TGIT: Trading the New Arms Race, 14 Trade Ideas and Other Stories

The Pentagon's $175B gift to your portfolio, defense sector stocks set to explode, Dr. Jim's latest Crash Course, gold bets, Palantir's threats, Bath & Body Works and much more. First time reading? Join other risk-takers, entrepreneurs, traders, investors, data geeks and alpha types. Sign up for free here.

TGI Thursday! (6/5) Ukraine's weekend drone spectacular against Russian airbases obliterated an undisclosed number of bombers and offers a glimpse of what's ahead in asymmetric warfare economics. While Moscow pummels Ukraine with hundreds of nightly drone attacks, Kyiv's surgical strikes demonstrate how cheap technology can bloody expensive military assets.

But let's dispense with the cheerleading. These attacks, however cinematically satisfying, won't budge Putin from his maximalist fantasies. The man has endured similar humiliations without blinking. What matters is the tactical arithmetic: Fewer Russian bombers means fewer precision missiles penetrating Ukrainian defenses. Drones are interceptable; bomber-launched missiles considerably less so.

The timing ahead of the Istanbul peace talks is hardly coincidental. Ukraine is performing for its Western patrons, signaling it remains a viable investment and not a sinking ship. Smart theater, essential politics.

The broader lesson transcends this particular bloodbath. Military planners still infatuated with exquisite, billion-dollar weapons systems are missing the revolution happening in real-time. Cheap, mass-produced drones are rewriting warfare's fundamental economics. Every general convinced his shiny new fighter jet represents invincibility should take note of these smoking Russian hangars.

The future belongs to swarms, not individual predators. Ukraine just provided the syllabus and the military-industrial complex just got more complex.

But, while Congress was busy allocating record defense spending in the latest budget bill, Trump's Golden Dome initiative just handed defense contractors the closest thing to a guaranteed way of printing money since the Federal Reserve. With $175 billion earmarked for missile defense and military budgets swelling faster than a Pentagon cost overrun, we're witnessing the birth of a new defense supercycle for investors.

This issue follows the money.

Stay lucky!

Letter to Editor

The “Golden Dome” isn't just another campaign promise — it's happening. Trump's resurrected "Star Wars" project will deploy hundreds of satellites to zap incoming missiles. But it comes with a price tag hefty enough to make the Pentagon's accountants weep. While Congress debates whether we can afford the space shield, the administration is cutting government jobs and slashing contracts to fund it. Read Full Story

Israel's “Iron Dome” mobile defense system has an 85% – 90% success rate.

—  Israel Defense Force

While everyone's obsessing over AI, Errol Coleman is locking in on missile defense. The "Golden Dome" isn't just protecting America — it's creating a whole new investment thesis. Countries are racing to build their own Iron Dome knockoffs, and defense contractors like Northrop Grumman (NOC) are cashing checks faster than Ukraine burns through artillery shells. Forget the old war economy. This is permanent infrastructure for a permanently unstable world. Read Full Story

Weapons makers are about to explode higher in the new defense supercycle. Elbit Systems (ESLT) has doubled this year by riding international demand but trades at nosebleed valuations. Kratos Defense (KTOS) bets big on drone warfare and hypersonics — if you can stomach a 289 P/E ratio. L3Harris (LHX) offers the grown-up play: Steady cash flow, improving margins and Golden Dome upside at reasonable prices. Three stocks, three strategies, one huge opportunity. Read Full Story

Howmet Aerospace (HWM) has quietly executed one of the market's most spectacular runs, with shares soaring over 100% in 12 months. This Pittsburgh-based supplier of jet engine components and turbine blades has transformed itself from a post-COVID recovery story into an AI infrastructure play, riding dual waves of defense spending and demand for data center electricity. Record margins, credit upgrades and a fortress balance sheet tell the operational story underpinning the tech stock’s valuations. Read Full Story

Some pundits will tell you the best way to avoid getting punched is to tie your hands behind your back. Scholars at the Cato and Quincy institutes argue that building missile defenses would actually make America less safe because apparently nothing deters aggression quite like being completely defenseless. This "peace through submission" strategy suggests we should trust Putin, Xi and Kim Jong Un to decide our fate instead of building a Golden Dome shield.

The historical record demolishes their argument. Under the ABM treaty's defensive ban, nuclear weapons multiplied like rabbits — up 500% from 1972 to 2002. Once America could build defenses again, the number of deployed warheads plummeted. Turns out the real arms race accelerator was leaving ourselves naked to attack, not building shields to protect American cities. Meanwhile, our adversaries are laughing all the way to their missile silos. Russia and China have been building extensive homeland defenses for years. Peter Huessy, president of geo-strategic analysis at the National Institute for Deterrent Studies, makes the case here.

Seeing your portfolio crawl along at market rates is about as thrilling as watching grass grow, and you’ve decided options trading might be the answer to your prayers. Fair enough — but here's what separates successful options traders from the weekend warriors: They approach this as a business, not a casino. While amateur traders chase home runs only to strike out spectacularly, professionals focus on consistent base hits through disciplined execution of strategy.

The difference isn't intelligence — it's education and emotional control. Those who treat options trading as an extension of their overall investment philosophy and not a get-rich-quick scheme tend to join the ranks of those who actually profit from volatility instead of falling victim to it.

That's where Dr. Jim Schultz comes in. His Crash Courses have attracted hundreds of thousands of viewers, and he’s earned his reputation as the premier educator for aspiring options traders.

View his latest release here.

Bath & Body Works (BBWI) just beat earnings for the eighth straight quarter, trades at half its historical valuation and pays you 2.7% to wait. Yet the stock sits at three-year lows because nobody wants to admit they're buying candle company shares. While analysts maintain buy ratings and the company aggressively buys back stock, sentiment remains stupidly bearish. But tastylive's Gus Downing cites a reliable historical pattern that suggests a minimum 50% upside. Read Full Story

Gold sits there like a lazy aristocrat — there aren’t any dividends and there’s only minimal excitement. It’s just expensive insurance against financial apocalypse. But here's where things get interesting: The options market overprices gold calls, creating a delicious arbitrage opportunity for anyone paying attention.

Buy the underlying, sell calls against it and suddenly your inert precious metal becomes a yield-generating machine. The math is compelling: collect 1.7% every 45 days while maintaining upside participation. Read Full Story

While China contemplates swarms of drones that could overwhelm Taiwan in hours, a scrappy startup in Torrance, California, called Epirus is building what amounts to the world's most expensive microwave. The company has turned Reagan-era radar technology inside-out, creating a "force field" that drops drones like dead flies, according to the MIT Technology Review.

The real question raised in our most interesting read of this week isn't whether this garage-door-sized death ray works — early tests suggest it does. It's whether America can scale up fast enough before the drone apocalypse arrives. Because when every teenager with a grudge can weaponize a DJI Phantom, traditional warfare has become as obsolete as a cavalry charge. Read Full Story

Is Excel America's Next Boogeyman? 👻

The New York Times managed to turn a routine government software contract into a dystopian nightmare this week. The breathless reporting suggested Trump tapped Luckbox watch list favorite Palantir (PLTR) to create some Orwellian surveillance database to spy on every American. A big leap? Sure, but other news outlets have amped up the story.

MAGA types screamed about deep state conspiracies while progressives declared technofascism had finally arrived. Both sides missed the rather mundane reality that Palantir isn't actually a database — it's glorified Excel that helps make sense of government data that’s already available.

Palantir cofounder Joe Lonsdale tried explaining this distinction, but nuance died somewhere around 2016. The Times is banking on Americans to be too lazy to think past the headline. Software doesn't conduct surveillance on people any more than hammers build houses. Palantir addressed the story on X.

More Cowbell

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A breakdown of defense spending in the GOP bill. 

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Your list of the best stocks to trade in June. 

ICYMI: tastylive’s best videos of the week. 

Trump and Xi just can't seem to agree.

ICYMI: Last week’s Luckbox TGIT. 

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