Army Training: More Than Just a Resume Bullet

In the Army you gain a lot of knowledge and experience, from learning how to best identify a roadside bomb to donning a gas mask in less than nine seconds. These are valuable skills, but too often military personnel don’t realize the information they’re gaining that will allow them to reap huge profits in the stock market. Let me give you a little background first.

I know you’ve spent a lot of time training especially as your equipment becomes more and more high tech. I remember loading up with more than $20,000 worth of equipment just to head into the field. My pack list always seemed to include a $3,000 set of night vision goggles, a $12,000 thermal imaging monocle, a $4,000 radio, a $1,000 M-4 topped with a $400 laser sight, a $600 flak vest… and that’s not even including a sleeping bag, MREs, helmet and everything else.

All that was just to support your average soldier in the field. Mobile command posts, communication equipment and cutting-edge weapons systems all cost tons of money to design and manufacture. Operating aircraft is just as expensive. For instance it takes $20 million to build a fighter jet that’s going to head out and fire off $82,000 Sidewinder missiles just to return to base, reload and do the same all over again.

As I’m sure you’re aware, it costs a lot of money to ensure troops are ready for battle and to buy the equipment necessary for land, air and sea warfare. I learned years ago when there’s this kind of money being spent by the federal government on procurement, there has to be certain people out there making obscene profits off government contracts.

And there are. The defense contractors have been making billions in profits since the post-Clinton hikes in military spending. But the retired military personnel that have been hired by defense contractors shouldn’t be the only ones benefiting. After becoming a contractor, they probably tripled their military salary, in addition to collecting their military pension checks -- but they could also be cashing five-figure bonus checks, thanks to egregious prices the military pays for equipment.

After working with outside contractors for a while, it was easy for me to see how they made their money. I noticed they already had very lucrative sales contracts in place with guaranteed predetermined profits. There was no competition and they charged whatever they wanted. These guys were making easy money.

So I started looking into how I could get in on the action myself. As an investor, I immediately looked at the big names like Lockheed Martin (LMT:NYSE) and Northrop Grumman (NOC:NYSE). After all, these two top defense contractors raked in a combined $67 billion in sales last year.

These guys were making obscene profits and their shareholders were laughing all the way to the bank. Shares of Lockheed have climbed more than 50% this year and Northrop is up 30%. That was direct profits from buying these defense contractors.

Granted, 50% doesn’t sound like much, especially if you’re only investing one or two thousand dollars. But these two stocks were for civilians that don’t know the military and what it’s buying nearly as well as you do. When you notice your new equipment coming in, chances are the investment community isn’t aware of it. And you can get in before Wall Street catches on and drives up the stock price. That’s how you can personally benefit from what you learn at work.

It comes down to the old investment philosophy of “invest in what you know.” Military personnel have been doing this for years and making hefty profits in the process. For instance, when you probably first heard about the lack of Interceptor ballistic vests in Iraq would’ve been a great time to buy DHB Industries (DHBT:Pink Sheets).

A couple months into Operation Iraqi Freedom, the first reports started to leak out about the lack of vests in Iraq and shares of DHB cost about $4. Once word made its way to Wall Street a few months later, DHB stock skyrocketed to more than $20 per share. That would’ve given you 400% in profits.

That’s not even the best one. FLIR Systems (FLIR:NASDAQ), which makes thermal imaging systems, was going through a lot of troubles. In fact, things got so bad the stock fell to 82 cents per share in December of 2000. But you would’ve have known thermal imaging is the way of the future and the U.S. military was buying as much as it could.

Within the next five years, FLIR’s stock soared to $35.24 and turning every investor’s dollar into $42. That’s an astounding return!

Finally, the best part about “investing in what you know” is that it’s 100% legal. Unless you’re negotiating contracts or making purchasing decisions for the entire Army, then you’ve got yourself a winning strategy.

That’s how you make money in the stock market: realizing something early and being the first one into the stock.

And this style of “invest in what you know” goes on in every industry. I utilize my experience in the defense, shipping, trucking, energy, aerospace and manufacturing industries to get in before everyone else. That’s how my newsletter, BreakAway Investor , gives advice to subscribers that make them money.

That’s all for now.

Andrew Mickey
USAF Veteran
Editor in chief, BreakAway Investor

BreakAway Investor, is based on the idea that a company, no mater how small or large, can earn a disproportionate share of its market if it has product it can use as leverage against its competitors. Breakaway Investor seeks to identify companies that are about to "break away" and become leaders in their industries or sectors, while providing double- and triple-digit gains to subscribers in a matter of months. Learn more…