The last twelve months have been very hard on the terrorism industry.  Saddam's been captured.  Ghadafy surrendered.  Hamas leaders have been assassinated.  And the best bin Laden could do to disrupt our elections was send Al—Jazeera another videotape in which he looked more like an Islamic insurance salesman than the mortal enemy of Western civilization — in VHS no less. 

However, conceivably the worst month in history to own terrorism shares was November 2004. 

The month began with very bad news for terrorism investors all across the globe when U.S. President George W. Bush was re—elected to a second term of office. As the president who has done more to undermine the growth in this industry than likely any before him, nothing could have been worse for the future of existing terrorist business models than this election result.  Of course, early that Tuesday afternoon, terrorism shares were actually very strong with the release of the first wave of exit polls showing Senator Kerry with a commanding lead in states that were supposed to represent easy Bush victories.  However, this enthusiasm waned later in the day towards the close of trading when it became apparent that these early figures over—weighted female voters.

With little respite, terrorism shares took a further drubbing five trading days later when American and Iraqi forces stormed into the Insurgents Convention Center based in Fallujah.  As this Iraqi city had largely become not only one of the key headquarters for terrorist operations in this part of the world, but also a pivotal manufacturing, training, and distribution hub, the destruction of this huge corporate campus was seen to have dealt a devastating blow to the industry as a whole.

As if that weren't enough bad news, just two days later, after battling a mysterious illness whose cause has yet to be divulged to the public, the King of all Terrorists, Yasser Arafat, died in a Parisian hospital on November 11.  As the titular head of international terrorism sales and marketing for likely four decades, Arafat's demise will certainly have negative repercussions on an already troubled industry for years to come.

Fortunately for the remaining terrorism bulls, the next eight trading sessions resulted in some mild short covering as the terrorism bears (nee — Peace Lovers) took some profits amidst a slower news period, and ahead of the upcoming Thanksgiving holiday.  Accordingly, as the days following Arafat's funeral met with significant uneasiness throughout the Middle East, a bit of a bear market rally in terrorism shares ensued.

However, what life might have been pumped back into the industry during this news lull quickly dissipated on November 24 when Jordanian terrorist leader Abu Musab al—Zarqawi significantly chastised Muslim scholars for not doing a better job of marketing his product.  As reported by AP, Zarqawi stated, "You have let us down in the darkest circumstances and handed us over to the enemy... You have quit supporting the mujahedeen," he said. "Hundreds of thousands of the nation's sons are being slaughtered at the hands of the infidels because of your silence."

As this was not the kind of attaboys these clerics were hoping for, terrorist shares on exchanges and bourses around the globe went into a virtual free—fall when this announcement hit the tape.

Even though markets were closed, more bad news slammed this already embattled industry on Saturday, November 27 when a powerful Shiite leader in Iraq expressed strong opposition to any delay to the planned January 30 elections in that country.  According to Reuters:

Abdul Aziz al—Hakim, the head of the influential Supreme Council for the Islamic Revolution in Iraq (SCIRI), told Reuters he would reject calls by leading Sunni Muslim and secular parties for elections to be postponed amid relentless violence.   "This would mean that the terrorists have been able to achieve one of their main objectives; that there be no elections and that a suitable political process does not start," he said.  "We will insist on the necessity of holding elections and that a delay will not be in the interests of the Iraqi people."

On the same day, Pakistani President Pervez Musharraf made some very bearish statements about the future of the terrorism industry just prior to heading to Latin America for trade talks.  According to the Pakistan Times, Musharraf said the

'Kashmir and Palestine disputes are absolutely ripe for resolution and their resolution will bring a lasting peace and stability in the world.  The President said the resolution of Kashmir and Palestine issues will be the main subject of his discussions with the leadership of America, France and Britain. He said we have to resolve these long—standing issues and that will bring considerable stability in the world.'

As one would imagine, terrorism shares plummeted when trading resumed on Monday, November 29.  Adding insult to injury, more horrible news hit the industry the very next day.

First, according to AP,

'The interim Palestinian leader has ordered government—controlled media to halt broadcasts of material that could incite hatred against Israel, Palestinian officials said Tuesday.  The directive by Mahmoud Abbas meets a key demand by Israel, which has long accused the Palestinian media of fomenting hatred, and adds to the tentative signs of goodwill that have emerged since the death of Yasser Arafat on Nov. 11.'

Later that day, Haaretz reported,

'Egyptian Foreign Minister Ahmed Abu Gheit and intelligence chief Omar Suleiman are scheduled to visit Israel on Wednesday, during which they will attempt to advance Syrian requests to begin peace negotiations.'

With both of these news events hitting concurrently after a lousy trading session on Monday, terrorist shares on Tuesday continued their seemingly endless move south as sellers clamoring for the exits overwhelmed buyers right until the close of trading, as well as in the after—hours session.

So ended the worst month on record for an industry that, since September 11, 2001, has been perceived by many of its leaders throughout the Muslim world to be the fastest growing on the geopolitical landscape.  As a result, many shares are now down 80 to 90% from their post—9/11 highs with practically no bottom in sight, leading many terror analysts to question what the future is for an industry that was quite recently experiencing explosive growth.

Of course, Peace Lovers around the world have to be wondering whether now is the right time to be taking their profits by covering their shorts, or if these shares can go even lower.  Conversely, bargain hunters must be scratching their heads considering when would be the right time to stick their toes into the water, although nobody is interested in catching what is now perceived to be a falling knife.

Certainly, after such a horrible month, there has to be a reflex rally in here at some point.  The question is:  Will this be sparked by some heinous terrorist maneuver that suggests an industry rebound?  Maybe a significant oil pipeline explosion in Iraq or Saudi Arabia?  Or the senseless and brutal slayings of innocent people in some part of the world in which the industry has not yet been able to make serious inroads?

Irrespective of when the bear market rally occurs — if it does at all — the smart money appears to be awaiting another opportunity to short this industry at higher prices.  As one top terror analyst speaking on the condition of anonymity recently stated, 'The risk here is not having a short position when either al—Zarqawi, al—Zawahiri, or bin Laden is captured or killed.  On that day, these shares are going to tumble like a worthless dot—com stock in March of 2000.'

Noel Sheppard is a business owner, economist, and writer residing in Northern California.  Noel receives e—mail at slep@danvillebc.com.