How They (And You) Make Money Off Disasters
BOSTON (MainStreet) -- Especially in light of fatalities in North Carolina and Virginia, it is painful for many to think disasters such as Hurricane Irene carry an upside.
That's not so for many people, from those grieving to those who lost homes or boats or face huge repair bills. Insurance companies similarly will lose.
But the reality is that one result, and possibly the only silver lining, will be much-needed work for contractors, carpenters and electricians needed to mitigate damage from wind and water. Such repair work and prevention would have been even greater had an earthquake the same week on the East Coast -- centered in unlucky Virginia -- been even stronger.
Another beneficiary of devastating weather are all those supermarkets and retailers who, in the run-up to this and other storms, clear their shelves of bottled water, duct tape and canned goods.It's a truism: Tragedy and disaster hurt many, but can profit a few. Nature's fury, war and terrorism will always make some fortunes and boost returns for investors. Disease may sicken and kill us, but benefits hospitals, drug companies, insurers and those who invest in them. Author Naomi Klein coined the phrase "disaster capitalism" to summarize the rush for profits amid catastrophe and war. In The Shock Doctrine: The Rise of Disaster Capitalism, she compares disasters and conflict with IPOs that set the stage for revenue. The declaration of war in Iraq meant money for support, security and reconstruction efforts contracted to private companies, many of whom lobbied for invasion leading to the ongoing conflict. Is there a conflict for investors who profit from human misery? Ultimately, that depends on one's own moral compass. Wall Street is always a dog-eat-dog world with consequences investors may not realize. A play on Apple (AAPL) can be a bet against Samsung, Google (GOOG) and Microsoft (MSFT). An investment in Ford (F) or JetBlue (JBLU) can work against GM (GM) and Southwest Airlines (LUV). As one company falters in the shadow of another, is the investor role partly responsible for layoffs -- indirect pain, but pain nonetheless? The following are ways some benefit from human misery and tragedy:
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV