"Given worldwide economic turmoil and our outlook for slowing profits growth, we have been recommending that investors focus on defensive names with topline growth and strong earnings visibility. Stocks within the defense industry have typically provided a haven from such slow-downs, as government defense spending is largely immune to economic influences. If the economic situation becomes too severe, they can lead to instability and actually benefit the defense companies, as was the case in Indonesia earlier in the year. As investors remain concerned about the economic outlook, we expect the defensive nature of the defense industry to further benefit stocks within this group. Over the longerterm, we expect the group to benefit from rising defense procurement spending and continued restructuring toward higher-growth niches."
Tom Kruse / Casilla 5812 / Cochabamba, Bolivia Tel/Fax: (591-4) 248242 Email: tkruse at albatros.cnb.net