Last Friday, as Shanghai markets closed and European markets opened, Bloomberg terminals, by and large, were closed for business. A number of rumors made the rounds as traders desperately looked for prices needed to make trades. In case some of you don’t know, Bloomberg is the most heavily used global source of price information and provides a trading platform for securities of all types—especially bonds.

One rumor involved Coke—some employee, gesticulating while telling a joke, is said to have spilled his Coke on a server. Who knows what other excuses were given. Perhaps Michael Bloomberg’s dog ate a critical connection. Poor dog. Even poorer traders. At this writing we have no estimates as to the costs of the outage—costs not only to Bloomberg but, far more importantly, to all those traders and news seekers who rely on the service.

No doubt, Bloomberg was hacked. Bloomberg did not rise to its top market position via carelessness with back-ups. Any successful provider of critical information maintains many layers of redundancy. Unfortunately the cyber world is—to use a military term, appropriate in this case—asymmetrical. That is, it is much easier to get in than it is to keep someone out. This is a kind of variant on the second law of thermodynamics—things have a tendency to break apart, not come together. To catch a cyber-attacker, one must catch an anomaly in the system. If, however, the anomaly is disguised to look like normal business, one is cooked. We’d guess, and it is only a guess, that the Russians are to blame. Their cyber focus is much more offensive than that of, say, the Chinese, who are content to steal industrial secrets. (When the Chinese recently introduced their 5th generation aircraft fighter, an expert commented that it no doubt was at least a match for our F-35. After all, they started with our blueprints.)

The clear moral of this story: the need for cyber security—already a major issue—is growing and will continue to grow. Indeed, according to PriceWaterhouseCoopers, reported incidents now run at a five-year compounded average annual growth rate of 66 percent—an increase of nearly 13-fold in five years. Moreover, after it reached a plateau for three years, last year the incident growth rate accelerated sharply, climbing nearly 50 percent. The raw numbers are chilling. Roughly 43 million attacks reported in only the first nine months last year translate into an average of nearly 157,000 every day. And, of course, this does not count unreported attacks. For all we know, the Russians were involved in breaking the affair that led to the downfall of former CIA Director and General David Petraeus, not to mention any number of other harmful secrets.

To compound the problem, the government’s cyber fighters—even the best—earn only a fraction of what they could in private industry. We advise investors to own cyber-security stocks -- a few of which are reviewed in our latest update of The Complete Investor -- especially those with the ability to pay lots of employees a ton of money.