When the big california earthquake hits, would it affect the stock market?
May 30, 2009
in
Earthquake Questions
as most of us know its not if, but when is the big earthquake going to hit california. i was wondering if itll have any effects in the US stock market after the earthquake comes. do you think any particular company's stocks would fall or rise?
thanks
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6 comments
dnldslk on May 30, 2009 at 12:52 pm
The market might take an immediate dive, but that would probably be a buying opportunity.
Insurance companies usually take a big hit at first, but then rebound, since disasters essentially advertise the need for insurance.
Building companies and infrastructure plays would be good investments. Obvously an earthquake might put a damper on the tourist business in affected areas–don't invest in hotels or airlines–but any business involved in reconstruction should benefit.
Buy the Numbers on May 30, 2009 at 12:52 pm
Insurance companies would get hit the hardest. Since they are counterparties to many deals (think AIG), the whole financial sector would get negatively affected.
If this happens this year, it would be enough to get the stock market to retest its March lows (and probably fail, in this case).
Pedro on May 30, 2009 at 12:52 pm
depending on how big it could have significant ripple effects. california economy on the brink of failing without an earthquake……consider also fires.
jeff410 on May 30, 2009 at 12:52 pm
Depending on how strong it is, where it hit and how disruptive it is to business it could have a significant effect on the economy and the market. Not just insurance companies.
gosh137 on May 30, 2009 at 12:52 pm
The Union Pacific Railroad, which operates many trains out of Los Angeles will take a big hit until it can fix its tracks. same with telephone company if their cell towers are damaged and landlines fall down. Local utility companies would have to spend big money replacing their power lines and repair natural gas pipelines.
How many major companies have headquarters or factories in LA & SF areas? LOTS.
Raven on May 30, 2009 at 12:52 pm
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