How to Crack "Top-Secret" Profit Plays

As a defense-sector specialist, I spent years investigating advanced technology.

So I can tell you firsthand it's not easy.

Technology companies, government agencies, and Pentagon officials don't just come out and tell you what they're working on.

Most of it is top secret. You'd need security clearance just to get a glimpse of it.

Nevertheless, if you poke around enough... If you ask the right questions and talk to the right people... If you use context clues and read between the lines...

You can at least get an idea of what's going on behind the scenes.

And if you do, you can often profit from off what you find.

Big-time.

That's what I did two years ago, when I wrote this article about drones.

I used information from a variety of Pentagon contracts, Army solicitations, and a recently uncovered program orchestrated by DARPA to isolate not just one but THREE drone plays...

And since then, two of those stocks, Kratos (NASDAQ: KTOS) and AeroVironment (NASDAQ: AVAV), have surged for gains of 100% and 80%, respectively, with the third, QinetiQ (OTC: QNTQY), returning a far more modest 6%.

That's not too shabby.

But I never would have found those plays if it hadn't been for a $40 million DARPA program that created a new class of drones (called "Gremlins") that could be deployed from the belly of a plane.

That's what got me started.

Then I replicated that success twice more, finding additional stock recommendations by studying other DARPA programs that involved lasers and hypersonics.

I'm not the first investor to follow DARPA's work down the path to riches, either.

The truth is, a multitude of investors have made great fortunes by catching onto government programs right before they go public.

For instance, thermal imagery began in the 1950s and 1960s as a program to give our military enhanced night vision - a priceless battlefield advantage.

The companies at the center of this development, Honeywell and Texas Instruments, were only microcap contractors.

Now they're Fortune 500 household names.

The Pentagon's internal government network, ARPANET, eventually became the internet, paving the way for companies like Google and Apple.

A DARPA program called Sketchpad created the first recognizable PC with a word processor, a printer, file folders, title bars, scroll bars, and drop-down menus.

GPS, virtual reality, cloud computing... All of these technologies stemmed from DARPA too.

In fact, MIT professor Michael Dertouzos credits DARPA with "between a third and a half of all the major innovations in computer science and technology."

And that includes the most important technology of all: the microchip.

Silicon Valley really ran with that one.

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But what's interesting is that they've recently hit something of a wall.

You see, for decades, the number of transistors on a microprocessor doubled every two years under a truism known as Moore's law.

This is what allowed computers to shrink from room-sized mainframes to slender notebooks you can take on a plane.

But in the last few years, Moore's law hasn't held up...

You can see in this chart that processor performance has effectively flat-lined since 2016. Heck, even going back to 2006, there hasn't been anywhere near the kinds of improvements we saw throughout the '90s.

I guess at some point transistors and microprocessors can only be so small.

But are we just going to accept that? Are scientists just going to throw up their hands and walk away?

"We've done enough, boys! Time to pack it up and head home."

No! Of course not.

We're going to leave it to the big brains and lab coats and DARPA to find a new path forward.

And that's just what they're doing.

Indeed, the Department of Defense has tasked DARPA with a massive new $1.5 billion project called the Electronics Resurgence Initiative.

And with this new project, we once again have a chance ride DARPA's advanced technology to massive stock gains.

That's because, as in the past, DARPA isn't acting alone. It has a partner, a small company hardly anyone has heard of.

That's right. This isn't some Silicon Valley bigwig. In fact, it's a total outsider that could leave the mecca of microchips far behind.

Because its technology is so advanced, so innovative, and so powerful that it's already being called the "God Chip."

And investors who get in early could reap huge rewards.

I'm not talking about those meager returns of 90% or 100% I mentioned earlier, either.

I'm talking about the potential for life-changing, fortune-making returns of more than 12,000%.

So if you want to find out more about how this tiny player is poised to overcome the greatest technological hurdle of the century, check out our full report here.

Fight on,

Jason Simpkins

@OCSimpkins on Twitter

Jason Simpkins is Assistant Managing Editor of the Outsider Club and Investment Director of The Wealth Warrior, a financial advisory focused on security companies and defense contractors. For more on Jason, check out his editor's page.

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