Defense analysts say that most of this has nothing to do with streamlining
the military for the light, super-mobile special ops needed to fight
terrorists. But who cares? There's money to be made. Predictably, the Big
Five are all doing well on Wall Street (except, oddly, Boeing, the only
loser in the fund, down 5.9 percent since 9-11).
But the real highfliers in the Axis of Evil are the security and biometrics
companies that will help homeland defenders track your every move and keep
out the jihadis. Viisage Technology, which makes digital ID systems, is up
317 percent; Visionics, which helps law enforcement manage fingerprint and
voice and face recognition databases, is up 182 percent; Invision
Technologies, which makes explosives-detection systems (useful at luggage
check-ins), is up a rip-roaring 1,299 percent.
Then there are bioterror detection experts like Cepheid and bullet
manufacturers like Alliant Techsystems, both looking very healthy. Point
is: Run down the line of companies that cater to a climate of impending
doom, you'll find rising returns in every one.
I called up Amy Domini, who manages Domini Social Equity for investors with
a "conscience," to brag about how well the Axis of Evil is doing. Social
funds like Domini make a point of shutting out tobacco, alcohol, gambling,
big oil, defense, small arms, and agribusiness stocks -- wherever profit
seems to come before people, the social funds say no. As for the Axis:
"Well," says Domini with a sigh, "I've never come across such a fund. If it
did exist, the manager would have to be the most cynical human being ever
born. But this is definitely his time -- the heyday for such a thing.
There's a man in the White House who appears to be absolutely obsessed with
war."
But if there's a war on, isn't it in fact far from cynical to invest in the
big-budget defenders of the nation? I mean, get with the program, Domini!
Come in for the Big Push. Come to think of it, it's the socially
"responsible" funds that are un-American: They won't invest in oil or
pistols or even Jack Daniels. Probably dangerous; definitely to be
monitored. More importantly, look at their lousy returns. Since 9-11,
Domini Social rose just .84 percent, beating out the Dow, sure, by a
hundredth of a percentage point -- squat compared to the Axis' 185 percent.
Other socials climbed in the 1 to 2 percent range. The Pax World Balanced
Fund was down 1.1 percent. Pax just doesn't pay.
praise Bush and pass the ammunition. Our fund is looking even better than
when Turchansky ran the numbers back in October: The Axis of Evil returned
185 percent for the period from Sept. 10 to the close on Feb. 5. For the
same period, the S&P 500 climbed a piddling .32 percent, the Dow Jones
Industrial a mere .83 percent.
Center stage in the fund, of course, are the Big Five defense contractors.
Boeing is set to make billions on deals for its lethally dysfunctional V-22
Osprey helicopter-turboprop and its generously over-budget F-22 Raptor
fighter jet. Raytheon makes the $750,000 Tomahawk missile, a favorite
weapon of the military and used by the scores in Sudan, Iraq and now
Afghanistan (the Navy, apparently, is running out of them). Lockheed Martin
just sealed a $200 billion development contract for something called the
Joint Strike Fighter. Northrop Grumman describes itself as "well-positioned
in missile defense," meaning that it stands to win on the $9.2 billion Bush
hopes to spend on the newly formed Missile Defense Agency (funding is
expected to rise to over $11 billion annually by 2007). And shipbuilder
General Dynamics is looking at some $7 billion in contracts for destroyers
and attack submarines and aircraft carriers and lots of other costly toys.
