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SKEPTIC’S GUIDE TO INVESTING
Weapons, Wheat, and Rare Earths: The Real Stakes in Ukraine
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The Ukraine conflict shows no signs of resolution despite early predictions, with Russia taking a long-term strategic approach that suggests we may be only halfway through what could become a six-year confrontation.
• Russia's aggression extends beyond Ukraine with increased military presence near Finland, telecommunications sabotage, and cyber warfare against Europe
• Ukraine is developing a powerful military force with homegrown equipment and innovative tactics, potentially becoming a major NATO contributor
• Europe is shifting from ESG-focused spending to military expansion, with Germany committing 5% of its budget to defense
• Defense companies with diverse military offerings and less dependence on US government financing present long-term investment opportunities
• Ukraine's rare earth mineral reserves represent strategic assets coveted by both Russia and Western nations
• Energy security has accelerated Europe's investments in alternative sources, creating opportunities for American LNG exporters
• Long-term investment in defense requires tolerance for significant volatility driven by geopolitical developments
Join us next time with special guests Rich Weiss and Marcus Sturtevant as we continue exploring investment opportunities in an increasingly complex global landscape.
Straight Talk for All - Nonsense for None
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Disclaimer - These podcasts are not intended as investment advice. Individuals please consult your own investment, tax and legal advisors. They provide these insights for educational purposes only.
Hello everyone and welcome to Skeptic's Guide to Investing. I'm Steve Davenport and I'm here with Clem Miller and we are going to talk to you today about the issue that doesn't seem to go away Ukraine and the EU and Russia. How does this all affect the US economy, the military sections of our industrial sector, and is this an opportunity for weapons? Or is this something that is going to go away soon and by the time you get into the military stocks, they will probably have gone down because Trump will have negotiated a new peace?
Speaker 1:I'm not sure that anybody expected on the first day, as Trump promised, he would call Putin and they would have a conversation and the Ukraine battles would end. It hasn't happened. It doesn't look to happen because Trump is now stepping away from the peacekeeper role and the Pope or Turkey's Erdogan are stepping into that void and trying to figure out a way to stop what is the most violence in Europe that we've seen many years. So I guess I have to ask you Klan, is this war, which was supposed to be over on Inauguration Day, going to see the next inauguration, or do you think we'll see something that will bring it to the peace table and allow us to say that there is peace in Europe again?
Speaker 2:So if you look at World War II from 1939 to 1945, world War II in Europe that is, it was a six-year war. So we are now halfway towards that six-year period. So I think that and you know Putin and the Russians they tend to look sort of long-term. You know they don't look at this as, oh well, we failed to go in for three days, we failed to take Kiev in three days, therefore we're going to end the war. They don't think of it that way. They think in terms of long-term strategic objectives, and so my guess is that this thing is about half over at this point. That would be my guess, and I think that what we're seeing is, you know, you got to look at Ukraine as not just a contained issue.
Speaker 2:I think you need to look at Ukraine as part of a bigger puzzle which includes activities that Russia is engaging in against other European countries, against other European countries.
Speaker 2:So, for example, beefing up forces along other parts of the border, especially with Finland recently, also being a little bit more aggressive in the Baltic Sea and, in addition to that, doing things like cutting telecommunications cables that go from, you know, western Europe up to Scandinavia. So I think there's a bit and you know, some cyber activity. So I think there's this is part of an overall aggression aimed at trying to weaken Europe and, to some degree, weaken the United States as well. And I think the Russians, uh Putin is counting on Trump's impatience, uh to try to uh either uh put him to the wayside so that he's irrelevant to this equation, or bring Trump on their side. And I don't think the Russians are quite succeeding in that. I mean, they're trying to exploit the fact that Trump wants you know, says he wants peace in Ukraine. So they're trying to exploit that. But at the end of the day, I don't think, I think the Russians are not going to do things that actually, you know, bring a permanent peace to EuropeMAN.
Speaker 1:Doesn't it feel, though, that if the Europeans can have to deal with Russia on their own, without US heavy involvement, both from financially and from resources that Putin has won Because he knows how to distract and approach Europe, because he knows that they've been mainly a pacifist consumer of his energy, if he can just take away the US's involvement? If the US hadn't been involved for the last three years, where would we be in Ukraine today? I think it would have been over. I agree with that. I agree with that. So I agree with that. I guess I'm saying that if Trump is becoming neutral, then that's a very pro-Putin move, and so, even though it allows him to not do anything and then say, hey, I tried to make a peace, but nobody would make the peace and therefore the blood is not on my hands, yeah, us neutrality plays into Putin's hands, and the main reason it plays into Putin's hands is because the US is likely to start moving away from sanctions, and it's US and European sanctions that have really hurt Russia.
Speaker 2:And Putin is playing into Trump's deal-making kind of philosophy. The Russians have sort of dangled energy resources and other things in front of Trump, and so Trump wants to try get access to those, and you know Putin is using that to sort of, you know, push the US into a neutral position. But I'd also say another thing too the Ukraine we see today is not the same Ukraine that we saw in 2022, and certainly not the same Ukraine we saw in 2014, before Crimea. All throughout this time, ukraine has been getting stronger and stronger and stronger and developing its military and expanding it and, you know, bringing it up to speed technologically and doing a lot of homegrown military issues, military equipment, namely drones, for example and also adopting new military tactics. Ukraine is going to end up with the most powerful, I believe you know, outside of, you know certain areas of, of technology. I think Ukraine is going to end up having the, you know, the most powerful army in Europe at some point, if it doesn't already, and that's why you know I, that's why I sometimes tell people and I'll say it again here that I think the EU needs Ukraine just as much as Ukraine needs the EU. Because even Zelensky has said that once we're in NATO this is Zelensky and his desire to become part of NATO Once we're in NATO, we are going to make one of the we, ukraine, are going to make one of the biggest contributions to the NATO alliance.
Speaker 2:Because of their frontline status and huge army, I mean NATO. Nato, I mean NATO, is a very different place. You know European NATO that is in a very different um position than it was, you know, five years ago. You've got ukraine's army, you've got poland's big army, you've got finland and its big army. Now in nato it's a uh. You know, the eastern front is very um is very militarized right now. The Eastern Front of NATO is very militarized right now.
Speaker 1:Is this a short-term reaction or is this a long-term trend? That's what I have a problem with with military stocks and this whole discussion about military usage and as an investment. Military usage and as an investment Is it a short-term opportunity or is it a theme that you could invest in over years? Because it feels to me like Europe had a movement towards ESG and environment and they focused their energy in the economies and the environment and now, all of a sudden, merck has turned a corner and said we're going to make the budget and allow for the debt to move up because we are going to commit 5% to the military, and I just don't. It's hard for me to determine.
Speaker 1:Is this a short-term reaction? That could turn just as quickly the other way if there were a peace in Ukraine. But if we don't believe that peace is really able to be maintained, then we will constantly see the demand for military weapons and therefore it's a better investment theme. I hate to break it down to investments when we're talking about the lives of Ukrainians and Russians. I hate to break it down to investments when we're talking about the lives of Ukrainians and Russians, but I think that's what's been a struggle for me. Going forward is how heavily do you want to invest in military, and is it really a long-term theme? We've had peace for so long, relatively speaking, around the world that to think that we're going to move into a military age feels a little bit less likely, do you agree?
Speaker 2:um, I think we are going into a military age, uh, and so let me, uh, let me give you a few reasons for that. One is, I do think to your point about the EU sort of switching gears from sort of an ESG orientation to a military orientation. I think the EU folks think they can walk and chew gum at the same time.
Speaker 2:Oh, that's ridiculous walk and chew gum at the same time oh, that's ridiculous, and no, and in fact, in fact, I think that you know one of the reasons why the EU has been trying to promote green energy and natural, and you know green energy wind, solar is because they were dependent on Russian natural gas, and so I think and they've built some facilities to take US natural gas as well, so I think that reducing a dependency on your enemy is something they thought was a good thing, and the ESG, you know, you know green energy, allows them, as you know, one part of their strategy to deal with that. So I don't think, I don't think the two, those two things are are inconsistent. I really don't.
Speaker 1:So I think that, in terms of well, if they wanted to be more independent and that was the reason then wouldn't you have kept nuclear? Because it feels like if if you, when you're saying is true they wanted to separate themselves from russia. The fastest way is to develop nuclear, not to develop solar right.
Speaker 2:Well, yeah, that's a technology that already exists.
Speaker 1:Yeah, you would think so you can't really, I don't know. I look at nuclear and I think that has to be part of your plan.
Speaker 2:Right, it should be, and it still is very much a part of the French plan. The French have never gotten rid of nuclear. But Germany I don't know how far they have denuclearized, but you got to remember Fukushima was 2011. And that's what started the German denuclearization and that's 14 years ago, and so they probably made already some progress on that and they did this before 2014,. The Crimean invasion they certainly did it before 2022. So they probably made some progress already toward denuclearization. But you know, still, I think that you know this emphasis on green energy is part, you know, is connected to this plan for trying to become less dependent on Russian natural gas. That's not to say they're not dependent on natural gas. They're getting natural gas from North Africa, for example. They're getting LNG from Qatar. They're getting LNG from the United States.
Speaker 1:That's not somewhere where Europe was still getting natural gas from.
Speaker 2:Russia. They have a little bit coming in from the South, not from Nord Stream, of course, which was blown up, but from the south, not from nordstrom, of course, which was blown up, but from the south versus, uh, I believe, something called turk stream, um, but through the south, uh, was it another country, and russia supplies their country. Is that? Well, it's uh, this, this, this. It relates to the fact that hungary andvakia, I believe, are still getting natural gas from Russia versus the southern pipeline.
Speaker 1:Okay, it feels like the US is trying. I mean, there's a bill in the Senate with 80 co-authors who wants to increase the tariffs on Russia to 500% and harden the economic damage to Putin, and if that bill were to ever get brought up, I think it would get passed and it would get passed to the House, and the House has a majority to pass it and put it on Trump's desk. Do you think that's where we're going? Is it when he starts focusing on these tariffs for Europe as a trading partner and starts to look at what's our common enemy, that will start to? I mean, do we have the bandwidth in Congress to walk and chew gum and do a tax bill and a uh, a bill on international affairs, or do we have to pass one before we can move on to the other?
Speaker 2:Well, you could put uh, you could put one inside the other, for example, or you could do them in parallel, but you know, it isn't a big beautiful bill? Already the big beautiful bill, and if you can't change, well you'd have to go back to the House and get you know and get some changes to it. Now I think it's more likely it would be a separate bill. But the problem is with that is we already have and so does the EU we already have very extensive sanctions on Russia and tariffs are being enforced.
Speaker 2:Oh yeah, oh yeah. And tariffs are just a ridiculous concept when it comes to Russia, because they don't export anything to us. So it's just the idea, ridiculous concept when it comes to Russia, because they don't export anything to us. So it's just a. It's the idea. I know Trump likes to think of tariffs as being the solution to everything, but you know, tariffs there's, they're irrelevant when it comes to Russia. I mean, the fact that he might be talking about tariffs and with regard to Russia to me suggests possibly that he's just trying to. You know, he's being, you know, subtly pro-Putin by actually recommending something that actually has no impact on Putin. I could see that.
Speaker 2:Yeah, so it's sanctions that really matter, the, the, the two things that really um, well, three things. There's three things that could really hurt russia. One is giving more and more weapons, and more advanced weapons, to ukraine. That's the second. That's number one. Number two is allowing uh r allowing Russia's seized foreign assets, western seized foreign assets, to be used to pay for weapons and there's a lot of those for a lot of those assets right now. There, the West is allowing the interest earned on those assets to be used by Ukraine. But if we were to actually allow the bulk, the corpus, so to speak, of those assets to be used, that would be a huge thing. And the other thing, the last thing, would be to really crack down on this so-called shadow fleet that Russia is using to secretly export oil. And if we really crack down on that, that would be.
Speaker 1:That's what I meant when I said that we need to crack down because everybody knows there's this additional fleet of oil moving around that is not being captured by these sanctions.
Speaker 2:But can I take you back to the US, for example?
Speaker 1:Yeah, tell me why we're going to see this bill pass and it's going to make an impact on what's happening in Russia. Do you think there's courage in the Republican side to actually do something on their own, without the leadership of Trump?
Speaker 2:You know. I mean he still has to sign the bill or get a super majority. So I don't think anything's going to happen on Russia unless you know, unless you know from the US standpoint, unless the Trump administration is convinced to do it. So I don't think that's the case. But but let me, let me just dive into that a little bit more.
Speaker 2:You know there's, there's the there. You know there's the types arms sales to Europe, or US arms deliveries, and US arms sales to Ukraine and also to the rest of Europe. There's really three types. One are ones where we're actually financing the arms sales. The US government is financing the arms sales. The second is where the US government is giving away or financing, on very, very inexpensive, cheap financing terms, unused stocks that we have that haven't been used, in other words, surplus that we have that haven't been used, in other words, surplus right, military surplus. And the third type would be sort of ongoing sales that aren't financed by the US government.
Speaker 2:So my guess is that we're going to see much less of the first kind. In other words, I think that US financing of arms sales to Ukraine might diminish a lot. But does it get replaced by European arms dealers? Well, it would be. No, I think it. I think what's going to happen is the US is going to say to our, our defense companies we're not going to pay for it anymore, so you have to make commercial deals with ukraine and ukraine's going to have to come up with the money, probably through these seized foreign assets, in order to pay. Or the europeans would have to pay for it and they would pay for, uh, commercial weapons sales from the US to fit gaps which exist within the Europeans.
Speaker 1:Wouldn't they want to use European companies? If they're going to have to pay, wouldn't it be better to pay them?
Speaker 2:Well, I mean, there are certain things that Europe has, that the US has, and there are certain things that Europe doesn't have, that the US has, and just one example for that would be the Patriot defense system Europe doesn't really have something of that capability and so Well, that's one question.
Speaker 1:I have two or three questions that I just need a yes or no answer Will Ah, there's never a yes or no answer.
Speaker 2:There's never a yes or no yes there has to be.
Speaker 1:We can't have these podcasts go on forever. There needs to be some yes or no's. So first, yes or no. Germany will release and deliver the Taurus missile to the Ukraine. Yes or no?
Speaker 2:Yes.
Speaker 1:The US will pass the bill in the House and Senate to increase sanctions against Russia, yes or no? Yes, trump will sign said bill to deliver sanctions against Russia. Yes or no.
Speaker 2:I don't think so. Okay, well, it depends on what's in the sanctions bill.
Speaker 1:Well.
Speaker 2:The reason I think Trump may not sign it Is that Trump Sees dollar signs and he doesn't want to be. You know he may not lift existing sanctions but he wants to leave open the possibility that you know he could make you know for the US and perhaps for himself, money in Russia. He's, regardless of what people may think about you, know about whether Trump is in Putin's pocket and it's kind of hard to know whether that's the case or not. He's been very interested in Russia since it was the Soviet union. You know going over there trying to build a Trump Tower. That's all public record. He's been very interested in doing business in Russia. I don't think that's gone away.
Speaker 1:It seems to me that the biggest opportunity for the US in the next, when I look at the energy space, is to become the natural gas supplier to Germany from the East Coast ports of LNG and from the West Coast ports to Japan with LNG. If we became an LNG power, wouldn't there be two huge allies who would start to be dependent upon us for their energy supplies, and aren't we a better supplier in terms of stability than what they're doing with Russia? It feels like everybody talks about the US making more money and the US having more. You know Trump wanting to have more consumption of the US products. And we have this natural gas that we're just burning off into the environment here in the US, gas that we're just burning off into the environment here in the US. Why wouldn't we take that energy and put it to those two allies and say we want to have a long-term trade imbalance adjusted and we're going to do it with LNG, and that solves a lot of the questions about our imports and our exports, doesn't it?
Speaker 2:Well, it certainly adds to exports and reduces overall trade deficits, right, but the crazy thing, one of the crazy things about the Trump administration's tariffs is that he always looks at it on a bilateral basis and not on a multilateral basis. There was this so-called temporary deal with the UK, and the UK has a trade surplus. Us has a trade surplus with the UK, and yet we're still putting 10% tariffs on them. Go figure, right.
Speaker 1:Yeah, I can figure out. It's just you figure out where politically it's popular and then you go for that. Do you think any of these decisions by the Trump administration have not been pulled across their voter base in those states? I mean, everything is now pulled before it is decided, isn't it? I don't think so. I think.
Speaker 2:I think. I think Trump is pulling a lot of this crap out of his brain. Ok, I think that's what's going on. Okay, and he's advised, he's got you know. You know the old imagery of the angel on one shoulder and the devil on the other shoulder. So he's got, he's got on one shoulder, he's got Peter Navarro, and, and then on the other shoulder, he's got Scott Besant. Scott Besant's the angel, scott Besson's the angel, peter Navarro's the devil, and then you've got, you know, the local joker, who is Howard Lutnick. Okay, so running around, and Rubio Rubio is, I think, rubio's with Besant. I agree with that.
Speaker 1:Okay, and Lutnickick, I agree, would go on the double shoulder, but uh, navarro navarro, navarro and letnick and letnick, yeah and um, and so it all.
Speaker 2:You know, like they say, it all depends on, uh on. You know who's whispered in trump's ear last and uh, trump's ear last. And if Navarro is that person, then you know Trump is going to keep doing these crazy things. If it's Scott.
Speaker 1:Besson, he's going to be more reasonable. Okay, from an investment standpoint, if you had a young person who was asking you what to buy in this chaos that is the markets right now and I'd use the term chaos a little bit loosely because it's been all good for the last month after kind of a bad April but let's look at the question about would you invest in US arms Lockheed Martin and Raytheon RTX now, yes or no? Lockheed Martin and Raytheon RTX Now yes or no?
Speaker 2:Yes or no, yes or no we're going to get some yes or no's in there. You can ask me a yes or no. Yeah, sure yeah.
Speaker 1:You think so?
Speaker 2:Yeah, I would, so this is not a short-term investment. This is something you can hold for a while, because this is Well, I would say it's actually more long-term than short-term investment. This is something you can hold for a while because Well, I would say it's actually more long-term than short-term. Okay, because I think there's a lot of volatility in terms of the Trump administration could say okay, we're going to reduce our arms sales and then it's over, right for these companies.
Speaker 1:Well, if they're looking to export, what do you have in the US that we're leaders in? You have technology, you have some arms, you have energy, you have consumer companies, you have media. I'd say that we're probably the leader.
Speaker 2:A lot of it's services and it doesn't even go into the the trade deficit calculation.
Speaker 1:I know that the calculation is wrong and I know that, but but I guess I point to things that people can put their hands on, understanding why I invest in this. Because I see demand coming for years and years for this part of the world who will continue to need the US as a supplier, and that's where I think long-term defense is an area to, is an area to go to. Okay.
Speaker 2:And I think you need to look at. I think you need to look at program companies that have defense companies that have a broader array of programs, so like RTX, which combined Raytheon and United Technologies, I think, is. I mean, I don't want to, I'm not going to recommend a stock on this call, but I think you want something like an. You want something like like an RTX which, something like an RTX which is uh, is more diversified, uh in terms of its uh military product offering. But again, this is a long-term thing. There's going to be a lot of short-term volatility because, depending on what, um, you know, the current uh geopolitical winds are and you know, I wouldn't assume you know these geopolitical winds are, you know, are sort of stable in one direction. I think they can move around.
Speaker 1:I think this is you know. To me, this is one of those areas that is very hard to pick and if you agree it is a longer term, then I think you know. I saw Europe as not moving in this direction, so I was surprised by Mertz and the current European actions companies would be good.
Speaker 2:And also back to my prior point if you're going to pick, I think you would have to do some research into those defense stocks that are less reliant on government financing and are more able to make commercial sales. So I would look at that.
Speaker 1:Sure, I mean, I think that brings us to the Middle East and some other things, especially Taiwan. So let's just try to wrap one more topic into this Ukraine question, because the first thing that Trump did and tried to do or is trying to do with Ukraine was the concept of signing a rare earth agreement to have the US be one of the firms or countries that does most of the rare earth work in the Ukraine, and the rare earth capacity or ability in the Ukraine seems to be a very large reason for the US to be involved. I guess is it really a good move for us to be looking at rare earth from the Ukraine, which is between Europe and Russia, versus looking at rare earths from Canada, which is right across our border and a lot closer in this hemisphere? It feels to me like signing a bill in the Ukraine is like signing a bill in Gaza and saying I want to build condos on the water.
Speaker 1:It's like you're going to have to really deal with a lot of effort to create rare earth industries in the Ukraine, whereas Canada, which has worked hard to produce energy and does a lot in the smelting and aluminum space, would seem like a much more likely partner for us to pair up with. Why are we chasing rare earths in the Ukraine? Is it just a reason for Trump to sign a bill and say, hey, this is another win for the US? Couldn't we find an easier partner?
Speaker 2:So China is not an easy partner when it comes to rare earths.
Speaker 1:Correct. We're looking for a substitute for China Right. My question is wouldn't it just be easier to reach across and talk to Canada about rare earths?
Speaker 2:So here's the thing that we need to understand about rare earths and to go so, so, so here's. Here's the thing that we need to understand about rare earths. I think very few people really grasp, um, or few people, I should say, really grasp. Rare earths are not uncommon. There's a lot of rare earths in the United States, uh, in other countries.
Speaker 2:The reason why China produces a lot of rare earths in the United States, in other countries, the reason why China produces a lot of rare earths, is because they're willing to put in the extremely environmentally unfriendly facilities that are needed in order to produce rare earths, in order to refine them. And Canada, they might be willing to do it because, after all, they're willing to do the tar sands right in alberta, so do the smelting for the aluminum? Yeah, so they might be willing to do it, uh, but it all depends on finding countries, uh, that are, you know, in, you know that are willing to take or absorb some of the environmental damage from you know, from doing, from processing the rare earths, and that the reason why China produces so much rare earths is because they don't really care about the environment too much, or they didn't actually at the time when you know they put in this rare earths processing capacity.
Speaker 1:Is Russia's engagement in the Ukraine not really about history and about something like rare earths and the wheat basket that is the Ukraine in terms of resources for the rest of Russia? Or is it really based on this 6,900-page diatribe that Putin went on about how important Kiev is to the history of Russia?
Speaker 2:Well, it's both. So the Donbass region is really the most resource-intensive or mineral-intensive region of Ukraine. So that's why, in part, why that was a focus and a lot of Russian speakers in the Donbass, so that's why there was a particular focus there and on Crimea, which also has a lot of Russian speakers and at various points has been a part of the. You know, it was part of the Russian SFSR, the Russian part of the Soviet Union, for a long time until Khrushchev gave it to the Ukrainian part of the USSR. But I also think that the whole, you know, question of origins plays a role too, in the sense that long before there was a Moscow, you know, which, by the way, was founded by, or at least in part by, swedes coming down from you know. They were called the Varangians, the Swedes who came down to help found Moscow, long before that there was Kiev, which was the heart of the Eastern Slavs at the time and also of the Eastern Slavs at the time and and also of the Eastern Orthodox church and Keeve split off into three different groups, ethnic groups with somewhat different languages the Russians, the Ukrainians and the Belarusians. And those three constitute, you know, if you look at it from a linguistic standpoint, that's the East Slavic language group, those three countries, those three languages, and they split off into different languages and then ultimately into different countries.
Speaker 2:But essentially, from Putin's standpoint, he wants to control all of the Eastern Slavic region. So he already controls, sort of indirectly, belarus. He wants to control Ukraine, belarus, he wants to control Ukraine, and by doing that he would then control all of the Eastern Slavic domains. Now the question is whether he wants to go even further and control, you know, the Western Slavic domains, which are Poland and Czech and Slovakia, and then, you know, control the Baltics, which obviously are very close and have languages that are much more distantly related, but still kind of related to the Slavic languages.
Speaker 1:Yeah, it's hard for me to see this as that historical reunification that he believes is important. I come down to economics and dollars and cents and it feels to me like Putin wants that area for its resources, and those resources is what Trump is trying to put in some administration of, because then if the US is developing those, those assets, then it would be impossible for it to happen in a conflicted area, like they're still fighting in those areas. They need peace in order for those industries to succeed. In order for those industries to succeed, I think Trump it's not a bad theory, but I'm not sure the application is entirely feasible.
Speaker 1:It's not, I mean do we buy rare earth companies that are gonna start in the Ukraine. Is that the investment thesis for us in 2025?
Speaker 2:Look look, I would draw an analogy to the fact that you had so many, so much Western investment in Siberia, in Sakhalin Island, in Russia, and all of that had to be walked away from by Western energy companies because of sanctions and reputational issues having to do with the Russian invasion. So just because you know, the fact that there was all this Western investment in Russia did not dissuade Putin from invading. He may have thought that the Western have thought that the uh Western energy companies uh would side with him, you know, for commercial reasons, but ultimately they didn't. So I, I I don't think resources, uh, yeah, they play a role, but resources are not determinative of whether you have conflict or not. Okay, that's my perspective on that.
Speaker 1:Yeah, it just feels a little bit like I see what's happening in Gaza, I see what's happening in Taiwan and I see what's happening in the Ukraine, and all three have this underlying. We need to write this for our country and our national history. These areas and territories are important to us, whether we're talking about Taiwan's island or whether we're talking about the religious significance of Jerusalem. There is this historic kind of discussion and I've always thought that history and economics, you know, are kind of. You know, one leads the economics usually, in my mind, lead the history, and it's not usually in people's best interest to go after something because of some historical concept, unless there's an economic benefit. Isn't that usually how, if countries need resources, countries act in aggressive ways to achieve it. It's not like they say hey, I think I want to reunite with Kyiv because historically it's got a lot of significance and we'll just do this as an exercise to right historical wrongs.
Speaker 1:Am I being naive to think economically and I need to go back and read my history books.
Speaker 2:I think you know, from a US perspective perspective, we don't see history the same way that people in other countries do. People in other countries have a much longer uh perspective, uh, on history well, yeah, we're.
Speaker 1:We're a newcomer with only 200 years.
Speaker 2:And Latin America is a newcomer too. I think that we have to understand that Russia takes a very long view on things, and so do other European countries. Our allies in Europe take a very long-term view of things. And some of the Asian countries, you know, despite colonialism, they have much longer histories than that and they take a, they take a long-term view of things. So, yeah, I mean, I think, I think history can be an excuse for the pursuit of of economic ends, suit of economic ends. But you know, history also stands on its own as well, and I think that you know, I think that a lot of people don't you know, don't realize that you know, and then they're sort of conflicting historical narratives as well.
Speaker 1:Right, we just talked about Leif Erikson discovering America long before. They're sort of conflicting historical narratives as well. Right, we just talked about Leif Erikson discovering America long before the pilgrims, right? So I guess I'd like to wrap up today's call with, just you know, one kind of theme, which is do we think there are investment opportunities in the actions of Ukraine and if so, what would, what would you invest in to take advantage of it?
Speaker 2:So so I would look long-term at defense companies that have a more commercial orientation and are not entirely dependent on on us military contracts. So I would take a look at that. Um, you know we talked about rare earths. Uh, you know, I think it's going to be a long time before rare earths are exploited in the Ukraine to any big degree. But I think that rare earths and lithium copper, I think offer a lot of opportunities elsewhere in the world. You know Canada, the Andean countries offer a lot of this as well, australia, but I wouldn't count on Ukraine and I wouldn't count on China.
Speaker 1:I think for this call, and you can write down the state. I'm going to agree with everything you said, so I don't have any. I think there are this call and you can write down the state. I'm going to agree with everything you said, clint, so I don't have any.
Speaker 1:I think there are opportunities in defense and I like to see them be broad based.
Speaker 1:I would probably limit myself to US-based military corporations, because I think there's a lot of politicization of these and I think it's going to be helpful to have companies that are based in the United States, because I think our use of and our demand for weapons is going to continue to grow.
Speaker 1:So I believe that US companies are a good place to play that and I do think it's a longer term trend place to play that and I do think it's a longer term trend. I agree with the investment in raw materials the Rio Tintos, the Newmont those companies to me, are always given the low interest compared to the excitement of AI, but they produce a lot of dividends. They produce a lot of materials that are critical to our overall economic success. So I would agree that although they're boring and although they're basic materials, they're still pretty important materials. I think it's an area that everybody should make part of their portfolio. If you're building a portfolio for the future, you have to think about the building, copper and steel as important elements of every economy and infrastructure. So anything else to add today, clem as we head off.
Speaker 2:No, I think that's it. It was a great conversation, Steve.
Speaker 1:And I'll tell everybody that I think that Clem's taking a trip up to Newfoundland. He may come back a different man. He may start to wear horns a hat with horns on it and he could start to look a lot more Nordic on these calls. So I'm looking forward. I hope you have fun and I think that everybody would love to have your support and continue to call us, continue to text us, continue to let us know which of the podcasts you liked and why, and what we can do to try to deliver and make. Look forward to getting together again soon. We've got some great guests coming up Rich Weiss and Marcus Sturtevant. So thanks everyone, and we appreciate you listening.
