Osama bin Laden is dead. On Sunday, May 1, President Obama announced that U.S. forces operating in Pakistan had killed the head of al-Qaida, and a new chapter in world history began.
For nearly 10 years -- ever since Sept. 11, 2001 -- al-Qaida's leader has loomed like a specter over our lives. He's been the "black swan" circling the rooftop. The bogeyman in the closet. A 6'5" unknown, frightening a market that famously abhors uncertainty.
And now he's gone.
The bin Laden effect
It's hard to overestimate bin Laden's effect on our world. This being the Fool, I'm going to leave the discussion of political, security, and diplomatic implications to the journalists at CNN, et al. Today, I'll just sketch out a few potential changes for U.S. investors.
You can draw a pretty direct line of correlation from bin Laden's 9/11 attack to the implosion of the American airline industry, and the disappearance of Northwest Airlines and Continental as independent entities, transformed and merged into Delta and United Continental. His influence continues today, in the form of long lines of unhappy travelers milling about U.S. airports -- shoeless, water-bottleless, and irradiated. While not solely responsible for the airlines' periodically reporting $1 billion-losing quarters, he's not exactly blameless.
On the other hand, bin Laden also arguably helped create industries. Airport security, for example. Would X-ray scanner American Science & Engineering
But now he's gone. So now what?
Investing post-bin Laden
I'm typing this column before market-open on Monday, but I'll take a wild guess that when trading begins we'll see some market euphoria over the removal of at least one "unknown" from Mr. Market's bogeyman closet. Don't take it as signaling some immediate big trend, however.
As the president counseled last night, America must remain vigilant against revenge attacks by bin Laden backers seeking to avenge their leader's fall. The 10th anniversary of Sept. 11 is just around the corner, and I expect nerves will remain jangled for the next several months at least.
Don't expect to see X-ray security machines disassembled and packed into shipping boxes at JFK and LAX right away, for instance. Nor is now the time to short defense contractors. After all, Lockheed Martin's
To the contrary, with the Arab spring in full swing, Libya heating up, and al-Qaida crippled, it's entirely possible that we'll see more U.S. military activity in the Middle East, rather than less. For years, Predator drones, Boeing
Foolish final thought
These, as I say, are the immediate implications of bin Laden's demise. But here at the Fool, we're all about long-term investing, and long-term thinking. On that score, I wax optimistic.
Sunday saw the removal of one small but significant impediment to market confidence. It removed a reason for oil prices to be quite so high as they are. It diminished the risk to air travel and airline stocks. For defense investors, it sounded the opening note in a debate over "Why are we still in Afghanistan … now that Osama bin Laden is dead?" And I believe it advanced the date of our withdrawal by several months, if not years.
Because on Sunday, the world just got a little bit safer, for investors and … for everyone, really. For this we can all be thankful.
