DEFENSE SPENDING AS A BENEFICIARY

Slthough Donald Trump has cast himself as an isolationist president, that is, generally reluctant to intervene in foreign military adventures, the Trump administration bodes well for persons in the defense industry. That is because Trump has vowed to strengthen the military.

One need only look at his campaign rallies to see the enormous number of retired generals who endorse him. It could not be surprising, however, that many of these generals might have consulting agreements with defense contractors.

Contrary to the initial perception of many, the defense industry is not monolithic nor is it comprised entirely of a few large companies. Most defense contractors engage in incredible array of subcontractors to produce components. One could expect that trumps nationalistic rhetoric would mean that these subcontractors would all be located in the in the United States.

In every market, certain types of companies become ”fashionable.” Facebook, twitter, and Internet-based companies have been the darlings of Wall Street. It is entirely possible that the market’s attention will be focused on the defense industry. government contracts provide an assurance of revenue stream and we can expect to be a number of going public transactions over the next few years with defense subcontractors.