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What is MDEF™ Investing? Strategy before tactics. Strategic investments dictate tactical actions in the Metals, Defense, Energy & Food sectors.

- Jeffrey C. Borneman

Speed Chess, Blitz Chess & Bullet Chess in Defense DEMAND

Jeffrey C. Borneman | July 2, 2014

The exact type of any given chess match is determined only by the speed with which it is played. Investors take heed: In the ever-quickening chess match of military geopolitics that is unfolding right now, it is fair to say the world is now playing Speed Chess only; two more styles left. Stay with me for an explanation:

It is a given, a universal law really, that logistics wins or loses wars. Prepositioning of military assets (manufacturing and deployment) is ongoing for major nation states and can be understood as first-gear in a car (Standard Chess); it is often slow, methodical and receives little attention from the press. Second gear moves more quickly and visibly and involves "additional" troop deployments to respond to existential threats, real or perceived (Speed Chess). This is where America and its NATO allies are today in both the middle east and Ukraine. It is the "relative" calm before the storm of War. Blitz and Bullet Chess (third and fourth gears) are just that; very fast implementation of War plans which throw every asset into the fray to achieve victory as fast as possible - or not. The length of the War is determined by both strategy and tactics but both rely on the logistics of "inventory" (how many bullets do you have left ...?").  

Using the gearbox/chess analogies, we find that our administration has now ordered 750 combat troops to the "contested environment" of Iraq according Pentagon spokesperson Kirby. We are also deploying an undetermined number of troops from the US to Europe to counter Russian troop deployment to the border of Ukraine, according to our US NATO commander Breelove. And lastly, Japan has voted today to rewrite its postwar constitution to include "collective" offensive capabilities in its Pacific Rim front against Chinese aggression and expansionism.

The Saudis, Turkey, Jordan and Israel have their collective hands full with ISIS and other areas of unrest (including Hong Kong, Venezuela, Mexico and Argentina). 

Collectively the world is now playing Speed Chess in the game of military geopolitics. These conflicts promise to accelerate into Blitz and Bullet Chess. It is then that NATO allies will come en masse, cash-in-hand to the NATO 7-Eleven at 2 a.m. looking to restock their inventories. Those investors who understand where we are now will position themselves accordingly. 

If you would like to know how the MDEF™ Investing strategy is positioned for such events or to discuss 1H '14 results, do contact me.

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