How to profit from peace on Earth and protect goodwill toward men requires dedication by members of the U.S. military who individually serve in obscurity but whose responsibilities have expanded from defending America on land, sea and air to safeguarding U.S. interests in space.
The U.S. Space Force officially became the sixth branch of the U.S. armed forces on Dec. 20, when President Trump signed the National Defense Authorization Act for Fiscal Year 2020 at Andrews Air Force Base, Maryland. The annual reauthorization act included a key section this year that directs the Pentagon to create the Space Force, which will become the first new branch of the U.S. Department of Defense (DoD) since 1947, when the Air Force was split off from the Army Air Corps.
The Space Force is a spin-off of the Air Force, whose officials described the change as a historic moment that shows the importance of space operations to the national defense of the United States. China and Russia aggressively have been devoting additional financial support in a new race for space to close their multi-decade technology gap that left them behind even before July 20, 1969, when American astronauts became the first humans to land and to walk on the moon.
U.S. Space Force Will Organize, Train and Equip SPACECOM
The United States Space Command (SPACECOM) is intended to defend America’s vital interests in space that are taking on heightened significance as U.S. adversaries seek to develop ways to defeat the United States. SPACECOM, a new U.S. military combatant command launched in August 2019, followed the formation of CYBERCOM in 2018 to protect Americans from the most advanced cyberthreats. The DoD now has 11 combatant commands, each with a geographic or functional mission that provides command and control of military forces in peace and war.
“The dangers to our country constantly evolve, and so must we,” President Trump said in a White House Rose Garden ceremony when he announced the creation of SPACECOM on Aug. 29. U.S. adversaries are “weaponizing Earth’s orbits” with new technology targeting American satellites that are critical to both battlefield and commercial operations, President Trump added.
“Our freedom to operate in space is also essential to detecting and destroying any missile launched against the United States,” President Trump said.
The Space Force will organize, train and equip members of America’s military to support SPACECOM’s mission to provide national security and defense in space, President Trump said. Just as America has recognized land, air, sea and the cyber world as “vital warfighting domains,” President Trump said the United States now will treat space as an independent region overseen by SPACECOM.
Private Sector Profits While Helping to Provide Peace on Earth
The DoD is fielding a new generation of jam-resistant Global Positioning System (GPS) and communications satellites, as well as missile-warning spacecraft, that are smaller, tougher and more maneuverable than ever before, Vice President Mike Pence said in August 2018. Vice President Pence, who also serves as chairman of the National Space Council, said these initiatives are only the start of America meeting the “rising security threats” faced by the United States in space today and in the future.
The Space Force ultimately could absorb some or all space operations now performed by troops in the Army and the Navy, but such a transition could take years.
Once desolate and uncontested, space now is crowded and confrontational, Vice President Pence has warned. As the Defense Intelligence Agency detailed in a recent report, China and Russia are quickly developing and deploying capabilities — including anti-satellite weapons, airborne lasers, menacing on-orbit maneuvers and evasive hypersonic missiles — to turn space into a war-fighting domain, he added.
SPACECOM Takes Flight to Protect Peace on Earth
The emerging threats from U.S. foes require America to protect its freedom to access and operate in space. The next major conflict may be won or lost in space, according to SPACECOM.
“We are going to deter conflict from extending into space and ensure we can respond decisively if deterrence fails,” said Lt. Col. Christina Hoggatt, a public affairs officer with U.S. Space Command. “SPACECOM is exercising all options to ensure that the United States and its allies are able to protect and defend their respective assets both on the ground and on orbit.”
The U.S. Space Command aims to continue American space superiority and decisively address threats from U.S. adversaries by:
– integrating space operations into all established combatant command (COCOM)/multi-domain operations with the use of space experts.
– employing a resilient space enterprise to deter aggression and succeed in a multi-domain conflict, while developing and fielding new capabilities to defend America from hostile actions in space.
– upgrading U.S. space surveillance capabilities to attribute, track and neutralize hostile systems in space and on the ground for total space domain awareness.
– using time- and technology-tested principles of war to determine the most effective application of military capabilities.
– preparing U.S. space warfighters for combat against an adversary that thinks strategically.
– training American warfighters to use tactics to ensure the survivability of U.S. assets and seed doubt in the enemy that attacks will be successful.
– aligning space capabilities with allies and partners, along with the commercial sector, to address any threat in the time and manner of U.S. leaders’ choosing.
The creation of the U.S. Space Command better prepares the joint force of two or more military branches to respond to a war that extends into space, Lt. Col. Hoggatt said.
Private Sector Shareholders May Profit from Peace on Earth
In coordination with Air Force Space Command, SPACECOM is working closely with key private sector partners to develop and field new capabilities to defend America from hostile actions in space, Lt. Col. Hoggatt said. To accomplish this goal, SPACECOM is partnering with academia to research and to develop prototypes of new space technologies, in concert with private industry to rapidly field capabilities, she added.
“One primary example of how we are working with industry is the Air Force Space Pitch Day,” Lt. Col. Hoggatt said. “During this year’s event, 50 companies publicly presented the newest innovations in space technologies. Of those, 30 were invited to closed door pitches for a potential contract award up to $3 million. Selected companies are expected to produce a prototype within two years of contract award.”
Another example of staying ahead of the threats is the Space Rapid Capabilities Office, which is aiding the development of low-cost, rapid-reaction payloads, satellite buses, launch and launch control capabilities to fulfill joint military operational requirements of on-demand space support, Lt. Col. Hoggatt continued. Finally, wargame exercises involve commercial partners to project future needs to ensure warfighting capabilities can survive to let America win in a conflict that involves space, she added.
Former CIA Analyst Explains How to Profit from Peace on Earth
“According to my intelligence reports, the Pentagon is spending billions developing long-range nuclear warheads and hypersonic gliders that could hit any spot on Earth with great accuracy within an hour,” wrote Mark Skousen, PhD, a former analyst with the Central Intelligence Agency (CIA).
Skousen, who has written his Forecasts & Strategies investment newsletter for 40 years, opined in the January 2020 issue of his publication that China is developing competing weapons. Russia also poses a renewed threat with its nuclear arsenal, he added.
An exchange-traded fund (ETF) that Skousen recommends in his newsletter is Invesco Aerospace & Defense Fund (NYSEARCA:PPA), which not only offers a chance for capital appreciation but pays dividends that produce a current yield of 1 percent. The fund’s share price has risen in recent weeks and its holdings consist of approximately 50 U.S. companies that principally are engaged in the research, development, manufacture, operation and support of defense, military, homeland security and space operations.
Defense stocks overall underperformed the market for the first time in years during 2019, due significantly to the grounding all Boeing Co. (NYSE:BA) 737 MAX jets worldwide since March after two of the aircraft crashed within five months of each other and killed a total of 346 people. Boeing had delivered 387 of the 737 MAX aircraft to its airline customers before the grounding but built an additional 400 of the planes prior to announcing the suspension of production on Dec. 16.
Certain Defense Stocks Show How to Profit by Providing Peace on Earth
One of the stocks that is benefiting from helping to defend U.S. interests is Centreville, Virginia-based Parsons Corp. (NYSE:PSN). The defense contractor completed its initial public offering (IPO) on May 8 and is the “ultimate orbital electronic warfare stock,” said Hilary Kramer, who hosts a national radio investment program called “Millionaire Maker” and leads the 2-Day Trader service that has produced profits in 20 of its first 25 trades for an average gain of 8.70 percent.
“The company grew up in the missile age and management has gotten increasingly aggressive about extending the legacy business from protecting systems near the ground to the orbital frontier,” said Kramer, who also leads the GameChangers advisory service that has booked 33 profitable trades in its last 39 closed positions.
Parsons works with the National Aeronautics and Space Administration (NASA), the Missile Defense Agency, the National Reconnaissance Organization (NRO) and other government entities keeping an eye on outer space, with 42 percent of all revenue coming from federal appropriations. The company’s recent acquisitions have integrated its threat detection and cybersecurity systems into a broader satellite imaging platform.
Parsons Presents Another Way to Profit from Peace on Earth
“Parsons personnel like to talk about the World War II maps that guided allied troops through the beaches of Normandy,” Kramer said. “D-Day was fought on the ground but won in the air and Parsons bought the company that grew out of that effort fairly recently. It wasn’t an instant revenue grab — piling $100 million onto $3 billion doesn’t move the needle far — but the strategic potential is huge. Future wars will be fought in the air and won at the satellite level, which is where Parsons is reaching all the time.”
Kramer, who just finished a new book, “GameChanger Investing,” and launched the IPO Edge trading service on Dec. 10, predicted that the share price of Parsons would “take off” during the 2020s. In the meantime, the company’s share price has advanced above $40 per share from its IPO price of $27 in only seven months. Under the right conditions, Parsons easily can top $50, continued Kramer, who also leads the Turbo Trader, High Octane Trader and Inner Circle advisory services.
Parsons completed its third acquisition in the defense sector in just 14 months during January 2019 when it purchased OGSystems, a consulting firm that focuses on geospatial intelligence, big data analytics and threat mitigation mainly for government agencies.
Paul Dykewicz interviews Wall Street money manager Hilary Kramer.
“Defending against attacks on space capabilities is moving to the front burner at the Department of Defense,” said Bob Carlson, who leads the Retirement Watch advisory service. “Spending has increased and is likely to increase more in the coming years.”
Most of the contracts to protect America’s space-based assets are going to companies that already are leading players in defense, but offer specialties in space technology, Carlson said. The government spending at this point does not make a “big difference” in the revenues of any of the large defense contractors but they are likely to grow in the years ahead, he added.
“I’ve previously recommended the combined firm,” Carlson said. “It will grow at a solid rate and is selling at a discount because of concerns about how long it might take for the firms to merge successfully.”
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Lockheed Martin officials indicated that “space is a key enabler that must be protected end-to-end.” The company, a founding member of the U.S. National Security Council’s newly formed Space Information Sharing and Analysis Center, creates technologies that power exploration, connectivity and security from space.
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Boeing not only struggled in 2019 with the grounding of its 737 MAX aircraft after automated flight control problems contributed to two crashes, but it incurred a recent failure of its new CST-100 Starliner spacecraft, which aborted its Orbital Flight Test. The spacecraft, designed to transport humans after completion of its flight tests, failed to reach proper orbit but was saved for future use when it landed in the desert at White Sands Space Harbor in New Mexico just two days after its Dec. 20 liftoff on an Atlas V rocket from Cape Canaveral Air Force Station in Florida.
That mission for NASA failed because the capsule’s clock was improperly set, causing the spacecraft to end up in the wrong orbit and forcing its return to Earth without accomplishing its planned International Space Station rendezvous. However, the spacecraft completed the first touchdown of a human-rated capsule on land in U.S. history with the aid of three main parachutes and six airbags.
The operational problems preceded the departure of Boeing’s CEO Dennis A. Muilenburg on Dec. 23, following his testimony before Congress in late October when he faced sharp criticism from lawmakers and the families of 737 MAX crash victims. Muilenburg, who appears eligible to receive up to $26.5 million in cash and stock as a severance package from the company based on its most recent proxy filing with the Securities and Exchange Commission, was replaced on an interim basis by Chief Financial Officer Greg Smith. Boeing’s Chairman David Calhoun agreed to assume the CEO duties starting Jan. 13.
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Boeing’s share price rose 2.91 percent on Dec. 23, the day the company announced the change in its leadership.
Space is becoming an important new domain for potential military conflict. The United States is relying heavily on its defense contractors to ensure America does not surrender its traditional leadership in space amid mounting military threats from U.S. adversaries.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is the editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. Follow Paul on Twitter @PaulDykewicz.