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Dave Gilbert here, editor of smart money.
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The first major battle of the Civil War is sometimes called the “Picnic Battle” because the people packed their sandwiches and binoculars and followed the Union Army out of Washington to observe what they assumed to be an easy victory over the Confederates.
For us, it is difficult to understand the idea of civilians setting up chairs in a war zone, rather than getting as far away from it as possible.
But today, a new type of warfare pervades every aspect of civilian life, and there is nowhere to run. We have all unwittingly, and often unknowingly, become “soldiers” in a new kind of combat: cyber warfare.
This new technological threat is also an investment opportunity. Let’s dig a little deeper into the story…
The next phase
When smart investors talk about creating wealth in technologies that are transforming our world, we naturally think of the interesting things that affect our daily lives – how we communicate, do our jobs, travel, entertain ourselves, live healthier lives.
We don’t think about war. Not until recently, anyway.
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Guns and artillery are still the primary weapons of warfare, but in modern times armaments now include guided missiles, satellites, drones and more, all made possible or improved by technological progress. .
The next phase in the evolution of warfare tactics seems to be using the technology that underpins so many modern lives to do harm. President Biden on Tuesday warned of possible attacks on critical infrastructure and American businesses, and he urged business leaders to step up their cyber defenses.
Here’s something else only possible in the digital age: citizens from other parts of the world are joining the battle – remotely. Shortly after Russia invaded Ukraine in February, a hacking group called Anonymous declared a “cyber war” against Russia.
The group of “hacktivists” has previously claimed responsibility for shutting down Russian websites, leaking data, hacking TV and video security feeds, and more.
Russia’s Digital Development Ministry said it was “recording unprecedented attacks on the websites of government authorities”.
We all know that cyberattacks are nothing new; some sources identify the first as almost 200 years ago! In the 1830s, two guys hacked into the French telegraph system and stole market information.
Today we learned about DDOS (denial of service) attacks that take down popular websites and high profile data breaches in which personal and financial information is stolen.
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As you probably remember, hackers managed to close the Colonial Pipeline last year, the largest fuel pipeline in the United States. Colonial eventually paid $5 million in “ransom” to put it back into service.
An ounce of prevention
Eric Fry said integrated security is becoming an absolute necessity for businesses of almost any size, especially with the booming work-from-home trend. He likened the transition to how banks have improved their security over the years:
“In the ‘old days’, most neighborhood banks operated with doors wide open and no security of any kind.
“Although bank robberies were a legitimate threat, they happened so rarely that very few banks bothered with expensive security measures like hiring armed guards.
“But as thefts increased over time, so did the imperative to enhance security in various ways. That’s why most neighborhood banks use basic security protocols like installing cameras and keeping as little cash as necessary outside of the safe.
“Now imagine that local banks begin to face both more intense and more frequent threats.
“Let’s imagine would-be thieves trying to break through the bank’s defenses every day – breaking through the door with armed robots and drones, tunneling under the safe, hacking into the money transfer systems , posing as Brink security personnel, or all at once.
“Suddenly your local savings and loan is no longer that folksy place where you sit down with a pleasant teller to decide whether your personal checks should contain pictures of puppies or cats.
“It is now a fortress.
“And the more companies and individuals migrate their technological lives to the cloud, the more imperative it is to secure the data and applications that reside there.
“According to ResearchAndMarkets, the global cloud security market is expected to grow from $34.5 billion in 2020 to $68.5 billion in 2025, at a compound annual growth rate (CAGR) of 14.7%” .
These estimates predate the war in Ukraine, and now it looks like the growth of cybersecurity may be accelerating as governments and businesses focus more on cyber risks.
Some of the biggest cybersecurity companies in the market include firewall maker Palo Alto Networks (NASDAQ:PANW) with its market valuation of $60 billion, as well as software publishers Fortinet (NASDAQ:FTNT) to $52 billion and CrowdStrike (NASDAQ:CRWD) to $50 billion.
There are also a few exchange-traded funds: First Trust Nasdaq CEA Cybersecurity ETF (NASDAQ:CIBR), ETFMG Prime Cyber Security ETF (NYSEARC:TO HACK), and Global X Cybersecurity ETF (NASDAQ:BUG).
Eric’s most direct cybersecurity recommendation is smaller than these companies and is a Content Delivery Network (CDN). He likens CDNs to “data minimarts” that operate closer to end users than the massive web hosting warehouses called “data centers.” The CDN he recommends carries around 30% of global internet traffic and says it is also becoming one of the world’s leading cloud security companies.
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Benjamin Franklin said, “An ounce of prevention is better than cure. He was talking about preventing fires, urging his fellow Philadelphians to be careful about how they dispose of hot coals, holding chimney sweeps accountable and assembling a group of men to fight fires whenever they broke out. The result was the first volunteer fire company.
The same goes for cyberattacks, as businesses and governments around the world now seek to prevent attacks rather than recover from them. It takes time and costs money, and just like our hero firefighters, you hope you don’t need them, but you’re glad they’re there when you do.
Publisher, Smart Money
PS Last week, Louis Navellier and Eric Fry hosted the Tech Crisis 2022 Event. And they just published brand new stock recommendation which could see its share price rise rapidly over the next few weeks. Moreover, by watch a replay of the eventyou can learn the names of two additional FREE stock recommendations. Details here.
As of the date of publication, Dave Gilbert had (neither directly nor indirectly) any position in the securities mentioned in this article.
Eric Fry is an award-winning stock picker with many 10-bagger calls – in good AND bad markets. How? ‘Or’ What? By finding powerful global megatrends…before they take off. In fact, Eric has recommended 41 different scholarship winners over 1000% over his career. Additionally, he beat 650 of the world’s most famous investors (including Bill Ackman and David Einhorn) in a competition. And today, he’s revealing his next potential 1000% winner for free, right here.
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