The internet’s beginnings in defense sector and how internet security may be the next big thing…

I remember very clearly in the mid eighties working in an office where our computer tech person working on a data base program for us told me about the World Wide Web and how it was going to change the world.

That was the voice of opportunity speaking to me, but it was not something I really understood how significant it was until years later.

The internet- the web has and will impact human history on a monumental scale in terms of how we have become dependent on it as a research resource, global affordable information and communication tool, community and social and entertainment tool and as well as a significant commerce tool. The Internet is a collection of communities that now satisfies basic human community needs.

We talk to “friends” email friends, watch entertainment, buy stuff, sell stuff, exchange personal and business ideas and info, build virtual business, find and read news, research about recent medical breakthroughs….. And so on. It is an integral part of the personal and business experience on a day to day basis.

It has become part of the human evolution and gives pause to an anthropological perspective of human history comparables.
Looking at its beginnings – when in 1969- 1970 four host computers were connected together into the initial ARPANET- created by DARPA / ARPA --Defense / Advanced Research Project Agency- a new department within the Department of Defense. DARPA’s mission and creation was to position and assure the U.S’ lead in technology for military capabilities and to prevent technological surprise from adversaries.
Today’s adversaries are terrorists, and they are very adept at using the world wide web of today to their advantage in their plot to destroy the US


The evolution of the internet and the web from its beginnings and the first email sent in 1971 could be compared to mans first beginnings – how we evolved and developed language, followed by the creation of the information highways ( tribal movement) and commerce and trade, content ( comparable to art and culture) , search technology , peer to peer community ( building of towns ) , globalization ( our new world explorers) , building of bigger and bigger communities such as Myspace , that has become the biggest city on the internet .
So what is next?
Following the path of human history – we will need more and better infrastrucure, there will be more takeovers and acquisitions and wars. War on the internet may evolve into new internet security issues above and beyond viruses and worms.
New vulnerabilities have been found in wireless access.

If the beginnings of the internet were in the US Defense Department –with today’s global eCommerce economy and recent deals with US companies ( Google (GOOG) and YouTube ) in excess of $1 billion Us dollars –the US economy and defense are heavily reliant on its continued growth and security.
I think personally, the next big phase is security on the net and how to protect this virtual world of cities and empires


From an investors perspective it goes back to the Defense and Internet security sector and who will be the technology leaders ?...

Some examples of internet and network security stocks- Computer Associates, CyberGuard, CyberSource, Check Point Software, Computer Sciences, Entrust, Internet Security Systems, Novell, Netscreen Technologies, Rainbow Technologies, RSA Security, SCM Microsystems, Secure Computing, Safenet, SRA, Sybase, Symantec, Transaction Systems Architects, Watchguard Technologies.

for more info as well- check out and do your own research on our current list of stocks in homeland security at
www.homelanddefensestocks.com

Who says bigger is better? The small caps still have Upside? Several small cap fund managers think so...

A small and micro cap fund to look at- GSXAX- the GARTMORE SMALL CAP FUND.Take a look at this chart- for the past six months - http://finance.yahoo.com/q/bc?s=GSXAX&t=6m it peaked in May of this year - fell south for the summer, bottoming out in July and August and has come back to close to May levels recently.
... Similar to what I have seen on my site stats chart over the past six months.

"The fund typically invests at least 80% of assets in equity securities of companies with market capitalizations similar to those of companies in the Russell 2000 Index. Management looks at many factors when considering which securities to purchase for the fund, including measures of earnings momentum, relative value, management action, and price trend. The fund may also invest in equity securities of U.S. companies with larger market capitalizations and in foreign securities. "

The Russel Midcap has outperformed the Dow over the last 14 years - so what does that mean moving forward?
As I said in an earlier Blog, the average small retail investor does not own stock in any company in the Dow- we need to look finding profits in small caps. What looks interesting? Follow the money....

Are Homeland Security Stocks regaining investor favor?

Following 911 and for several years following, our site activity was dominated by Homeland Security Stocks. The sector was created following 911 and presented massive opportunity for new companies entering the space. With sub sectors from biodefense to non lethal to CCTV, we saw stocks in the sector rise significantly, led by sector leader in the small cap group- TASR, the non lethal king.
What we saw in the sector, as it settled, was it was very event driven and could spike immediately follow a terrorism event or threat.
The last two years the sector has matured and now trades with less volatility and more on contracts and revenue.
We saw the retail investor loose interest in the space as energy and commodity stocks took the lead.
Our site rankings for Homeland Security stocks moved from number one ranking to anywhere from 10-25 on our list.
What is interesting is a recent undercurrent of interest that is moving the Homelanddefensestocks.com (HDS) portal up our internal rankings and is now at number 5.
What does this mean? Maybe the cycle is changing and the sector may be regaining new interest from the retail small cap investor.

The first Follow the Money series release is out - following the money trail in renewable energy. I am a firm believer, from a long term perspective, small investors can improve their track record in investing if they research the money flow and see how the smart money is investing theirs.. When government, industry leaders and venture capital is putting in big money - chances are they are not only aware of the trends- but are creating them.
In renewable energy, some of the most successful entrepreneurs and CEO's of our time are betting on clean tech or "greentech " as it’s been labeled.
Read today’s release at :
http://www.investorideas.com/Companies/ViewDocument.asp?ID=4694

Are the retail investors coming back to small caps? And what sectors are hot?

Looking at our site stats gives a fairly accurate picture of the retail investor activity, since we cover most actively traded sectors from oil and gas to mining to renewable energy.
We have seen activity that reflects the following trends recently-

· Site traffic reached a peak in March and April 2006, dropped, tried to regain those numbers in June and then suffered a dramatic downturn through the summer with the upward trend building on a slow, gradual curve starting mid September and increasing the last three weeks. This past week has seen the best traffic since the spring.
· As the large cap market and the Dow are reaching new highs – it is giving small investors some confidence to at least explore the market again and start some due diligence. Lets face it- the average retail investor does not own stock in the Dow
· Based on ,limited feedback we see - Most investors in the small cap space are currently long positions and are waiting to see to the share prices come back before they trade another stock
· What are investors searching for? Here are the top search phrases for inbound search on our site 1. Natural gas stocks- reflecting the recent volatility of lows and rebounds in the sector 2. Water stocks – a trend we have seen consistently building for months as investors realize that long term – investing in water may be bigger than investing in oil 3. saic IPO- something the defense sector has been tracking and anticipating for quite some time ( written about by Our columnist Jim Smith in Defense Market Report) 4. Online gaming stocks- reflecting the interest in the outcome of recent regulations and legislation impacting legal online gaming 5. Solar energy stocks – reflecting that renewable energy investors are still very much alive and active looking at the long term money flow and necessity of the technologies in the sector as oil is volatile 6. energy stocks – always on the mind of investors as it impacts the economy, the market and their portfolios if invested


So we do find that our site gives us a microcosm of the mind and trends of the small cap market based on what is being searched and site traffic in general.
If we chart our site traffic- we are on an upward gradual trend looking at reaching previous highs in the spring – that bodes well for the retail small cap market

Investorideas.com - New follow the money series - tracking trends in key sectors

With small caps in key sectors seeing a pull back from some of the highs in the spring and first quarter, we thought we would focus more on the long term trends and money flow to determine if the sector showed upside.

In all sectors that have big runs, you see a multitude of small companies enter the space to get in on the investor activity. You see companies change their business direction with an acquisition of a company or technology in a running sector.
For a while the market was flooded with new entries in the renewable energy stocks sector. Everyone had a bio-fuel or solar company.
In spite of the pull back and settling in the stocks, the driving force and money flow for investing in renewable energy remains strong

Our first Follow the Money series will take a look at what the long term prospects for renewable energy stocks are- stay tuned for the release shortly!