Well, boys, I reckon this is it - nuclear combat toe to toe with the Roosskies. Now look, boys, I ain't much of a hand at makin' speeches, but I got a pretty fair idea that something doggone important is goin' on back there. And I got a fair idea the kinda personal emotions that some of you fellas may be thinkin'. Heck, I reckon you wouldn't even be human bein's if you didn't have some pretty strong personal feelin's about nuclear combat. I want you to remember one thing, the folks back home is a-countin' on you and by golly, we ain't about to let 'em down. Major Kong,
Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb [quote here] [full film available here at archive.org, highly recommend, definitive American dark comedy on the subject] Hello! We're
sort of taking a break from East Asia-specific this week to talk about a great conversation-starter: Thermonuclear war. As developments in this area have not entirely halted in the past few decades, and yet I suspect most [not all--there's probably like one 80-year-old or something] of the readers of this post were either not alive during the Cold War or were too young to really appreciate most of what was happening during that period, I feel that it's important to cover the topic, especially with "great-power competition" being a new buzzword and the possibility that the NPT and the other arms control and limitation agreements that have been prominent for the past few decades falling apart being very real.
I'm sorry in advance if I occasionally get a bit repetitive but I think I've made a fairly comprehensive post on the subject, and I don't think I've particularly biased it one way or the other [though of course, that's what I would think].
Glossary: Bunker-buster = nuclear warhead designed to destroy hardened sites, like bunkers or missile silos
Nuclear weapon = nuclear bomb = nuclear warhead = weapon that uses an operating principle based on nuclear physics
Thermonuclear weapon = more advanced type of nuclear weapon that uses fusion as its primary energy source rather than fission
Warhead = the part of the weapon that goes boom
Fuze = what sets off the bomb, distinct from fuse, which is an electrical part
Intermediate Range Nuclear Forces Treaty = one of the biggest arms control treaties in recent years, barred the US and USSRussia from having land-based missiles that were nuclear capable with a range from 500km to 5500km]
Ballistic missile = missile that travels in ballistic trajectories, fast, difficult to intercept, accuracy problems and always powered by rockets
Cruise missile = missile that travels in the atmosphere, smaller, difficult to intercept but easier than ballistic missiles--but harder to detect, powered by jet engines and air-breathing and thus slower
SRBM = Short-range ballistic missile [1000km range or less, most less than 300km to comply with MTCR or less than 500km to comply with the former INF Treaty]
MRBM = Medium-range ballistic missile [1000km to 3000km range, common in arsenals outside the US and Russia]
IRBM = Intermediate-range ballistic missile [3000km to 5500km range, common in arsenals outside the US and Russia, previously barred by the INF Treaty
ICBM = Intercontinental ballistic missile [5500km+ range, standard in US and Russian arsenals, China, France, and possibly North Korea operate a handful]
SSBN = "boomer" = ballistic missile submarine, nuclear powered and nuclear armed [no conventionally armed ballistic missile subs exist at present to the best of my knowledge, the only proposal being known a Trident conventional version]
Early warning = the systems used to detect missile launches and track them, could be ground-based radars or satellites
MIRV = Multiple independent reentry vehicles, a way to attach multiple warheads to one missile
SLBM = submarine-launched ballistic missile
Tactical nuke = determined by usage, not yield, tactical nukes are meant to be used in conflicts that do not escalate to an all-out nuclear war
Countervalue = a capability to strike against an opponent's cities and hard targets
Counterforce = a capability to strike against an opponent's hardened missile silos
Gravity bomb = nuke dropped from a plane
Nuclear triad = the full set of nuclear delivery methods: Air-launched cruise missiles/bombs, submarine-launched missiles, and ground-based missiles
SDI = "Star Wars" = strategic defense initiative, the origin of all of America's modern missile defense efforts
ABM = anti-ballistic missile
Nuclear sharing = a system via which nuclear warheads, owned by the US, are located in NATO countries [and in the past non-NATO countries] and can be turned over to their management in wartime
Some particular pieces of hardware to know about:
Trident = the submarine-launched ballistic missile currently used by the US and UK, can carry up to 14 warheads in MIRV configuration [typically 4 under treaty limits], solid-fueled and an ICBM as well as a SLBM
Minuteman-III = the current ground-based nuclear deterrent of the United States, ICBM, also MIRVed to handle 3 warheads, built in the 1960s originally and solid-fueled
Peacekeeper = MX = LGM-118 = the most sophisticated ground-based ICBM fielded by the United States and, possibly, by any power, solid-fueled and carried 12 [limited by treaty to 10] MIRVed warheads. Retired in 2005 due to high cost and arms limitation treaties. Meant to replace Minuteman.
1. The Bomb
The very first nuclear bombs relied on fission, the power of splitting atoms of fissile material to generate vast amounts of energy very quickly in a chain reaction. The general principle here is
critical mass. Once a critical mass of the fissile material is achieved--usually either Uranium-235 or Plutonium-239--it activates a chain reaction which results in a nuclear explosion. These bombs are very simple in operating principle--pretty much anyone could build one if given the requisite materials. The main problem, and the reason we have not yet seen a nuclear warhead DIY, is that the fissile materials are very difficult to get. One must either synthesize plutonium in an atomic pile or use one of the various methods developed to enrich uranium--gaseous diffusion and centrifuges being the major ones. Either one takes a significant amount of time and specialized equipment, at least to produce nuclear weapons in any quantity. However, when you get down to it, any sufficiently motivated group could build one of these--at least if not stopped by another, more motivated group. Even
North Korea could do this.
The next step in evolution was the boosted fission nuke. It represented a nuclear weapon that was more capable, but not radically so. By adding fusion fuel to the nuclear weapon, specifically the fission assembly, you could get a better yield--splitting more of the atoms in the core assembly before it suffered a critical existence failure and got spread out over several square miles. Fission-boosting is also fairly easily done, with the main obstacle being obtaining enough deuterium, lithium, and/or tritium to do the job correctly. These are, to my knowledge, pretty seldom seen; but I would suspect that both Pakistan and North Korea have them.
Thermonuclear weapons are, however, a major leap in capability. Much larger yield warheads can be built, in the multi-megaton range, and miniaturization is also possible, which is very useful for missiles in particular. Thermonuclear weapons rely on adding a fusion "secondary" stage, which is set off by a "primary" fission stage and generates vast quantities of energy. However, thermonuclear weapons are much more difficult to develop than fission-based weapons; largely because they rely on exotic materials and classified physics to operate. The United States itself has had difficulty building new thermonuclear weapons, or refreshing ones in current inventory, because it has lost knowledge of how to build some key materials. Most nuclear powers, however, are believed to or known to possess thermonuclear weapons, the exceptions being Pakistan and North Korea.
2. The Cold War
Nuclear weapons were probably the defining feature of the Cold War, at least once it finally began in earnest in the 1950s. To this day, the Cold War defines the cultural conception of nuclear weapons.
What this is about, though, is more a mechanical than philosophical or sociological discussion, explaining why nukes were, and are, used. Or rather, are planned to be used, because despite hundreds of nuclear tests, nobody has ever used a nuclear weapon in wartime in just over 75 years, since the US dropped a crude plutonium device on the Japanese city of Nagasaki.
The very beginning of nuclear war involved hundreds of strategic bombers--first B-29s, which actually cost more than the Manhattan Project to develop--and then more advanced jet bombers, the most iconic of which and perhaps the most enduring is the B-52 Stratofortress, which the US Air Force expects to remain in service through possibly the end of the century. These were the only viable delivery vehicles, and thus both the US [well, mostly the US] and the Soviet Union rushed to build as many of them as possible, with [unfounded] concerns of a "Bomber Gap" resulting in the construction of thousands of strategic bombers. In the event of war, these bombers would take off from their bases and drop nuclear bombs on enemy positions. For a substantial length in time, the US actually maintained a constant patrol of B-52 bombers with nuclear warheads onboard, which, in the event of a surprise attack, would retaliate against the USSR. It is one of these bombers which Dr Strangelove focuses on--though I should note that only a handful of people actually possessed the ability to launch a nuclear strike, and even then only in contingencies when the president was unavailable, and this persists to this day, excepting submarines--which will be mentioned in a moment.
However, technology marched on, and soon the ballistic missile became the delivery vehicle of choice. Early ballistic missiles were relatively crude, based off of the original V-2 design and whose quality was largely determined by how many Nazis you had stolen at the end of the Second World War. However, technology continued to evolve, and soon ICBMs had enough accuracy to launch countervalue attacks. These attacks targeted cities and aimed to deter an enemy from launching a first strike by ensuring that doing so would destroy the nation of the attacker. This doesn't mean that ballistic missiles were the only delivery method, though. Smaller nuclear weapons were built, designed to be delivered by air. They offered greater accuracy and tactical utility, and lowered the risk of a strategic nuclear exchange breaking out. It was around this time that tactical and strategic nuclear exchanges began to be devised in nuclear theory, with tactical nukes becoming essential to NATO war plans due to the numerical, and sometimes qualitative, inferiority of their conventional forces when faced with Warsaw Pact opponents. Nuclear weapons found their way into practically every kind of format. Nuclear-tipped air-to-air rockets were an early invention, aimed at shooting down massed bomber formations. Nuclear-tipped surface-to-air-missiles soon followed. Nuclear anti-ship missiles, nuclear
artillery, and even "backpack nukes" like the Atomic Demolition Munition all were developed for a variety of purposes. Nuclear depth charges, nuclear torpedoes--if you put explosives in something, chances are someone drew up a plan to put a nuke in it. [as an aside, Cold War
schemes to use nuclear weapons to perform massive construction projects, such as
liquidating the Athabasca Tar Sands or
creating a giant salt lake in Egypt, are one of my favorite Cold War relics]. Nukes were the bread and butter of Cold War strategy in a way that seems hardly conceivable today. This is largely why both the US and USSR had stockpiles of tens of thousands of weapons.
Mutual assured destruction, or MAD as it is commonly known, was also derived during this time, suggesting that the way to prevent nuclear war was by ensuring that any initiation of nuclear combat would lead to certain destruction. The development of SSBNs and SLBMs, which provided a way to ensure survivability of the nuclear arsenal and a sure second strike capability--usually countervalue because of the lower accuracy of SLBMs--seemed to make this set in stone. These would avoid destruction in a first strike by hiding within the ocean, and would then launch based off of orders issued from base--or, in the case of Britain, off of orders written by the Prime Minister and secured in the submarines to be opened in event of war.
Unfortunately, life tends to make things more complicated, and this was and is the case with MAD. The first problem that developed was that of the MIRV, or Multiple Independent Reentry Vehicle. This allowed missiles to carry large numbers of warheads, as many as twelve in the case of the LGM-118 Peacekeeper [probably the most sophisticated ICBM ever developed, the Soviet R-36 threw 10 and Trident D5 14 smaller warheads]. As a result of this fact, combined with increasing accuracy of reentry vehicles [especially, it is thought, on the part of the United States], a counterforce strike that could eliminate an enemy's ground-based nuclear deterrent became possible. MIRVs also place a high value on first-strike because each MIRVed missile can destroy numerous enemy silos but is correspondingly more vulnerable to first-strike as it replaces a dozen independent missiles with a single one. As a result limitations of MIRVed warheads have been a major focus of arms reduction treaties and several attempts have been made to ban usage of the technology altogether. Other problems complicated the situation further, such as anti-ballistic missiles, which potentially could shelter a nation from a weak second-strike. However, this broadly describes most of the key elements of nuclear war, skipping over the vast cultural and political impacts of nuclear weapons for the most part, because that's not really what I'm focused on here.
3. Arms control and non-proliferation
From the moment the US first got its hands on the bomb, it sought to keep it away from everyone else, including a very miffed Britain which had been promised access to the secrets learned from the Manhattan Project as a result of the contributions of its "Tube Alloys" program to the American development of the bomb.
The Atomic Energy Act of 1946, or McMahon Act, has largely set American nuclear policy since its creation. Britain ultimately developed its own nuclear bomb, and the Soviets, in a large part thanks to the involvement of traitorous American nuclear scientists, developed their own bomb as well. By the 1950s, the world was in a frantic race to build the bomb--those who had it, to build more of them, and those who didn't, to get them. Even Sweden ran a nuclear weapons program. France got the bomb, and China did as well--much to the chagrin of the Soviets, who had undergone a dramatic split with the Chinese a few years earlier and whose original research work was invaluable in contributing to the Chinese nuclear program. It must be understood that back in those days building nuclear weapons was much more difficult than it is now, without computers or without even easy resources as to how they functioned. Nowadays, I can learn how to build a nuke off of Wikipedia, and, barring the ten tons of heavy water, hundreds of kilograms of natural uranium, and large quantity of nitric acid required, doing so is a relatively trivial task.
The real shift, however, began around 1970. The first major act in this was the development of the Non-Proliferation Treaty, in which all the nuclear powers promised to work towards the reduction and abolition of nuclear weapons, and in return the majority of non-nuclear powers agreed not to build nukes, and it is upon this foundation that the modern order is built. However, it has hardly proved perfectly successful--only six years later the detonation of the first Indian nuclear weapon occurred, which had been built using Canadian technology that had not been adequately controlled, or, indeed, controlled at all--the reactors Canada sells are, by the way, essentially DIY kits for nuclear weapons. As a result, an increasingly involved control regime began to be built. The IAEA was founded and membership was generally required for the ownership of nuclear reactors. The nuclear powers banded together to ensure that critical components of nuclear programs were not exported, pressured nations in their own blocs into cancelling nuclear programs [as the US did to both South Korea and Taiwan], and, barring some relatively low-profile cheating on the part of China, which has sold peripheral equipment to North Korea, Pakistan, and Iran, this vast patchwork mostly held together. As a result, instead of a predicted 30-40 nuclear weapons states, there are only 9 today.
Also around this time, both the US and USSR recognized that spending large quantities on building ever-increasing quantities of nuclear weapons without either side gaining any decisive advantage was helping absolutely nobody, and the two states began to agree to various reductions in arms and limitations in weapons development, including the ABM treaty and SALT.
4. Anti-ballistic missiles and Star Wars
Eventually, starting in around the 1970s, people got the idea that maybe you could stop ICBMs. This sounds absolutely ludicrous--but it wasn't, per se, impossible, and it led to a lot of really advanced, science-fiction sounding technology.
The very first method was to launch interceptor rockets that carried H-bombs of their own, aiming to detonate them close enough to the missiles that they would either destroy the reentry vehicles, their electronics, or cause a non-critical "fissile" of the warhead. This was halted, however, by the 1972
Anti-Ballistic Missile Treaty, one of the first big arms limitations agreements, and also by a simple fact: Ground-based missile interceptors are generally much more expensive than building additional missiles--for instance, the US Ground-Based Midcourse Defense costs more to produce, missile for missile, than a LGM-118 with 12 warheads. This treaty actually held for its full term, despite what you may have expected, as it did not limit research, only the actual building of anti-ballistic missile systems, and actually, IIRC, excluded space-based defenses via omission. However, until Ronald Reagan came along, the idea of ABMs was largely cast to the wayside.
Reagan, however, revived the idea quite famously in his Strategic Defense Initiative, dubbed "Star Wars" by many. It explored a number of ideas, many of which were quite outlandish--one of the more successful proposals, at least in terms of how much funding or attention was devoted to it, involved setting off nuclear warheads in space to power x-ray lasers to shoot down enemy missiles, which if nothing else sounded really cool. By far the most practical program to emerge out of this, however [a rather relative merit], was called "Brilliant Pebbles". It relied on a constellation of tens of thousands of kinetic interceptors, small, only a few kilograms each, which would target and destroy any ballistic missiles in low orbit. This plan was supposed to solve the issue where interceptors were more expensive than missiles, and allow the US unquestioned missile superiority.
It was also around this time when surface-to-air missile systems, originally designed with the mission to shoot down aircraft, began gaining limited anti-ballistic missile capabilities, which were... somewhat underwhelming in the Gulf War, though the technology was brand new at the time.
5. Peace dividend
When the Cold War finally ended, one of the parts of the peace dividend that probably made more sense than most was the vast savings made on nuclear weapons. The trend had already begun in the late Cold War, but once the Berlin Wall fell and the Soviet Union collapsed, stockpiles fell from tens of thousands of warheads to just a few thousand on the part of the US and Russia. All sides had a vested interest in arms reduction, and so those thousands of warheads were disassembled and largely turned into fuel for nuclear reactors.
Ballistic missile defenses also got cut. The original Brilliant Pebbles scheme was cancelled and replaced with a less-expensive but substantially less effective program called the Ground-Based Midcourse Defense, which relies on a relative handful of interceptor missiles in Alaska to shoot down ballistic missiles in the midcourse stage; primarily designed with China or North Korea in mind [oddly enough the first ballistic missile defense program of the US was also designed with the intent of stopping a Chinese nuclear attack]. Ironically Ground-Based Midcourse Defense ended up costing a large portion [more than half] of what the final Brilliant Pebbles implementations were proposed at, for a system with very limited capabilities [this cancellation may have also been part of what killed the DC-X spacecraft].
Vast fleets of SSBNs were disassembled. Expensive delivery platforms and programs, like the MX Peacekeeper, were scrapped. All in all, the threat of nuclear war practically vanished, excepting on the subcontinent, where India and Pakistan engaged in nuclear showboating multiple times. It's really hard to understate the sheer magnitude of what happened, with the number of warheads in existence shrinking from around 70,000 to 10,000 or so, with around half of those today being inactive. The US Navy went from stocking multiple warheads on each ship to removing them entirely from the fleet, aside from, of course, the SSBNs.
The successor states of the USSR, aside from Russia itself, were successfully convinced to hand over their nuclear weapons in exchange for security guarantees--Ukraine most infamously--and their fissile materials were turned into [relatively] harmless nuclear fuel. South Africa became the first nation with an independently developed nuclear arsenal to voluntarily denuclearize, admittedly largely out of fear of what the black population might do with the bomb.
Other areas saw major reductions and non--proliferation efforts. The Nunn-Lugar Cooperative Threat Reduction Program decommissioned large quantities of nuclear delivery vehicles and Soviet biological and chemical weapons sites. The Missile Technology Control Regime expanded and enveloped most nations with the capability to develop ballistic missiles and long-range cruise missiles, making nuclear weapons delivery difficult for the aspiring third world dictator--for instance, an Iraqi program to develop a ballistic missile in partnership with Argentina was scrapped by American pressure and Argentine admittance into the MTCR. While India and Pakistan still harassed each other, their open non-nuclear conventional war assuaged some concerns while raising others [perhaps nuclear powers could engage in conventional war after all]. Nuclear programs in several countries were stopped by diplomatic pressure, as in Libya, rather than by Israeli bombing campaigns.
For a time, all was peaceful. In the last decade or so, however, things have changed--and for the most part, they have done so below the radar of even Washington policymakers.
6. A Return To The Old Days?
Things in the past decade or so, however, have changed the nuclear situation substantially.
First on the list is that North Korea now has nuclear weapons and, it seems, a deterrent. This has seriously tested the efficacy of non-proliferation already, with the merit of non-proliferation when North Korea and Pakistan have weapons being rather suspect. Iran is also building nukes. North Korea's case was, and is, dangerous in particular because it suggests that, barring strong support from a great power, nukes are the only way to maintain autonomy [Ukraine and Libya both offering examples of why surrendering nukes, or even a nuclear program, is a bad idea to the world], and that they aren't too difficult to get. North Korea also may well already be engaging in proliferation activities as a revenue source--it's already known that they sell ballistic missile delivery vehicles and have exported materials related to chemical weapons production in the past, so exporting nuclear technology is hardly a stretch, especially given that North Korea is not seriously threatened by these activities and they provide a useful revenue source for the regime. As a result, the non-proliferation circle built over decades by the various great powers now has a rather large North Korea-shaped hole in it. This, however, isn't leading to big changes in Russia, China, and the United States. Rather, technological advancements, largely by the US and China, are slowly nibbling away at the tenuous nuclear peace.
Second is the problem, for Russia, created by the new Trident super-fuze. Under cover of a "refurbishment" of the Trident warhead family, a new fuze was introduced. However, this fuze is no mere one-for-one replacement: Instead, it allows the warhead to detonate within a range of zones that could destroy the target, allowing warheads that would previously overfly the target and miss to instead detonate in an airbust directly above said target. In effect, it increased the power of Trident by as many as five times, and has made it into a counterforce or first strike weapon. Quoted figures are a .86 probability of kill for a 10kpsi target, about as hard as defensive structures get, and .99 probability of kill for a standard, 2kpsi hardened target. As most of Russia's missile silos are only secure to the point of the latter, and Russia uses liquid-fueled ICBMs for the most part that are much more sensitive to attack than Western or Chinese solid-fueled ones, what this means is that Trident is now capable of wiping out Russia's entire ground-based strategic deterrent at extremely short notice. This has, it seems, quite possibly frightened Russian leadership, and is the likely reason why they have been desperately trying to devise new outlandish delivery vehicles, like an unmanned nuclear torpedo or a nuclear-powered cruise missile. This is further complicated by the fact that Russia has more or less completely lost its space-based ballistic missile warning network and does not seem to have the capability to replace it, which means that Russia must rely on land-based early warning radars to inform it of a nuclear strike. As a result, Russia will have as little as ten minutes of warning for an incoming nuclear attack, and will have essentially no idea what it will look like or what scale it is on. When Russian sources say they'll treat any ballistic missile strike as a nuclear attack, they probably aren't lying, because their sensor network is so bad they can't tell whether a
sounding rocket is a nuclear first strike, and their survivability is so bad they can't afford to not launch.
There's also the interesting problem presented by the development of a new low-yield Trident warhead. While it might possibly have some use, many believe that low-yield nuclear weapons are dangerous because they blur the line between conventional and tactical nuclear war, and the use of Trident as a delivery vehicle runs a substantial risk on account of the fact that it may be difficult for an adversary [such as Russia] to discern that the vehicle is a tactical nuclear strike rather than the beginning of a strategic exchange. These same very concerns scuppered a conventional variant of Trident proposed for the Prompt Global Strike program, which would have used Trident to launch large conventional payloads, a bad idea for multiple reasons.
Arms agreements that defined the 1990s and 2000s have also begun to fall apart. The cancellation of the Intermediate-Range Nuclear Forces Treaty was just the latest in what has been a slowly escalating trend since the 2002 expiration of the anti-ballistic missile treaty. The Plutonium Management and Disposition Agreement, for instance, which required the US and Russia to convert their stockpiles of plutonium into MOX reactor fuel, is also dead,
ostensibly for financial reasons on the part of the US, but quite possibly to allow the US to retain its 80+ tons of plutonium in a diluted form so it can be easily converted back into warheads [keep in mind only a few kilograms of plutonium is needed for a warhead so we're talking about thousands of devices in the several hundred kiloton range].
Why this is happening is an interesting question, and it seems that both the US and Russia [but, to be honest, mostly the US] are involved in the end of these arms restriction treaties. The first problem, and most obvious, is China. China has a general policy of not engaging in arms-limitation treaties, viewing them as a way for dominant powers to retain their position, and has a nuclear arms reduction policy that amounts to "get rid of all of your nukes and then we'll talk". With China becoming an increasingly significant threat to the United States, the arms controls placed on it by agreement with Russia have become problematic for American strategic planners. In particular, the limitation on intermediate-range forces was seen as a major difficulty given the increasingly capable conventionally armed intermediate range ballistic and cruise missiles that are one of the edges the PLAN holds; and, I
suspect [but cannot prove] that planners within the US government view tactical nuclear war with China as a very real thing they should plan for, with the US using nukes first to gain a decisive tactical advantage and not escalating to a strategic exchange--this is enabled by the fact that China has essentially no tactical nuclear weapons, seems to believe it can avoid nuclear war with the United States [or possibly not--I've heard both], and a very small strategic stockpile of which only around 50 missiles can hit the continental US. Russia, on the other hand, has a rather different problem. Its conventional forces in Europe are inferior in quality and quantity to what NATO can field, so it has to plan to make up the difference with nuclear weapons. Furthermore, the increasing sophistication of American capabilities in ways which Russia simply cannot match means that the survivability of the Russian nuclear force is beginning to be called into question, and thus a larger arsenal is required to ensure that a strategic deterrent can be maintained as it has traditionally. As a result, both parties are abandoning arms treaties with, well, reckless abandon.
Finally, the development of increasingly capable ballistic missile defenses, especially by the United States--which now holds pretty much all the cards in the event of nuclear war--means that nations will be required to develop either new and more sophisticated delivery vehicles, or, alternatively, produce more warheads, to ensure that they can maintain deterrence. These include the SM-3 anti-ballistic missile, which can intercept ballistic missiles in the midcourse stage, though only shorter ranged ones and not full ICBMs at the moment, and which is being deployed by the US not only aboard its numerous destroyer fleet but also in "AEGIS Ashore" sites in Eastern Europe [which also caused concern by Russia because these units could easily fire ground-launched cruise missiles that were banned under the Intermediate-Range Nuclear Forces Treaty], and were to be deployed in Japan before local opposition halted construction. The US also designed THAAD, or Terminal High Altitude Area Defense, which provides an interceptor to destroy even ICBMs in the terminal stage, and has made significant improvements to the Patriot missile system which enhance its ABM capabilities. The US has also discussed reviving technologies from previously abandoned schemes such as the YAL-1, a 747 that aimed to shoot down ballistic missiles with lasers at a range of hundreds of kilometers [though it was suggested the new implementation be on a stealth drone] and even considered further research into space-based interceptors--which seem far more feasible in a day and age when private companies are already putting up constellations of advanced communications satellites in similar numbers to those proposed for the "Brilliant Pebbles" scheme.
7. Conclusion
As a result of these shifts, the current lull in nuclear war preparations and small nuclear arsenals of today may not last much longer. Indeed, to an extent, the lull has already ended.
Without a doubt Biden will try to negotiate a renewal of New START--he himself has stated his intent to do so multiple times, but the short time window he has in which to renew it [it expires on 5 February 2021, little more than a week after his inauguration] means that whether he will be successful is uncertain. Even if New START is renewed or brought back in a new form I would expect it to be much less restrictive and a de facto abandonment of the arms reduction that has characterized the last thirty years of nuclear policy. I also don't think that New START, even extended, will last past 2026--that's the point when major nuclear modernizations are set to begin to the US arsenal, including the introduction of the Columbia-class SSBN into service and replacement of the 1960s-era Minuteman III ICBM that constitutes the ground-based deterrent.
Both the US and Russia are poised to make major modernizations to their nuclear arsenals and I expect both of their stockpiles to grow barring a renewal of New START as presently constituted. I also expect that the US may well begin preparing to build new facilities for nuclear weapons production, as its old ones have pretty much all closed at this point. Nuclear weapons may also begin to see a return to the naval field, with nuclear-tipped anti-ship missiles and torpedoes possibly seeing revivals--watch for a return to the US's historic nuclear ambiguity policy on whether or not its ships carry nuclear weapons.
New forecasts say that China is poised to double its nuclear arsenal in the next decade, and I suspect these ones will actually turn out, because China knows that their arsenal at present is too small to pose an effective deterrent to tactical nuclear war and may, within a relatively short time, become an ineffective strategic deterrent.
The list of states with nuclear weapons is likely to grow--South Korea is a near sure bet for reasons I have described previously, but I would not be surprised to see more states get the bomb. Iran seems likely to build one unless stopped via force, and they've gotten quite close already. However, more than the number of states which will possess nuclear weapons outright will grow, I predict a major expansion in nations which attempt to reach a nuclear-latent state. The recent burst of smallsat launchers provides a perfect cover for ballistic missile systems to be developed; drone technology and electronics have made cruise missiles easier than ever to design, and nuclear power will be sought after by a large number of states with potentially ulterior motives--once a sufficient stockpile of used fuel is made reprocessing it to extract the plutonium within is
relatively trivial, and I expect more states to push for reprocessing technology and "full control over the nuclear fuel-cycle". As a result, strategic planners may ultimately have to reckon with a world in which most nations [or far more than the 9 current nuclear-armed states] could well develop modest nuclear arsenals within a few months to a few years.
As for what the US should do--well, my opinion is that the US should just embrace the inevitable. During the Cold War, the US saw that France wasn't going to be stopped from building the bomb--so instead they helped the French build their weapons and thus gained the trust and friendship of the entire French strategic community, at least to an extent where their nuclear and even conventional forces were de facto reintegrated into NATO.
That has lessons for today, I think. If something is going to happen one way or another, the US should just embrace it and try to help the process along and gain the trust and friendship of the nation involved, provided such a move is not directly contrary to American interests. For instance, take South Korea. If it becomes clear that South Korea intends to build nuclear weapons, the US would be better off discretely enabling that by amending its Section 123 agreement and clandestinely supporting the program than trying to fight it.
The US should also seriously reconsider whether it should maintain a non-proliferation stance, although I can see strong cases on both sides. Non-proliferation has failed to stop Pakistan or North Korea, and at that point it's really rather questionable whether it works, but for the moment it's the only thing that's holding the Middle East and world as a whole back from a nuclear arms race. If Iran does get the bomb, I doubt that the US will continue to hold onto that position. At that point [or this point] most of the nations the US doesn't want to have the bomb either already have it, cannot be stopped from getting it without war, or just flat out can't build it due to lack of money, will, and resources. It's unlikely that the US will openly support proliferation, especially Congress, but I find it quite probable that the US may well take a "wink-and-a-nudge" approach to the whole issue. A Section 123 Agreement might be amended to allow reprocessing and a solid-fuelled smallsat launcher sold or authorized, but how was the US government to know that the nation was pursuing nuclear weapons?
Furthermore, the US should start preparing as if an all-out nuclear arms race may resume, because it may well do so. Developing a new comprehensive ballistic missile defense strategy is part of this, possibly including Brilliant Pebbles--I'm a strong advocate of at least researching the solution especially given that so many hurdles already have been met by private companies like SpaceX--but also terminal defenses and directed-energy weapons. The US should also begin thoroughly examining the use of nuclear weapons in a modern context and prepare facilities needed for the production of additional warheads, including possibly a lithium-separation site to manufacture additional tritium, as well as reprocessing sites to produce additional plutonium.
[citations in comments due to max character limit]
submitted by It's been a while since I made a big post. Lots of people are still messaging me about the energy sector post, especially for the ENPH tip, so I'm here to show my portfolio. I don't own all companies yet, this is partially hypothetical. I'm holding on to a reasonable cash position for a possible new downturn, but I have starting positions in most companies and will DCA.
I will try to keep it summarized, as I have done quite a lot of analysis on each of them. I'll draw the main picture and give the most important arguments for my choices, but I'm not expanding too much. If you're interested, you can DM me to talk about them more.
Let me start by saying I'm a growth investor. I always look for a combination of growth with a great track record, if possible at a reasonable price. There are exceptions as you will see below, but the main balance stays the same. I'm not a defensive investor, but no aggressive one either. My timeline is 2-5 years at least (due to a possible start of a small business), but I would gladly hold on to these companies 10+ years.
TLDR; For you guys not interested in my portfolio, I've added a short list of interesting smaller cap companies at the end, most of them trading at decent values.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
ADVANCED MICRO DEVICES - $AMD This one is becoming a blue chip, but has more than enough growth potential to live up to those high valuations. Preferred by gamers and beating their biggest competitor in the CPU market hard. While AMD and INTC were close competitors at the beginning of the 21st century, INTC took the lead by a lot. Since 2017, they introduced 7nm CPU's and GPU's and they are closing the gap fast. Not only are their chips more performant, they are also cheaper. Market cap $60B vs $261b.
Those next generation chips lead them to new partnerships, often beating INTC. Microsoft, a long time Intel customer, began using AMD chips in their Surface laptops. Lenovo using AMD for their new servers. Nvidia started using the chips in their AI products. AMD is also used by Apple's high-end laptops, while Intel (used in the budget range) will probably get replaced by Apple chips made in-house. Apart from laptops, AMD has government contracts to deliver supercomputers in 2021/2023 and they are used in both PS and XBOX consoles, to give a few examples.
For the CPU market, AMD is destined to take over, but they're also taking on NVDA for their GPU's. They have been catching up for years and in 2019 they finally made a better performing GPU in the $350-400 price range. There is a possibility to gain GPU market cap since NVDA has been pushing their prices due to the lack of competition. Therefore, with AMD stepping up their game, they need to give up market share or lower their margins.
Financial Assets over liabilities are x1.88. Cash to debt ratio well above industry average, debt to EBITDA well below IA. ROE 17.12% and ROIC 28.06%. Earnings were growing fast before Covid (125% in Q3, 78% in Q4). Yes they're overvalued, but with their future outlook, I would always buy below $49.
Doubts Now that they are done catching up, the question is, will they outperform in the future. To gain more market share of Nvidia, they need to be better, not equally good. AMD also needs to control the heating better, as it is one of their long term problems.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
MASTERCARD - $MA Fintech companies like SQ and PYPL are a great investment. However, a lot of big companies will (and already did) implement online financial services. MA is able to easily work with multiple of those companies and they're using their global presence pretty well, that's why they're my pick for the fintech industry.
They launched Mastercard Accelerate last year, implementing those online paying platforms and letting start-ups take advantage of their global presence to grow and transform very fast. Last year they acquired Ethoca (managing e-commerce fraud) and Vyze (platform to connect merchants with multiple renders, giving them the opportunity to get those financial needs for start-ups). MA is basically helping start-ups to grow faster, which will result in more financial transactions in the future.
Last but not least, they like to focus on expanding to countries where there isn't much competition yet. They are expanding their exposure to Middle East and Africa, working with local networks and e-commerce platforms. They are in a strong position to capitalize those regions in the future and take on market leader Visa even more.
They get compared a lot to Visa, so I'll expand on that subject a bit as well. While V is focussing on performance and speed, MA plays the cyber security card. They are already working on ways to implement cryptocurrency and Mastercard tend to have more growth potential vs stability from market leader Visa. While V is in the lead, MA is more widely used by fintech companies, which shows potential take-over in the future. Next to their credit services, they also own debit service Maestro, which is widely used in Europe.
Financial Returns as high as 150% (ROE) and 60% (ROIC). Very large margins and perfectly stable balance sheet. High EPS growth YoY, 53% and 42% in the last two years. Quick ratio 1.87. V has more assets and even bigger margins, however MA wins in returns and cash. In terms of more growth, I like to focus on those last numbers more.
Doubts It's a blue chip at a $300B market cap. Their growth potential might be limited, although I see them as one of the better picks between blue chips.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
ENPHASE ENERGY - $ENPH I already talked about solar energy in another post, so I'm gonna skip the explanation. As some of you know my choices were ENPH and SEDG, so I'll explain a bit about why I choose ENPH here. Mainly it's because of their financials, so I'll dive that straight away.
Quick ratio - 2.35 vs 1.74
ROE - 142.94% vs 21.51%
ROIC - 85.51% vs 25.81%
Net margin - 25.81% vs 10.28%
However I think SEDG balance sheet is a lot better and safer, ENPH is working on their future more efficient. They are paving the way smoothly with bigger margins and return on investments. Although SEDG might be the better pick right now, ENPH will be the better one in a short while. ENPH is also a bit less overvalued and their PEG ratio is lower, which makes them the better pick to get in right now.
Diving into the products as well, ENPH just has the better and more efficient product. Their micro inverters are more durable (20 vs 12 years) and give the chance to increase or decrease the amount of solar panels easily, depending on your personal situation.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
GALAPAGOS - $GLPG I'm not a big fan of biotech companies, but these guys have my attention. Not because they're working on Covid vaccines, but because of two reasons. First one is them getting back-up from Gilead Sciences. That's the push they needed to start operating worldwide, increasing their potential market cap. Now that they have the cash from GILD, they can keep on buying interesting divisions and increase their growth. While having almost no long term debt, they are set pretty well with about $4 billion extra in cash.
Second, they have multiple medicines in later trial phases, with Filgotinib as their biggest one. They had a setback on those results, but the company is very confident, giving an opportunity to get them at a decent price. I wouldn't be surprised if they partner up with another big pharmaceutical company in the metabolic disease section.
Financial High PE (84 vs 44 average), but PEG ratio is 1.2. Quick ratio 9.28. ROIC 75.91% and ROE 7%. Became profitable this year with 16.25% net margin. 38.7% YoY EPS growth.
Doubts Like all biotech players, there's a lot depending on medicines getting through phase trials and being commercialized. If Filgotinib will fail, their stock will obviously fall. However since they are backed by a big US giant, they can commercialize the product faster and on a bigger global scale if trials succeed. That's what gives them the advantage in comparison to other biotech companies for me.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
WALT DISNEY - $DIS This one has got me doubting a lot. I've taken them off and put them back on my list multiple times, but eventually I decided to keep them at least 2 years to see how they will evolve into streaming.
Biggest advantage they have on their competitors is they basically have a monopoly on kids entertainment. Kids are growing up with electronic devices and content, so they're creating customers at a very young age. That's how Coca Cola used to work. They targeted 14-16 year olds, dumping loads of money into advertising which resulted in life long customers, as people didn't change cola brands often.
Disney+ is a big hit and they won't get so much competition from other streaming services as Netflix and Roku will. They have one of the strongest defined brands out there and they know perfectly how to build and maintain their company. It's also still unclear how sports with public will evolve, but it's certain streaming will become even bigger after Covid. Therefore their money-losing ESPN acquisition could even turn into a moneymaker.
Financial I can't really say great things about their financials. ROE is 12.67%, above 10% is decent. Assets over liabilities are x1.85 and debt to equity is 0.61. You could apply the saying "too big to fail' here, but that's about it. The bad financials are mainly caused by their big investment to streaming of course and they're working on it hard. They doubled their cash position, increasing their quick ratio from 0.75 to 0.89.
Doubts I would say financials are their weak point here. They still have to go through some bad weather this and next year I would say. Them doubling their cash position in Q1 was soothing, as I see it being the biggest issue for the future. It might be better to wait it out and keep an eye on them for next year, but I wanted to take a position already. Not higher than 8% of my portfolio though.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
MICROSOFT - $MSFT They don't really an introduction I guess. 2nd biggest player for cloud services with Azure. Naming Satya Nadella as CEO and making the transition from hardware to software in 2014 were the best decisions they could've made. Acquired the government contract with Pentagon, however there's still uncertainty about it. In short, Amazon is claiming they were about to win the contract, but Trump criticizing the company would've lead to calling off the deal. For me, that's probably the main reason why MSFT didn't fly as high as their fellow cloud competitors yet.
Financial Assets over liabilities x1.67. ROE and ROIC respectively at 43.82% and 28.88%. Quick ratio of 2.88, 0.65 debt to equity and 1.86 cash to debt. Decent financials, great returns. Talking about blue chips, I would say MSFT is still fairly valued with a PEG ratio just below industry average. Also paying a small dividend.
Doubts The Pentagon contract allegations could be pretty negative for the company. They will probably not come back on their decision, cause if they do, MSFT will claim they already made big investments towards them and things will just keep on dragging on. Even without the contract, MSFT should be a 10 year hold while buying on dips.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
INNOVATIVE INDUSTRIAL PROPERTIES - $IIPR Haven't read a lot about them here on Reddit, but they're a very decent investment. Basically, they buy properties from cannabis companies and leases them back to the sellers, giving them the cash they need to grow faster and IIPR keeps the long term advantage of renting out those properties. They need to buy about 6-8 properties a year to keep their growth rate going and they already bought 7 this year. They still have a lot of cash ready to take advantage of the crisis.
Not only are they 20% undervalued right now, they have a lot more growth potential after that and on top of it, they pay close to 5% dividend. I'm not a big fan of betting on the best cannabis company for the future, but IIPR is a great buy to have exposure in that industry. It doesn't happen very often I come across a company that combines growth potential with a high dividend, but IIPR does.
Financial Quick ratio 6.75, cash to debt 2.8 (while REITs have an 0.07 average). Net margins 13% above average. Assets over liabilities x4.88. Annual EPS growing by more than 150% and about 41% in the last quarter before Covid. They just missed Q1 estimates, but it was only an 8% drop from Q4, performing way better than other REITs.
Doubts IIPR has held a lot of new investment rounds, diluting shares. Of course extra capital will result in higher growth and will eventually be positive in the long run. There has been a drop in these last few days due to the announcement of selling 1 million more shares soon. I would look at it as an opportunity to get an even better price on them.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
TELADOC HEALTH - $TDOC It's the only company I don't own yet. I can't force myself to invest more than $140 per share for them, although I really like their business model. A lot of people are skipping doctors visits these days, going straight away to get medicines and counting on the advice of pharmacists. A lot of times, there's more examination needed.
Not only do I see them succeeding in their field, I see them as an essential part of the automation of the pharmacy industry. It's a useful tool in emergencies, giving advice and deciding how serious the condition is, if (fast) medical care is needed. Teladoc will also play a role in insurance and giving the employers a checking tool. 98.9% of their shares are owned by institutions.
Financial In terms of profitability and returns, not great of course. They are estimated to get profitable in 2023. Great balance sheet, assets over liabilities x2.66. Quick ratio 6.14, cash to debt 1.06, debt to equity 0.48.
Doubts It's hard to see if a company is well managed before they are profitable. Their moat isn't very narrow, however I feel being one of the first ones gives you a big advantage in this field.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
DRAFTKINGS - $DKNG Gonna keep this one pretty short, there has been enough posts about Donkey Kong. For me, the most important factor for choosing them in this industry is their fantasy sports section. They are widely popular and that division will only get more interesting while online gambling, and especially in-game betting, gets more and more legalized in the US.
Although they realized major revenue growth in 2019, they almost doubled their earnings loss. Main reason of course having to develop their platform and system. Good thing is, their technology is highly scalable, meaning they margin will grow massively while expanding in to more states and countries. Not many ratios available yet, so that's about the only financial information I own atm.
The only negative I see is their pretty wide moat, so this one should be monitored more closely in the future. But for now, they have the momentum and are one of the most popular choices, great investment.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
RAYTHEON TECHNOLOGIES - $RTX As many of you know, two great companies (UTC and RTN) merged together in April. While United focussed on aircraft engines (Pratt & Whitney), Raytheon manufactured weapons, military and commercial electronics. They always delivered advanced technologies and them gaining multiple government contracts in the last decade is confirmation of their performant products.
Raytheon will continue to grow their leadership in different segments. Because of their diversity, they seem perfectly in place to grow even more into an aerospace & defense giant. Engines, aerostructures, avionics, sensors, cybersecurity and other software solutions are just a few examples of their working fields.
Financial With a PE ratio of 13.58 and PB ratio of 1.41, this is probably the most undervalued stock in my portfolio. Assets over liabilities x1.43. The rest of their financials isn't that great. UTC was carrying a lot of debt, but because of the merger, it will be better balanced as RTN was only carrying $2 billion net debt. If they can decrease their debt and optimize their merger, they are set to be the new number one in defense.
Doubts It's still unclear how the merger will work out financially and logistically. In theory, they should be very well armed (pun intended) to take on LMT as market leader. Their exposure to commercial aircrafts is also a big threat, but it's less of an issue because they can make up with their other practices.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
As you can see, I've tried to get the best blue chips with still some growth potential and stable growth companies together. Since a lot of companies already got mentioned on this forum, I'll include a bonus round of interesting companies I came across during my search for the best companies. I didn't include them in my portfolio mainly because I feel the chance of them succeeding and living up to their future potential is more risky than others. For you looking for higher risk, higher reward, check out these companies below.
- $INMD. They offer minimally-invasive aesthetic medical products for various procedures, such as liposuction with simultaneous skin tightening, body and face contouring. They are actually the only company in my watchlist that scored maximum on my financial checklist. I love to watch their financials. While we're in an overvalued market, INMD has only 18.73 PE and 0.6 PEG. They certainly got hit by Covid, but I would be very surprised if they don't multiply their market share over the next years.
- $SMCI. Based mainly on servers and storage solutions. They are the supplier for cloud computing and AI based companies. They were ranked 18th fastest growing company by Fortune Magazine in 2016, but they still have a long way possible to grow. I see them stagnating a bit for a few years, but they definitely have potential in the long run. Financially very stable, big on cash to make some acquisitions and trading at only 14.84 PE.
- $CDLX. Great business model. They basically turn financial transaction data into valuable information for advertising. They show returns as high as 30:1 for advertising spent. Not only is the online payment industry growing fast, but after Covid companies will need to work their advertising budgets even more efficiently. CDLX has momentum and will increase that market cap massively. That future outlook has a price unfortunately and I feel they're too expensive right now.
- $OLED. They hold patents on ultra high definition OLED screen technology. There's still a large transition going on from LED to OLED screens. They are estimated to increase their manufacturing with 50% by the end of 2021. Unfortunately most of that growth is already priced in right now. It doesn't take away the longer term potential, but it doesn't make it that sexy of a buy right now.
- $OMCL. Omnicell provides pharmacy automation solutions and other tools for healthcare systems. Big on cash, low on debt. They have an interesting business and the automation of healthcare will continue to grow, however they are also trading a bit above value.
- $PCOM. A technology company based on e-commerce and services through loyalty programs. Most of their partners are airlines, which explains their difficulties of getting back up since the drop. At the moment it's unsure how this will work out. There will barely be room for bargains or rewards, however while the industry has to build up again, there's an opportunity to take away long time customers from competitors. Although they have enough cash to weather this crisis, they are depending on the industry. At PE below 10 and having a decent cash position, it's worth a gamble.
- $APPS. Digital Turbine offers a mobile platform mainly for new apps. They have a very high future revenue forecast of 202.2% over the next 3 years. Big on cash and no debt as well. They already acquired Mobile Posse in March, diversifying their platform. Analysts are putting an average price target of $9.88 on them, giving it a 61% potential return.
- $NVMI. They develop and produce process control systems used in the manufacturing of semiconductors, mainly focussing on industrializing X-ray and optical technologies like holographic images. Cash to debt 6.1, debt to equity 0.1, quick ratio 5.75, ROE 12.83% and ROIC 20.26%. Their financials are great. The only thing you could say is they are slightly overvalued, but still a very nice buy in comparison to the overvalued tech industry.
- $INS. Active in the fintech sector, they provide tech solutions and processing services. Very similar financials to NVMI. Big on cash, almost no long term debt, great returns (ROE 29.7% / ROIC 85.95%) and steady growing EPS. They are also slightly overvalued, but should easily get back to $45 range after the crisis is over.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
So, that's about all I have to share. This will also be my last big post a while. Analyzing stocks has been my main occupation for the last three months, but it's time to work on opening up the hotel and bar again. I hope some of you get something out of this. I'm not a professional so always check again for yourself. I'm gonna hold on to these companies for a while now. Will add some extra capital at the beginning of 2021, so you could expect another big post about my newest findings then. For now, I'm gonna take a break from following the market day in day out and enjoy the weather a bit more.
Have a good one!
In conjunction with the official launch of PointsBet’s Illinois sports betting product, the operator also recently announced its partnership with future NFL Hall-of-Famer, Devin Hester. The Chicago Bears and PointsBet, a premier global sportsbook operator, today announced a partnership designating PointsBet as the club’s first sports betting sponsor. Two years after the Supreme Court ruling, sports betting's growth is the U.S. has been substantial, with more than $20 billion wagered at legal sportsbooks. Of these, theChive is a particularly intriguing partnership that shows BetMGM’s desire to connect with up-and-coming young bettors. Together, BetMGM and theChive launched Chive Bets. Through the integrated partnership, theChive viewers and readers (sometimes called Chivers) now have access to sports betting odds and custom promotions. The list of partnerships between sports betting brands and US professional sports teams gets longer every week. It’s probably not a stretch to predict that every team in the NFL, NBA, NHL and MLB will operate with one or more sports betting partnerships at some point.. The dawning of the 2020 football season yielded several new agreements, as sports betting brands look to get an advertising ...
Enjoy the videos and music you love, upload original content, and share it all with friends, family, and the world on YouTube. TAKE 21 Segment Producer: Jenelle Wilson Reporter: Johanna Luna Camera/Editor: Fai Kanaan. The NBA and William Hill, one of America’s leading sports book operators, today announced a new partnership that will make William Hill a Proud Partner and an Authorized Sports Betting Operator ... This video tutorial will teach you how to play the card game Bridge. The quick guide and scoring guide can be found at http://www.gathertogethergames.com/bri... This video tutorial will teach you how to play 5 Card Draw. More information can be found on our WEBSITE: http://www.gathertogethergames.com/5-card-draw SUBS...
