DISCLAIMER: THE FOLLOWING "Freedom Is Not Free, Despite What Some Appear to Think" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Freedom Is Not Free, Despite What Some Appear to Think" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.

With 45 days and counting until disarmament proceedings begin, investors with money in the markets need to get a firm handle on the real issue: separating the "war premium" in the market from the "uncertainty premium."

Why?

Because there is big money to be made if we can use temporary sell-offs in the market to buy stocks that will be 20-30 percent higher should the market return to "normal" valuations sometime this year.

Secretary of State Colin Powell's U.N. briefing was (in my opinion) brilliant in design and execution and helps our task greatly. The unambiguous evidence of continued Iraqi non-compliance removed the last shred of "war premium" in the markets. How do I know? You just had to watch the tape today as he made his case. This Dow 7,900-8,100 area is clearly where the market thinks stocks have priced in the certainty of military action in the next 45 days. So 7900-8100 appears to be the war discount. Post war, this discount should go away -- i.e. stocks should sell for higher prices.

Make no mistake, the market has in no way priced in a complete discount for the uncertainty as to what military action will leave. You and I should expect this "uncertainty discount" to significant add to volatility in equity prices (10 percent or more intra-day and intra-week) as the trillion-dollar, short-term trading cartel of hedge funds and investment bank trading desks move from one side of the metaphorical market steamship to the other. All this shifting will take place while they decide whether the world's economies will be harmed or benefit from the inevitable downfall of Saddam.

My analysis of this situation -- based on months and months of careful research and evaluation of a great many experts in the military and the political consequences of military action in Iraq -- highlights a clear path for us.

The coming volatility in stock prices over the next 45 days should give longer-term investors great opportunities to buy genuinely secular (i.e. not cyclical) growth companies at temporarily overdone valuation discounts. At least as long as you understand the following:

• Disarmament or exile is a certainty because more people believe that war is, at the last resort, a necessary price to pay for the privilege of freedom against dictators than those who believe that the price of war is always too high no matter the situation or potential consequence.

• The military action we will embark upon will be so much stronger, SO much faster and SO much more lethal than Desert Storm that you will be as amazed as you are horrified by its deadliness and swiftness.

• The post-disarmament/exile/coup d'etat Iraq occupation will last for many years but will be paid for largely by Iraqi oil proceeds appropriated as reparations for 12 years of breaking U.N. rules and sanctions.

The "Old Europe" leaders feel that Iraq's transgressions against the world do not warrant military action. "We lived with 10,000 nuclear warheads aimed at us for 50 years and diplomacy finally worked -- why shouldn't it again?" they say privately.

These leaders choose to ignore the reality that it was the certainty of "mutually assured destruction" from America's 25,000 nuclear missiles that allowed diplomacy and the eventual implosion of communism to bring about the end of the Cold War.

We have crossed forever into a new geopolitical age. Mutually assured destruction is no longer a viable strategy or deterrent when your enemy has tens or hundreds of thousands of fanatics who welcome that ending. This point seems to be lost on some who analyze the short- and long-term implications of Iraq's sociopathic dictator.

The tape recordings, satellite photos and statements from informants Powell displayed at the Security Council prove beyond any reasonable doubt that Iraq has not complied with the order that it disarm. He said the U.N. places itself in "danger of irrelevance" if it doesn't take action.

What he did not say was that in an age where mutually assured bilateral destruction is not relevant, assured unilateral destruction has to be relevant. Otherwise, we ignore the dozens of lessons history has so painfully taught the civilized world as it dealt with megalomaniac, sociopathic dictators with the means to finance whatever their twisted minds can conjure. As well as the millions of lives lost in freedom's defense.

If there is no consequence for the sins of Saddam, then we are sending a message to all those who aspire to follow in his footsteps: you get a free pass until you do something so heinous and abhorrent to the freedom-loving citizens of the world that even France and Germany will agree to stop you. Thankfully, the relevant leaders of the free world are choosing to not send this message.

The world has a choice to make. Leaders can support (a) proactive disarmament against self-acknowledged enemies of freedom in the name of sustainable peace, or (b) tolerance in the name of illusory peace that lasts only until the next time someone repeats a Sept 11.-esque horror on the world.

Until the world is genetically engineered to rid itself of sociopathic despots, the free world will have to live with a horrible reality: It must be willing to sacrifice the lives of a relative few brave young men and women to prevent the loss of greater numbers of innocent people to protect the entire free world's way of life.

President Bush's logic and message from last week's State of the Union address still rings true: "we will not permit the triumph of violence in the affairs of men; free people will set the course of history."

Being prepared to settle the disarmament of Iraq militarily (if necessary) is not warmongering, as some would lead you to believe. If history has taught us anything, the complete opposite is true. Fighting small wars with overwhelming force, speed and surgical precision is the best defense we currently have to prevent big wars from ever happening again.

The world has more important issues to deal with to return our global economy to growth. Putting Saddam Hussein in the dustbin of despotic history would be a giant step forward for us all. The world becomes a safer, saner and more valuable place to invest the minute we prove that ignoring the will of freedom-loving people for peace has consequences.

Tobin Smith is a contributing market analyst for FOX News Channel and is a regular panelist on Bulls & Bears. Currently, Smith is the founder and CEO ChangeWave Research LLC.