“Of all the weapons in the vast Soviet arsenal, nothing was more profitable than Avtomat Kalashnikova model of 1947, more commonly known as the AK-47 or Kalashnikov. It’s the world’s most popular assault rifle, a weapon all fighters love. An elegantly simple 9 pound amalgamation of forged steel and plywood, it doesn’t break, jam or overheat. It will shoot whether it’s covered in mud or filled with sand.
“It’s so easy, even a child can use it – and they do. The Soviets put the gun on a coin. Mozambique put it on their flag. Since the end of the Cold War, the Kalashnikov has become the Russian people’s greatest export. After that comes vodka, caviar, and suicidal novelists.
“One thing’s for sure – nobody was lining up to buy their cars.”
– Lord of War, 2005
It’ll be a short note today – I’m in the middle of writing up this month’s issue of Zero Hour Alert.
But I’ve a question to ask you before I get back to it.
Would you have invested in Kalashnikov in the 1950s (known back then as Izhmash), if you’d known how successful the AK-47 would be?
There are an estimated 200 million Kalashnikov rifles in existence today. The weapon is used by dozens of standing armies, let alone insurgent groups and criminals, and has become an icon of armed conflict. It’s the Coca-Cola of weaponry, and gained significant cultural recognition in art and film.
As a result, it’s been involved in pretty much every armed conflict since it was revealed to the world in 1956. If you could make such an investment, it would probably be about as far from “ethical investing” as you can get.
It was impossible to invest in Kalashnikov at the time of course – the Soviet Union was vehemently anti-capitalist, and had no stockmarket.
But I ask because I think I’ve found the Kalashnikov’s spiritual successor. Just as the AK was born at the beginning of the first Cold War, a new device has been created just as we go into Cold War II, and by my reckoning it’ll be just as disruptive.
Thankfully, subscribers to Zero Hour Alert need not ask themselves such difficult questions, for there are ways of harnessing the trend without funding the spread of such devices. And small, niche companies that defend against them stand to gain significantly…
Speaking of tiny companies with massive upside potential, my colleague Sam Volkering has found a tiny British stock he reckons is set to boom. But he’s being very guarded about the details, going on about some “compound” out in the British countryside which nobody knows about.
Highly unusual behaviour, and it’s stoked considerable curiosity around the office. He’s going live with his findings on Friday – though he’ll be in touch with more details soon.
All the best,
Editor, Capital & Conflict