For lack of a better word, I basically mean recognizing which stocks/sectors always tend to decline whenever a disastrous event occurs (whether natural, political, whatever), only to surely recover later on.
Surely whenever there is an earthquake or flood, the market reacts in a similar pattern of decline and then "returns to norm", no?
The most generic and obvious example I've heard is that stocks related to guns tend to RISE whenever there is a mass shooting (as people scramble to purchase them for self-defense/out of fear of gun laws changing).
<<EDIT>> Bumping up a clearer example. I mean something along the lines of this: When Thailand was flooded in 2011, Lenovo announced it was going to have a very tight quarter, as most of its hardware is manufactured in Thailand. Having understood that, wouldn't it have been a pretty straightforward investment to invest in Lenovo, knowing that as soon as their manufacturers in Thailand recover the stock would recover?
Has anyone had any experience with this? Are there any more examples of such occurrences? It just always seemed to me like a foolproof (albeit dark) way to make a profit whenever the "opportunity" arises.
Submitted October 13, 2017 at 03:39PM by anticontenttime http://ift.tt/2z7DM57
