Hi Alan, I do think that defense companies will get a lift in earnings/sales from the war now and going forward. Year-to-date, most of the major defense companies’ stocks are up approximately 15% while the S&P is down ~6%. The world has changed with the invasion of Ukraine and most government defense budgets are being approved at higher levels. Sadly the world does need to spend this money to protect our society and way of life and that money spent on defense will not be spent on other things. It would be much better if we didn’t have to spend this money.

As to rebuilding, I imagine that the world will come together to help rebuild. I haven’t studied it but I wouldn’t imagine that it would have a material impact on the use of global funds being sucked out of other uses. We can look to what happened in Kuwait after the Iraq invasion in the early 1990’s. The costs to rebuild were a couple of hundred of billion dollars. Kuwait is much smaller than Ukraine however therefore the cost is going to be much higher. The likely beneficiaries of this rebuilding are the large construction companies like Bechtel, Flour and heavy equipment manufacturers like Caterpillar.

Best, Brian