One of the ‘lefties’ favorite sons, Dan Rather, was recently on the “Imus In The Morning” show chiding our intelligence agencies for their recent failures. Of course the thing he failed to mention was that it was he, and those of his ilk, that have been working hard for many years to tie the hands of the very people he is now criticizing.

Many lefties have been raising their children with the false idea that America had no enemies. We were the only super-power in the world. Who could hurt us? Well, we got lazy, we got sloppy and let the Clintonistas convince too many that there wasn’t anything to worry about. When there was trouble, hey, no problem, it could all be solved by a stern lecture and lobbing a few cruise missiles.

“Those people” are noticeably singing a different tune these days, and two of the most amusing things of recent happenstance are:

  1. Seeing many of the lefties now waving flags (the same ones that berated those that waved flags before Sept. 11).

  2. Hearing all the stories in the media from “reliable sources” about how happy many lefties are now that President Bush is the president (of course, they are too embarrassed to give their names). They are ashamed of themselves – and well they should be.

What does it mean?

Well, one thing you can take to the bank is that the big numbers regarding Defense spending that are now being bandied about are not going to be near enough.

In the next 5 years, we are going to be spending huge amounts of money to bolster our defense and security.

In the city of Washington, D.C., alone, the estimate is that in the next 12 months, the cost for defending that city will rise six-fold.

While it will not be as big in other cities, we must remember there are dams, nuclear plants, national landmarks, power plants and much more to be defended from those enemies that the lefties told us were harmless.

Defense stocks had been on the upswing prior to 9-11. After the market re-opened the week of Sept. 15, many soared 25 to 35 percent the very first day, worked their way higher after that, and have now pulled back a bit.

For those of you waiting for Amazon, Yahoo, JDS-Uniphase, Juniper Networks, etc. to come back, we suggest you abandon those hopes. If you are interested in tech stocks, we suggest you take a hard look at stocks that are high-tech plays in the defense area. That is where the money will be made in tech in the next few years.

Alliant Techsystems (NYSE: ATK) makes all sorts of munitions for guns, bombs and missiles. ATK is involved in providing ammunition for the next-generation of weapons we will be using.

L-3 Communications (NYSE: LLL) is a major sub-contractor to the big names: General Dynamics, Northrop-Grumman, Lockheed, Boeing, etc. You can expect LLL’s order book, and earnings, to be in a strong up-trend for the next few years at minimum.

Edo Corp. (NYSE: EDO) is one we have mentioned here before. Even though it is up a good bit since then, we think there is still time to buy EDO. This company is heavily involved in next-generation technology in the Aerospace-Defense industry. The profit surge for this small company is going to be significant.

Telecommunications is an area where tech-advances are going to be huge in the next five years. One stock that has big possibilities is Applied Signals (Nasdaq: APSG), mentioned here last week.

Another one of interest is a small Telecom company called EMS Technologies (Nasdaq: ELMG). EMS Technologies is involved in making wireless communications systems. Some of these systems are now used by the military, especially in the area of satellites.

Wars are often (as now) in very harsh environments, and that calls for specialized computers and communications systems capable of operating in severe environments – areas where EMS Technologies has exciting possibilities.

ELMG is very reasonably priced at about 25 times trailing earnings. Sales for the last four quarters were about $270 million, and the company earned $.67 a share during this time. So, unlike many telecom plays, ELMG is already well in the black.

Even if our military scores quick successes in the Afghanistan war, there is much work to be done after that.

On Sept. 11, America was shaken out of its stupor, and we as a country are now more united than we have been in many a decade. As for the defense area, investors should find these stocks a good place to be in the coming years. And to that, we say “Amen” – it’s about time!

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