Blain’s Morning Porridge, October 1st, 2026
“No one ever won a war by dying for his country. He won it by making the other dumb fellow die for his country.”
Defence has become the hot new sector, but investors need to understand the geopolitical reality, military requirements, the need for adaptation, and how the battlespace is changing. Defence needs to connect capital to warfighting capabilities that can be deployed now, adapted swiftly, and manufactured in unprecedented volume. The most effective way for the West to win is to demonstrate the will and ability to do so – which is the most likely way to deter our enemies from attacking.
Key Takeways
· The goal of defence spending is deterrence. Wars are economic disasters. But if you need to fight – fight fast and effectively.
· Defence investment was a backwater for decades, requiring an understanding of how cost-plus margins translated into stock market value. Today defence valuations are based on a swift evolving battlespace, the capacity to deliver good-enough but effective and adaptable munitions, sensors, coms and connectivity in volume now! Defence investment has utterly changed.
· Ukraine has demonstrated the need for continuous adaptation as combat swiftly evolves. Testing, deploying and improving weapons faster than the enemy is critical.
· Conflict risks have risen because the global economy is changing, and the current hegemonic struggle between the US and China is key.
· National Resilience is as much part of defence as new weapons – and is highly vulnerable to disinformation and sabotage.
· Defence should not be measured in terms of GDP, but in terms of combat effectiveness and resilience.
· Spending on defence needs to plan for the long-term, and support sufficient forces and to anticipate how swiftly war stocks will be depleted. The current US shortages of sophisticated munitions highlight how a capability gap on side opens opportunities for the other side.
