(FORTUNE Magazine) – Many people study the world in an effort to forecast stock prices. Being committed to the efficient-market hypothesis -- which says just about everything knowable is already embedded in stock prices -- we see this as a waste of time. A more productive exercise, we claim, is studying the stock tables for clues to the future of the world. Why are defense stocks so buoyant? Since the lows of 18 months ago, the broad market averages are up about 25%. But with everyone in sight exulting in the end of the Cold War, Lockheed and Martin Marietta are up 40%, Northrop 85%, General Dynamics 95%, Grumman 115%. To some extent, the defense stock boom reflects the success of many companies in downsizing efficiently. Also in developing lucrative foreign markets. But we would bet that the market is also registering its affirmation of a thought put forward by Martin Marietta's canny CEO, Norman Augustine. Explaining why he was expanding his defense operations, Augustine told FORTUNE last February, ''I believe defense will come back. I read history books. Human nature has not changed in 1992.'' Still, defense stocks need an external threat. What might it be? One possibility, luckily looking remote now, is resurgent militarism in Russia. Iran and Iraq present midlevel threats. North Korea with nuclear weapons would be an imponderable. Then there is emerging superpower China. The Chinese threat is a major theme of Zbignew Brzezinski's new book, Out of Control. Historian Paul Johnson has also dwelt on China's enormous acquisition of weaponry from the former Soviet Union, and on the Middle Kingdom's suddenly booming naval power. Possibly Zbig and Paul are all wet. But thinking you ignore at your peril -- the collective intelligence of profit-seeking investors -- says some kind of threat is in the pipeline. And one way or another, a new defense buildup looms.