From Ken Little,
Your Guide to Stocks.
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Stock investors may be tempted to bet on the upcoming hurricane season by investing in companies that could profit from others’ misfortune.

The consensus of major weather forecasting services – public and private – is that this season will be above average in storm activity.

National Weather Service is looking for up to 17 tropical storms with seven to ten becoming hurricanes.

Stock Market and Hurricanes

The National Oceanic and Atmospheric Administration puts the odds at 75 percent that the hurricane season beginning June 1 will be above average in activity.

If storms hit the Florida and/or Gulf Coasts, construction companies may find work for crews idled by the housing slump in other areas.

Building material supply companies might also do well in storm recovery areas. Financial services companies often find new customers with money to re-build looking for mortgages.

Bet against Insurance

Other investors may want to bet against insurance companies, although modern underwriting techniques and re-insurance programs limit the risk of most companies.

However, if the thought of profiting off your fellow citizens’ misery bothers you, consider forgetting trying to outguess the weather and stick with your long-range investment plan.

If the TV weather person can’t tell you for sure whether it will rain in two days or not, investing on long-range hurricane forecasts is more like gambling.