Is the war on drugs about to come to an end?

By: ispeculatornew
Date posted: 04.20.2011 (5:00 am) | Write a Comment  (2 Comments)

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Last week, I read the fascinating story of two submarines that have been seized by the US government. They were not owned by China, North Korea or some rogue regime. Rather, the submarines were built up by drug cartels as a better way to smuggle drugs, especially cocaine anywhere in the world, especially in the US obviously. The potential benefits of building up a submarine that can transport several tons of the substance at once are significant and while we do not know how much of this is currently going on, it’s safe to assume that many subs are going back and forth with merchandise. Once in a while, they get caught and that is part of business of course and it’s still a profitable transaction overall. I was a bit surprised to see that these cartels are becoming so high tech and it’s certainly a sign of how difficult it has became for law enforcement agencies to compete with these cartels with seemingly unlimited budgets.

What if there was an even better way?

Last week, I saw a video of a new kind of birds… “Smartbirds”. Just take a look at the video. These birds are “robots” controlled by distance but they look almost exactly like the real thing. It’s amazing and breathtaking in my opinion. The thing is that the possibilities are incredible with such automated tools. In the case we were mentioning… while a bird could not possibly transport as much drugs as a submarine, just think about how difficult it would become for law enforcement. Would it even be worth it trying to figure out the difference between the real and the fake birds in order to shoot them down? It’s not obvious to me yet how such extreme automation will translate into more “legal” businesses but it’s clear that many of these applications will be game changers.

What it means to your portfolio?

Obviously, I’m not saying that you should run to your broker and buy shares of Festo (the company behind this bird). First off, the company is not publicly traded but it’s not clear that this Germany company will come out on top despite clearly being one of the most innovative ones. However, I always think it’s important to try to see the possibilities of specific technologies and how big specific markets could eventually become. I will certainly be looking into these technologies in the coming months and will hopefully find some nice potential purchases.

What are your thoughts on this? Am I crazy to think that with technologies like that, it will become virtually impossible to stop drug transportation? And what other potential usage do you see for such automated items?

My final question…do you know of a listed company that could offer exposure to a similar technology?

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  1. Comment by Ravi Gupta — April 20, 2011 @ 7:20 am

    Unfortunately I do not know of any companies that could offer you exposure to technology like this. Many times technology that revolves around unmanned aircraft can be found at the higher up defence companies like boeing.

    I think that the drug war will never end, atleast not here in the US. Presently there are too many ways to transport drugs but that won’t stop the US from trying to stop them.

    -Ravi Gupta

  2. Comment by IS — April 20, 2011 @ 11:17 am

    @Ravi – I would think that some smaller companies are doing research and then bought out by companies like Boeing, no? But they might be too small to be listed

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