Greg Guenthner coming to you from Baltimore, MD... The largest theft of customer data from a U.S. financial institution in history… That's what the U.S. Attorney is calling last year's JP Morgan data breach. And now the court has charged three hackers with stealing the data of more than 100 million customers from JPM and other financial institutions. "One of the biggest financial-data breaches in history was 'securities fraud on cyber steroids,'" Business Insider explains. "The defendants took a 'classic stock-fraud scheme' and brought it into cyberspace, U.S. Attorney Preet Bharara said at a Tuesday press conference." What's terrifying is that so much data was compromised all at once. And that's not lost on the major firms that handle your personal data. Trust me—no corporate board wants its company to become the next big hack story. I've said it before and I'll say it again: Cybersecurity will be one of the most lucrative plays of the decade. That's because hundreds of millions of people are getting their personal data swiped. Remember, that could easily be you. No information is as secure as it seems and most corporations are way behind the curve when it comes to protecting your data. That's the reality of the digital world in which we now live… You've already had quite a few opportunities to make dough on the cybersecurity stocks that stand to benefit from this trend. But you might have noticed that I haven't written about 'em in a couple of months. That's because these stocks aren't getting much love these days. In fact, most of my favorite cybersecurity plays are sporting some downright u-g-l-y charts. Take a look: Despite its strong surge to begin the year, the PureFunds ISE Cybersecurity ETF (AMEX:HACK) has fallen woefully behind the major averages. You should also be familiar with industry leader Palo Alto Networks Inc. (NYSE: PANW) (we booked a 35% gain on our PANW trade back in the summer before these stocks started to slip). This play has also fallen out of favor with investors. It's down about 9% over the same timeframe. The more speculative names in the land of cybersecurity are faring much worse. FireEye Inc. (NASDAQ:FEYE) is a stock we've traded for substantial gains before. Not anymore—at least no time soon. FEYE is down almost 60% since June. With all of the news and activity in the industry, you would think cybersecurity stocks should be flying high. But they're not. Even the strongest trends can go through wild swings and corrections. And when this happens—as it inevitably will—your best strategy is to steer clear until you see strong signs that the storm is blowing over. [Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner] |
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