above – let us know in the comments to this article or write to us.
