Investing and Profiting from Calamities and Disasters in Malaysia

Every country on the planet have their own unique disasters and calamities. Some countries have more disasters while others less. 

In Malaysia the usual natural calamities we have are the floods, storms, landslides and drought while the man-made calamity is the haze from Indonesia. 

In the past the disasters which occurred were the bird flu virus, avian flu virus, and a tsunami in 2004. New disasters will crop up and this happened on June 5th, 2015 where we had our first 6.0 magnitude earthquake which struck Ranau, Sabah.

New potential calamities in the future could be the eruption of a big volcano in Indonesia or Philippines, a new disease, or a man-made calamity such as a terrorist attack on a city.

How to Make Money In the Stock Market From Natural and Man-Made Disasters in Malaysia.

1. Haze

This is happening right now so I picked this out first. 

At first glance, the haze or smog from Indonesian forest fires seems a big disaster to the stock market. 

People getting sick, airports closed, ships cannot sail, fewer tourists, events cancelled ..etc. So less profits for companies in travel and tourism. 

But there is a silver lining to the haze..

Chickens dying, chicken laying fewer eggs, vegetables dying, fishermen staying home, oil palm trees producing less fruits, rubber trees producing less latex, ...all leading to less supply and higher prices. 

Read this article about how  "Haze choking farms too" and you know what I mean above.

So chicken and egg counters like Lay Hong, LTKM, Teo Seng Capital, and CPO prices go up and you will see what I call a Haze Rally.

Example @LTKM Share price rally

2. Diseases

Diseases such as bird flu, SARS, H1N1, H1N7, etc. appeared in early 2000's and have made comebacks on numerous occasions since. 

If the disease becomes a world-wide or region-wide phenomenon affecting MALAYSIA too then we can expect the local companies producing medical rubber gloves to encounter a big and strong rally.  

Other companies that also see a rally could be pharmacy counters and those producing drugs and vitamins. 

However, expect the opposite effect on chicken and egg companies this time if the disease affect poultry because consumers will avoid eating them.

3. Drought (El Nino?)

The meaning of drought is a period of hot weather with very low rainfall.

In this case, if VERY BAD ...can expect cold and ice drinks producer and supplier like F&N and mineral water companies like Spritzer to make lots of money.

And extreme weather too could cause CPO prices to rally, you can go read article on "El Nino dry weather to lead to rise in the palm oil price"

4. Earthquakes and Tsunami

I grouped them together because earthquakes and tsunami are related.

We got struck by a tsunami in 2004 due to an undersea earthquake in Indonesia and a 6.0 magnitude earthquake happened in Sabah this year.

Not much of an impact because the area affected is usually very focused (small area) and remote unless the earthquake and tsunami struck on a big city causing major damages to properties and infrastructures.

Then construction companies will get big contracts in re-building buildings, homes, roads, bridges, etc.

5. Floods, Storms and Landslides

I also put them together because floods, storms and landslides are related.

Again, I see not much of an impact unless the disaster happen on a large scale causing a big portion of infrastructures to be destroyed or damaged. 

Then construction companies will get big contracts in re-building buildings, homes, roads, bridges, etc.

6. Big Volcano Eruption

This will happen one day as Malaysia is in the area known as the "Ring of Fire" and Indonesia and Philippines are two countries with the largest active volcanoes in the world. 

Anak Krakatoa blowing ashes in 2011

Indonesian and Philippine volcanoes generally do not appear to be a threat due to the small size of the volcanoes and the distance of the volcanoes to Malaysia. However one WILD CARD could be a big volcano named "Anak Krakatoa" in Indonesia, (the site of the Krakatoa volcano eruption in 1883 which engulfed the whole region back then) ... this day this volcano is very active and often seen coughing out smoke, ash and lava.

The dangers with volcanoes isn't the eruptions but the smoke and ash that the strong wind could carry and blow around the region. It's similar to haze but FAR MORE DEADLY because volcanic smoke and ash contains dangerous chemicals and glass particles that can damage the lungs in a short time.

Same like haze ...people getting sick, airports closed, ships cannot sail, fewer tourists, events cancelled ..etc. so less profits for these companies.

But unlike the haze, there is NO silver lining to the volcanic ashes I think ..

Because with chickens dying, vegetables dying, oil palm trees dying, rubber trees dying, ...lead to less supply and higher prices.

But where to find supply if all are dead or dying?

I hope this volcano thing will not happen.

7.Terror Attack

Terrorists have always been in the news since the 2001 Twin Towers attack and lately since ISIS appeared. Quite possible it might happen in Malaysia one day. 

IF this happens expect the whole stock market to crash for a day or more. But this is temporary like in the 2001 America attack. Many cheap sales so good time for bottom fishing.

Conclusion

Some people call this disaster investing or disaster trading. I did not cover wars and nuclear missiles as I think this is very remote. It can be very profitable if you bought at the beginning of the disaster and when prices is at close to the bottom.  However dunno if it's good karma or not to do this since you are essentially trying to make money from other people's losses.