Bush cronies are cashing in on terror. And so can you!

According to at least one top analyst who tracks homeland security stocks, it's an ideal time to invest in companies that seem to have sprung from the pages of a Philip K. Dick novel. There are outfits that develop systems for secretly reading an entire nation's e-mail or biometrics scanners that can recognize every face on a busy street. Then there are purveyors of unmanned spy blimps and robotic death machines. But how's a typical 401K owner supposed to pick the winners?

In this age of outsourcing, 70 percent of the nation's estimated $48 billion intelligence budget goes straight into the pockets of private contactors—and an ample portion of the $58 billion earmarked for homeland security is also up for grabs. For creepy little firms in the defense sector, the road to profitability is paved with government contracts. But landing those coveted deals is often dependent on having friends in those high places where procurement decisions are made.

Lately, we've noticed a stream of former Bush Administration officials and insiders signing on as directors at obscure companies that compete for contracts at their old agencies. Where other observers might see revolving-door corruption, or perhaps an orgy of military industrial profiteering, we see a tantalizing investment opportunity. Just because this crew, which includes George Tenet, Paul Bremer, and Richard Perle, monumentally bungled their duties to the American tax payer doesn't mean they aren't capable of feathering their own nests—and yours.

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GEORGE TENET


The ex-CIA director who called Iraqi WMDs a "slam dunk" has joined the British military tech firm QinetiQ (meant to connote James Bond's gadget genius, Q) which offers quirky products like exploding ink, bullet-firing robots, and a submersible device to detect terrorist scuba divers. Of course, that's in addition to a line of no-nonsense weaponry like "dense metal kinetic energy penetrators" and "electromagnetic and electrothermal chemical guns." This gig is just the latest in string that has landed Tenet $2.3 million in salary and stock since his retirement in 2004.

PROGNOSIS: A skeptical UK government audit called QinetiQ's profits "excessive." So what's their point?

TICKER: QQ (London)