There’s a historical cycle that runs like clockwork.
It’s actually quite tragic, but it also reaps fortunes to those who are positioned for it.
It’s the war cycle.
There’s no exact timetable, but historians estimate it takes roughly 80–85 years to play out.
That’s how long it takes for society to shed the physical and psychological scars of a major global conflict.
As time goes on, the veterans of those wars die off, their children grow older and forget the hard-learned lessons of their predecessors, and their grandchildren live lives almost completely estranged from the horrors of cataclysmic warfare.
In that context, it’s no coincidence that the three deadliest wars in American history were spaced 80–86 years apart:
The Revolutionary War in 1775, the Civil War in 1861, and U.S. entry into WWII in 1941.
It’s also disconcerting that it’s now been 84 years since that last one.
So, in effect, we’re due.
It’s not just America, either.
This cycle plays out through 500 years of Western history.
Even the Etruscans who predated the Roman empire had a Latin word for this period — “saeculum” — that denoted a full cycle of population renewal.
Most recently, historians William Strauss and Neil Howe defined this period as the “Fourth Turning.” These turnings generally occur every 85 years resulting in periods of political and economic crisis, which are then followed by longer periods of prosperity.
In 2023, Strauss and Howe built on that hypothesis, proclaiming that the Fourth Turning is here.
And a cursory glance around suggests they might be right.
American society is fracturing, our government is flailing, and there’s dwindling faith in our institutions.
Why do you think gold and silver prices are trading at record highs?
What’s behind the shift from fiat currency to crypto?
It’s because the United States has lost the world’s confidence.
And the picture is even more stark with respect to conflict.
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Diplomacy has been all but abandoned.
The U.N. was established as a deliberative body to maintain peace at the end of WII. Today, it’s toothless and ineffectual.
NATO was also founded in the wake of WWII in 1949. For decades, the cornerstone alliance held up as a firewall for major conflict. But over the past 10 years, it’s shown signs of cracking.
And arms control and nuclear non-proliferation treaties signed at the end of the Cold War are being jettisoned.
Both President Trump and Vladimir Putin have pledged to resume nuclear weapons tests. And China is hard at work building its own formidable arsenal of nukes.
Everywhere you look, soft-power initiatives like foreign aid, diplomacy, and cultural exchanges are being abandoned in favor of military buildups and live-firing wars.
And that is where the profit opportunity lies.
It may be bleak, and it may be cynical, but investors who bought into defense and logistics suppliers prior to major conflicts made massive fortunes.
This time around is no different. You’re already seeing it.
The iShares Aerospace and Defense ETF (ITA) has doubled in value over the past two years. And the Global X Defense Tech ETF (SHLD) is up 160% in that time.
Major defense stocks like Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), and RTX (NYSE: RTX) have all made big runs, as well. And a smaller crop of tech-focused defense upstarts like Palantir Technologies (NASDAQ: PLTR), Kratos Defense and Security Solutions (NASDAQ: KTOS), and AeroVironment (NASDAQ: AVAV) have done even better.
But the key takeaway is that we’re still at the very beginning of this trend.
A massive global conflict has yet to break out, but it’s not hard to see the gathering storm.
This military buildup — a new era of $1 trillion defense budgets — isn’t the endpoint.
It’s the precursor.
And most of all, it’s a chance for investors to get in so that when all breaks loose and everybody else panics, they come out ahead.
If you haven’t yet positioned yourself there’s still time. You can start here with my latest report on President Trump’s AI Victory Plan.
It provides a tidy short list of those tiny tech suppliers that are surging big time on the major warfighting trends of the future.
Fight on,
Jason Simpkins
Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more… He also serves as editor of The Crow’s Nest where he analyzes investments beyond the scope of the defense sector.
For more on Jason, check out his editor's page.
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