Econ 101 – supply and demand. When you’re looking for stocks to buy, you want to make sure there’s a demand in the marketplace. Then you want to figure out who has the supply and in what quantity.
My favorite space right now is cyber security. Why? There’s a ton of demand. Let’s look at that for a second, then we’ll move on to who has the supply.
China, Russia, North Korea and Free Agent Hackers
Demand in cyber security is created by hackers, and there are plenty of them. They are all around the world.
Hackers include criminals who are looking for credit card data, personal data for identity theft and so on.
But others include entire states. And I’m not talking about Vermont. I’m talking big ones, like China and Russia.
But I’m also talking about small ones that can and have done a ton of damage in cyberspace, like North Korea.
So I have a question. Will hacker activity go up or down over time? Stupid question with an obvious answer. Maybe so obvious most investors overlook it.
Investing in Cyber Security for the Lazy (HACK)
Okay, so if you don’t want to sit there and dig into individual cyber security companies, there’s a solution for you. They’re called ETF’s. If you don’t know what ETF’s are, google it.
But in short, they are ways you can invest in one thing (stock) and let someone else to do the grunt work of picking the right stocks.
The one for cyber security stocks right now is called Factorshares Trust – PureFunds ISE Cyber Security ETF, also known as HACK (stock symbol).
You can buy it just like you would a stock. Easy.
FireEye, Inc (NASDAQ: FEYE)
FireEye provides real-time threat detection and prevention. They’re an innovative, forward-thinking tech companies.
They are also buying other promising cyber security companies. Early this year, they acquired another firm called Mandiant.
They are currently a $7.59 billion in market cap and their share price is up 54% year to date.
Fortinet Inc (NASDAQ: FTNT)
Similar company to FireEye, they do most network security solutions. They are well-positioned to take advantage of the IoT (internet of things) revolution, where microchips are being placed in everything.
They are currently at $6.8 billion in market cap and their share price is up 30.28% year to date.
Old School Players
Maybe you don’t like the risk of a company focusing on one market, even though it’s a good one. There are some old school stocks that have their hand in cyber security too.
IBM and Cisco are large Fortune 500 companies that are developing cyber security products and services. But they are diversified among many different industries, sectors and use-cases.