Now, I would never attempt to profit from others’ nightmares.
It’s not right morally, and it’s not something I would ever do. I’m not price gouging water for people in need. I’m not scamming funds claiming to help provide aid.
Instead, all I’m looking at today is how the market reacts to major hurricanes. Then, how those initial reactions tend to leave behind an easy profit opportunity for the everyday investor.
We all see the initial reactions in the stock market.
Insurance stocks tumble, stocks that operate cruise lines take a hit, and, in Hurricane Irma’s case, spot market prices for orange juice are spiking.
It’s all part of the knee-jerk reactions from investors on news a major hurricane is bearing down on the United States.
I spent several months in the past looking into this exact scenario.
And of all the movements from a hurricane that take place in the stock market, most of them are knee-jerk and too quick for the average investor to take advantage of.
But one inevitable reaction is worth trading on, and there’s still time to get in.
A Big and Devastating Storm
During the time I spent researching hurricanes, I learned several things that occur almost every time major hurricanes take aim at the U.S.
I talked to people in the industry, and I realized that these reactions occur so quickly because hedge funds employ meteorologists to consult with them and identify these threats at the earliest possible time.
So once a tropical storm is named, like Tropical Storm Harvey, it begins to attract the attention of Wall Street investors.
If it is expected to be a Category 3 hurricane or above and make landfall in the States, the action starts to happen.
It starts with the insurers selling off, and ones located mainly in Florida took it the hardest as Hurricane Irma plotted its path. Stocks like HCI Group Inc. (NYSE: HCI), Universal Insurance Holdings Inc. (NYSE: UVE) and Heritage Insurance Holdings Inc. (NYSE: HRTG) were down double digits in one day as worries were rising.
