Is 'National Security' The New Investing Priority? | Peter Tchir

**SPEAKER_1** (0:01)
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**Peter Tchir** (0:28)
I think ultimately, this pro-sex global economy can be a steady state as well. Each country will do a fair bit on their own. They'll work with their close allies and some and do some trades in the broader market. It's not going to affect things like running shoes and things like that. Who really cares where those are made relative to where is steel made, where is aluminum, where are we smelting our copper, where are we finding our zinc, where are data centers and AI, and electricity is going to be a big part of it. But I think unfortunately, like a lot of things, you can be in one stable state and get to another stable state, but there is a lot of risk in between.

**Adam Taggart** (1:08)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. With the era of globalization ending and nationalism on the rise around the world, today's guest has been advocating investors strongly consider the ProSec trade. ProSec is short for Production for Security, aka the sectors essential to national security. Since his last appearance on this channel, in the US., President Trump has proposed a massive 50% increase in military spending next year and many European nations are considering similar increases. Is betting on further prioritization of national security spending looking even more attractive now? How has the ProSec trade been performing so far? To answer all these questions, we're fortunate to welcome to the program Peter Tchir, head of macro strategy at Academy Securities. Peter, thanks so much for joining us today.

**Peter Tchir** (1:59)
Thanks a lot for having me.

**Adam Taggart** (2:01)
Hey, Peter, it's great to see you again. I've definitely gotten some great feedback on your prior appearances here. This whole ProSec trade, super interesting concept and certainly seems to be a good fit for the times. Just last month at Davos, we had the Trump administration travel there to deliver the message, globalization has failed.
In the wake of that, obviously, as I said in the intro there, we're seeing the US., Europe, a bunch of other nations prioritizing, really beefing up their military spending. Is this indeed adding tailwinds to the ProSec trade?

**Peter Tchir** (2:42)
Yeah, I think it is. Now, like everything else, it's been a little bit choppy lately, and you're seeing some give and take. I do think names like Intel, which I like, it's down a little bit from the highs, but still well up on the year. I think that will continue to do well as people realize that. It's interesting to me, you're starting to hear TSMC almost talk about backing out of some of their building new facilities in the US. Because I think they have to protect themselves and their home. So I think you're going to see that. I think ultimately biotech is going to be a big part of it. To me, you've even seen solar do well. It's a lot of this is really coming down right now. Electricity production, rarest critical minerals, it's the smelting, the refiners. And the one thing that's been a little bit tricky with the trade, a lot of these are fairly small cap. So one day they're up 50 percent, two days later you look, they're down 25 percent. So you got to keep going with that. And I do think though there's the opportunities are really global now too. I like BP, I like Shell. I think the rest of the world is kind of getting into this concept of Pro-Sec. And I think I've kind of further refined where we are a little bit in this kind of production for security. As each country goes to it, I think we're kind of moving from what was a stable system, kind of this rules-based, you know, economy, where I think if anyone, China was the one kind of breaking the rules, right? They were pushing the envelope, they were taking advantage. And now we've kind of, you know, so we're in a steady state. And I think ultimately this Pro-Sec sort of global economy can be a steady state, as well. Each country will do a fair bit on their own. They'll work with their close allies and some and do some trades in the broader market. It's not going to affect things like running shoes and things like that. Who really cares where those are made relative to where is steel made, where is aluminum, where are we smelting our copper, where are we finding our zinc, where are data centers and AI and electricity is going to be a big part of it. But I think unfortunately, like a lot of things, you can be in one stable state and get to another stable state, but there's a lot of risk in between.