After the acclaim and gratitude I received for my article on investments for the Zombie Apocalypse, particularly from the Survivalist community, I decided it was time for an article about another type of Armageddon.
Personally, I think some of my friends are a bit alarmist regarding their fear of a pending civil war here in America. Certainly one should view the class warfare in the streets of New York with concern, as well as things like mob robberies in Philadelphia. It's been said that in dangerous times one should be invested in the "Five G's" as a means of protecting oneself from economic and social instability. So whether or not you actually think America is headed for anarchy, the advice is well-taken. Unstable times demand stable investments. Here are some suggestions.
If things get bad in your particular city, and people are throwing Molotov cocktails around, you'll want to have plenty of gasoline. No, not to toss Molotovs back at them, but to fill up your car and get out of town! In that case, what better stock than ExxonMobil (XOM)? No matter how bad the civil war gets, you can bet that a company with $10 billion of cash on hand, oil reserves all over the world, and refining capability will protect its black gold like the heroes in The Road Warrior. People will be clambering for gasoline, and ExxonMobil will have it. Prices will go up, and so will profits.
That's "real estate" to you and me. There's been a great deal of controversy surrounding the true value of the land held by The St. Joe Company (JOE). Hedge fund manager Bruce Berkowitz says the company is substantially undervalued and has taken a massive position in the company. David Einhorn takes the opposite position. Now, in a civil war, St. Joe's land certainly won't be any less valuable than it is today. If violence breaks out to the point where buildings are burned and homes are vandalized, having half a million acres in rural Florida may just turn out to be a good thing.
In a civil war, you can expect the U.S. Dollar to crater. As the dollar falls, gold rises along with most other precious metals. In this case, you will want actual gold bullion. So you want to buy something like SPDR Gold Shares (GLD), the popular ETF, because it holds actual gold bullion. Another option for actual localized purchase of gold bullion is DGSE Companies, Inc. (DGSE). With its recent acquisition via quasi-reverse merger with Southern Bullion Trading (a subsidiary of NTR Metals), you can now go into any one of its Bullion Express stores and buy physical gold.
Here you can go with Sturm, Ruger & Co. (RGR). The company offers single-shot, autoloading, bolt-action, and sporting rifles; over and under shotguns; rim fire autoloading and center fire autoloading pistols; and single-action and double-action revolvers under the Ruger brand name. The company also has $76 million in cash and no debt, so you don’t have to worry about them going bankrupt, and I'm guessing nobody would dare attack its corporate HQ.
You need food to hole up and wait out the civil war. So you'd better buy in bulk. To me, Costco (COST) is synonymous with bulk purchasing. They have everything you'll ever need. The company also sits on $5 billion in net cash. So it'll have plenty of money to hold out on its own. Plus, the food made by Costco's in-house chefs is really delicious.