Friday’s tragic events in Paris punctuated what has been a very bloody couple of weeks at the hands of ISIS. First on October 30th with the downing of a Russian commercial flight from Egypt, killing all 224 people aboard, then two coordinated suicide bombings in Beirut Lebanon that killed 40 civilians on Thursday a day before the atrocities in Paris. While there have been no shortage of opinions from security officials across the globe as to what this spate of terrorism means, I think it is safe to say that however well we think ISIS territory is contained in Iraq and Syria, and how poorly organized we think they are outside of the “caliphate”, the events of the last couple of weeks highlight their determination to take the war overseas versus anyone they feel is restricting their ambitions in Iraq and Syria, and we are likely closer to the beginning of this trend than an end.
As the atrocities of Friday’s attacks unfolded, I sat with my co-panelists on the set of CNBC’s Fast Money at the Nasdaq, overlooking Time Square. Our show did not air as the network covered the attacks and as we sat on set listening to the coverage we looked down at the thousands of people outside, who carried on with their selfies and eating soapy water dogs without a care in the world. It struck me and my fellow panelists again just how vulnerable those of us are who live in densely populated cities like NYC are. Sadly, as a long time resident of NYC I have long feared that the sort of terrorist acts that took place last week in Paris and Beirut would eventually take place again in the Big Apple.
I am not a fan of the idea of attempting to profit from terror fears, and the idea of adding protection to your investment portfolio for fear of a terror attack that will setback the U.S. or global economy doesn’t make a whole heck of a lot of sense. But I would say there are probably some nuanced ways to consider investments taking into account the cost of terrorism defense.
Here is one example that came to mind on Saturday afternoon as a sat among 200 other people sipping on my Cherry Coke and eating popcorn as I watched The Martian. I thought of the long security lines that exist at almost every major sporting event and concert venue as guards pat you down and use a metal detector to expose weapons. Why does Madison Square Garden feel compelled to employ real security, but the Regal Cinemas in Union Square that has thousands of movie goers and dozens of employees not feel the same need? Obviously, terrorists would love to only focus on landmarks for maximum psychological effect. But what we saw in Paris may force a change in our security response.
One of the 8 suicide bombers in Paris on Friday was exposed at the security check at the soccer stadium, likely saving dozens if not hundreds of lives. Just think about how easy it would have been for that same suicide bomber to have inflicted maximum casualties in a densely populated movie theater, not too different than what took place at the Bataclan theater, the site of the most casualties on Friday night.
I know little about movie theater stocks AMC Entertainment (AMC), Cinemark Holdings (CNK) and Regal Entertainment (RGC), but I am hard-pressed to think that this industry will not feel compelled to add similar security prevention measures as do larger venues. I suspect this is going on all over Paris as we speak and is likely the start of a trend that will be enacted in most densely populated event spaces. This will cost money and become another annoyance to theater goers at a time when there’s already a battle to get them out of their house and away from their 60″ flat screen with surround sound.
Could the roll-out of extra security measures across public places like movie theaters be an overreaction to terrorism? Sure, my Cherry Coke habit at the movies is the most likely thing to kill me at a movie theater. But as we saw after 9/11 at stadiums and airports, an ongoing war with ISIS probably means even more security measures at home. And with the events in Paris it’s now likely to roll down from just the biggest gatherings of people at the most iconic tourist spots.