PodcastAdam Taggart | Thoughtful Money®Peter Tchir

Is National Security The New Winning Investing Trend? | Peter Tchir

National‑security imperatives are driving a broad onshoring trend—spanning semiconductors, critical minerals, power generation and defense components—that reshapes supply chains, procurement horizons and industrial siting. Geopolitical frictions (retained tariffs, European tech decoupling, Iran tail risks and shipping-route diversification) complicate investment timing and emphasize resilience, benefiting firms exposed to domestic capacity and infrastructure. The guest expects a rapid defense industrial buildout around drones and missiles, higher-for-longer oil dynamics and stable 10‑year Treasury yields (~4.3–4.5%), and recommends tactical positions in private credit, niche security names and energy-related plays.

National SecuritySupply ChainsEnergy MarketsGeopolitical RiskBase MetalsTrade Policy

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Key Takeaways

U.S. trade policy shows continuity: the Biden administration has kept many Trump-era tariffs and added new categories (e.g., solar), while CHIPS Act funding and bipartisan critical-minerals initiatives are jointly driving a policy-led tech onshoring push that will reshape supply chains and domestic manufacturing demand.

National-security onshoring is broadening beyond chips to electricity generation, critical-minerals processing, and defense components—DoD tiering of minerals (nickel, cobalt) plus large private capital commitments are creating sustained demand and input volatility for firms tied to security manufacturing.

Tactics and procurement are shifting: drone warfare is evolving into layered, AI-coordinated swarm systems while the guest forecasts a rapid, global ramp-up in drone production and missile defenses, creating urgent manufacturing and doctrinal bottlenecks for suppliers and militaries.

Oil dynamics are mixed short-to-longer term—front-month WTI has eased toward/below ~$90, but longer-dated contracts remain elevated and a structural tilt toward 'safer' producers implies higher-for-longer pricing that benefits U.S. producers, with Jones Act frictions adding a domestic-shipping wildcard.

Corporations are moving from just-in-time to just-in-case procurement—many government contracts now extend 7+ years and companies are accepting lower margins for resilience—supporting the guest's preference for private credit (BDCs) and niche alternative-asset ETFs given a base case 10-year Treasury trading around 4.3–4.5%.

GEO-POLITICS

Tariff Continuity — The Biden administration retained many Trump-era tariffs and added new categories (notably solar panels), signaling continuity in protectionist trade policy intended to support domestic manufacturing in targeted industries.

“Biden did not take any of them off. In fact, he added some including the solar panels.”—

TECHNOLOGY

Onshoring Push — Policy-driven onshoring—backed by the CHIPS Act, bipartisan critical-minerals measures, and large private capital— is driving growth in domestic chip manufacturing, minerals processing and related infrastructure, creating sustained demand and input volatility for national-security suppliers.

“When I look at the production for security one of my top picks has been Intel right because again I think we want to make sure people understand that this…”—

European Decoupling — European governments are encouraging procurement from local vendors and investing in AI/data-center capacity (e.g., moving agencies off Microsoft), signaling a policy-driven tech decoupling that should benefit regional vendors and infrastructure suppliers.

“People will still do business. People will still do a lot of business, but you're seeing the French government, for example, I think it's Vizio or something like that…”—

ECONOMY

Security Onshoring — Production-for-national-security is being interpreted broadly to include electricity generation and other infrastructure—benefiting power producers, nuclear/uranium plays and onshore defense component manufacturers while the DoD tiers critical minerals (e.g., nickel, cobalt) that are currently China‑sourced.

“We want to make sure people understand that this is very broad, right? This is production for national security on a really holistic basis. It's not about just defense…”—

Shipping Resilience — U.S. trade measures are being used as leverage against China as firms diversify shipping lanes after shocks (Ever Given, Red Sea, COVID); Panama Canal focus, Mexico's alternate-route plans and Jones Act frictions (temporary exemptions) make trade-route diversification a strategic priority.

“You could look at those, especially the way in which they were rolled out so quickly to everybody around the world as a way to kind of push as many…”—

Iran Leverage — U.S. actions around Iran have constrained certain oil flows and are being used as economic leverage; a credible deal would require removal/inspection of enriched material, but absent safeguards the region may see defensive buildups and reduced FDI (e.g., weaker Dubai investment).

“You then look at what we're doing in Iran and you know we've sort of essentially cut off the supply of oil to China that was going through the straight.”—

FORECASTS

Pharma Reshoring — The national‑security reshoring push hasn't yet materially affected biotech and pharma; the guest expects meaningful onshoring initiatives in these complex sectors to emerge in roughly six months to two years due to procurement and production complexity.

“You're seeing that blossom. I think we have not yet seen it hit biotech and pharma. I think that's probably 6 months to a year away cuz it's more complex…”—

Oil Outlook — Front-month WTI has eased toward or below ~$90, but longer-dated contracts remain elevated; rebuilding Middle East production will take time, and a structural shift toward 'safer' producers implies higher-for-longer pricing that benefits U.S. producers while Jones Act changes add a domestic‑shipping wildcard.

“The one thing I think the market is really starting to look at though is yes the front end of oil is coming down…”—

Critical Minerals — Clustered opportunities exist in processing/refining rare earths and critical minerals, grid and electricity infrastructure, and redeveloping inland industrial sites, but foreign competitors (e.g., Venezuela) may scale faster while permitting and zoning can materially delay U.S. projects.

“I think the real surprise is going to be a rare earth and critical minerals surge there where not only can we get the rarest and critical minerals there, but…”—

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Important Disclaimers

Not Investment Advice: For education only — not financial, tax or legal advice.

AI-Generated: Made by AI from source transcripts and may contain errors.

No Guarantees: Past performance does not predict future results; investing carries risk.

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