On February 24, 2022, at 5:00 AM, something happened that changed history.
The first Russian missile struck Kyiv.
That morning, Rheinmetall was trading at €96.
Three years later, the stock sits at €1,740 — an 18x return.
I applied the same investment framework I always use: connecting major world events to real, underpriced opportunities. Rheinmetall became one of my best defense positions ever.
But today I have new positions with far greater potential.
Why? Because the defense market — what I prefer to call by its real name, the war market — is exploding. And unlike most sectors, it’s structurally easy to predict.
Let me be direct about something that makes people uncomfortable: war, in its modern form, has become one of the most predictable revenue environments in public markets.
Not because it’s good. Because it’s consistent.
Every major conflict since the Gulf War has followed the same pattern. A weapon performs on a real battlefield.
The footage spreads.
Defense ministries around the world open their checkbooks.
HIMARS destroyed Russian supply lines in Ukraine — Poland ordered 500 units before the year was out.
Palantir’s targeting software changed how commanders make decisions in real time — the company now holds government contracts on five continents.
The defense industry doesn’t run on sales cycles. It runs on geopolitical catalysts, and right now we have more of them than at any point since 1989.
Alex Karp has been saying this for years, in his own confrontational way.
When his own engineers protested Palantir’s military contracts, he told them, essentially, that they were building software for a world that refuses to acknowledge what keeps it alive.
You don’t have to like Karp.
But he understood before most that the post-Cold War holiday was ending — and that there was serious money to be made on the other side of that realization.
The more interesting story — the one the market is still slowly pricing in — is happening outside the United States.
Rheinmetall was a mid-cap auto parts conglomerate a decade ago. Today it’s building artillery shell factories, signing government contracts across Europe, and still can’t keep up with demand.
Saab went from commercial aviation to becoming one of the most sought-after radar and submarine suppliers on the continent.
These aren’t turnarounds. These are companies that were perfectly built for a world that took 30 years to arrive.
South Korea’s Hanwha is quietly becoming one of Europe’s primary artillery suppliers — faster delivery, lower costs, battle-tested systems.
Turkey’s Baykar built a drone that punched above its weight class in three separate conflicts and turned its country into a credible arms exporter overnight.
Israel’s Elbit Systems has been operating in a permanent real-world testing environment for decades — a competitive advantage no simulation budget can replicate.
Global defense spending crossed $2.4 trillion in 2024.
NATO members are moving from the 2% GDP target toward 3%.
This is not emergency spending.
Governments are rebuilding industrial capacity that was dismantled after 1991 — and that takes a decade, minimum.
Here’s the irony I keep coming back to: 30 years of ESG pressure created one of the best mispricings I’ve seen.
Institutional investors avoided defense.
Pension funds flagged it. A generation of analysts never bothered to model it.
The result?
Companies with 8-to-10 year order backlogs, sovereign clients who don’t go bankrupt, and pricing power that consumer brands would envy — still trading at discounts to the broader market.
The ethical stigma became the valuation discount. The valuation discount became the opportunity.
I’ve been building my defense portfolio for the past two years across four countries. Some positions are names you’d expect.
One of them almost nobody in my network is talking about — a company that controls a component so critical to European rearmament that without it, the entire supply chain stalls.
Below, I’ll walk you through everything.
Before we get into the full thesis — here are the previous Macro Notes editions on defense worth reading first:
Europe’s $400 Billion Ammunition Crisis: The “Pick and Shovel” Play Nobody’s Pricing In
In November 2025, a U.S. Army procurement officer named Steve Warren stood in front of a room full of defense reporters and said something that should have made every investor in the room pick up their phone.
The Massive $2.6 Trillion Defense Supercycle Nobody's Talking About
In July 2025, a defense analyst named Marek Świerczyński at Warsaw’s Polityka Insight center pulled up a spreadsheet that made him pause mid-keystroke.
In this week’s premium section:
My complete defense portfolio — positions, weightings, and entry points across 4 countries
Why I largely passed on the US majors — and what I focused on instead
The invisible bottleneck — one company controlling a critical chokepoint in European rearmament that the market hasn’t fully priced
My full thesis — what this cycle looks like over the next 5-10 years, and where I think we are in it
Risk scenarios — the three things that would make me exit the trade entirely