investments and the Japan earthquake

So with the horrible tragedy of the earthquake in Japan many are expecting the Nikkei to drop like a rock and may also effect the U.S.'s stock market too also for alot of deflation to hit the Yen. I was wondering if it will effect PM's or what other investments would go up or down now.

 

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I don't see this affecting US investments as a whole, but may hurt specific companies such as the big international property/casualty insurers.

 

Now it is not just the earthquake, but also a nuclear issue. Now I really wonder if I should buy in right now before the market opens up on Monday to respond to the nuclear news.

 

I would think that PM's might drop as a little disinflation takes hold.

 

I can see speculating on what markets will do, but investing to try and make money from a disaster of this magnitude seems a little sick and shallow doesn't it? I'm not accusing anybody of anything. But, I know somewhere someone just won't be able to resist.

 

I'm just wondering if it might be a good time to get out of pm's and into another investment cause say pm's are going to drop or stocks and bonds will go up from deflation...

I agree trying to make money on a disaster is kinda messed up but I'm not talking about trying to sell food/water at a higher price to those affected by this tragedy and also what's wrong with protecting your investments?

 

Most of the casualty companies are citing their "act of god" clause and won't have to pay. Earthquakes are considered primo acts of god. I live in an earthquake zone ( 7.2 last Easter less than 40 miles away) and special insurance that covers earthquakes on my house is over $5,000 a year with a $35,000 deductible.

The Japanese Nikkei will drop, futures down over 3% now even though it isn't trading. PM can't get you through a disaster such as this. Most of the damage seems to be in agricultural/fishing areas, and not in heavy industry or wealth areas. I suspect companies such as GE, CAT, Deere, Japanese Heavy equipment companies, Bio companies with iodide compounds, 7-11, etc. as supplies, demolition, and repair will be a long affair. Japan had a huge debt problem, and this will add tremendously to it, but the citizens will probably accept any new taxes now, thinking that the reason is the tragedy alone. The 7.2 was the largest quake I have been in, but during the aftershocks which are still occurring 11 months later, when they start you wonder if it is just an aftershock or a new one even larger.

 

In CA there is no such thing as earthquake insurance. But, you're house is still covered. If your roof caves in because of an earthquake, it's covered just the same as if the wind blew a tree over and it crashed through your home. Still an act of God, and still covers damages.

As far as Japan and it's economy on the global scale, I see no changes as of yet. About 40% of our shipping business comes from Japan and it hasn't shown any indicators of it slowing due to damage in infrastructure in industry. The larger ports are still functioning at least to some capacity, because ships are still showing to arrive and depart on time. Only one shipper has had to move operations to a Korean port that we deal with.

Unfortunately this seems to mean that most of their tsunami protection was focused on protecting industry and trade and not on the people who live there. Guess thats typical of a money hungry economy, such as our own.
Guy

 

I am with you on this one. There are no lower forms of life than speculators that make money on misery.

 

The OPs question was not "should I buy bottled water and try to sell it for $20 each to the Japanese."

There is a big difference between trying to profit from others misery and trying to protect your own financial/future well being.
So I should hold onto stock in a company that is in financial trouble and going out of business because they will have to lay off employees. I should not sell my silver when it gets to $40 because some poor guy who doesn't pay attention jumps on the bandwagon late and buys right before a crash.

 

I disagree with this. Most policies state somewhere as does mine ( CTA/NEA sponsored) , buried in the legalese that " This policy does not provide earthquake insurance "

and this site explains a little more. If you have insurance that does not include such as a provision, you are indeed lucky. A roof coming off or askew after an earthquake is not covered under most as with wind. Flood insurance is often similarly exempted by many policies and requires additional insurance by mortgage companies. The insurance companies that do remove earthquake responsibility do have to provide supplemental insurance, but they have large fees and deductions.

Jim


http://earthquakeauthority.com/index.aspx?id=13

 

I don't know what my policy has in the fine print, but after the 99 7.1 Hector Mine quake did a lot of damage in my community, our insurance covered a retaining wall that separated from it's foundation and some major structural damage to parts of the house. I'll have to look again how they wrote off the damage, but I do know they didn't specify damage due to an earthquake. Unfortunately, since you mention flood insurance, where I live, even another policy won't cover than as it's considered semi-active river bottom, even though the Colorado hadn't flowed where my house is in over 50 years after they channeled it.
Guy

 

Howdy folks,

I've been investing for about 30 years and while that's not that long, I've been thru some nasty events starting with Black Monday in '87 when the market dropped 20%.

I've found it best to sit tight and wait for the dust to settle before doing anything with my investments. First off, the easy money was already on red and bets are closed - you don't have time to make any easy money. Second, most market actions will be overdone as will the reaction, and further reaction, and further reaction . . . it's like watching a bloody pingpong ball and trying to choose a side. Lastly, the economic intricities, connections and convolutions are a gd gordian knot and very hard to dissect, leave alone time.

Feh, I'd sit tight for a while and if I chose to invest I would probably be WITH the Japanese with a mutual fund like Price PRJPX or Matthews MJFOX. They're a very tough people and when called upon to 'suck it up' are some of the best.

peace,

rono

 

On the short-term - I see money moving from the Nikkei into PMs and other liquid financial instruments as a safe haven while searching for other investment opportunities. There will be some speculative trading in energy away from nuclear into oil and other alternatives due to the reactor meltdown anticipating the Japanese and US govenmental reaction to this event will be negative. Timber, steel, grains and base metals will get a push anticipating raw materials needed for reconstruction. Companies with siginificant Japanese ties that produces heavy equipment and construction material with significant manufacturing facilities outside the mainland such as Nucor Steel might be good plays.

To be honest - your guess is as good as mine.

 

Gold and silver might benefit, but with the japanese car market on hold for the immediate future, don't expect your platinum or palladium to do well.

 

Glad to see silver and Gold didn't drop but it seems someone took a baseball bat to platinum and palladium.

I wouldn't mine Palladium dropping like a rock as I would like to get a Palladium Coin.

On another note I didn't want to have to pull this card ever but I feel it needs to be. I have Friends in Japan and they happen to even be Japanese! I Also understand that some people wouldn't miss a beat on trying to sell coffins and other crap in the hopes of making $$$. But I'm not that kinda guy...I was just wondering how this tragedy effects the US and the world as a whole. I noted a negative being the Nikkei dropping like a rock and a positive to those holding yen will gain value. But Basically I just want to know how this effects financially the world...I'm still learning how our world works and figure it's a good idea to know how things effect other things here...

p.s. flame me all you want saying I'm "sick and shallow" or "There are no lower forms of life than speculators that make money on misery." but I probably have less value in pm's and other forms of value then most of you...so what can I gain? a few more dimes? also I would rather throw my "small collection of value" in a volcano then to have my friends go through what they are over there...thank God they are located close to the US naval base and our armed forces are currently helping to care for them.
​

 

There is no harm I see inquiring economic effects of a natural disaster. Alex is just trying to learn, not trying to profiteer. There is a lot to take in with Japan, unfortunately they are more leveraged than the US government, so rebuilding will be painful for them to raise the funds. I don't really see any PM angle, since they are not major producers. The only thing I would bring up is they are probably the biggest holders of platinum and palladium in the world, and you might see some selling pressure as families sell off jewelry and coins to raise cash. In Japan, gold is considered low class, real jewelry to them is made from platinum.

 

In Ca there is no earthquake insurance coverage from a homeowners policy, unless you buy a separate earthquake coverage. Desertgems premium is high because he's obviously located near a major fault. His deductible is normal. btw you can't buy earthquake insurance in Ca for at least 6 months after a major tremblor.

Guy- Your being paid off with apparently no deductible is unbelievable. Also you for sure pay for a separate earthquake rider, or the insurance adjustor is a relative of yours.

 

Well there is the Yellowstone Caldera. It evidently erupted on a 600,000 yr super-volcano cycle, but now it is 40,000 yrs overdue, and the bulge is constantly growing. Not a question of if, but when. Wonder if humans will still be around and can last through the nuclear winter that will result? Life is precious, spend it wisely

http://volcanoes.usgs.gov/yvo/faqsscience.html

Jim

 

Howdy,

I for one don't have a problem with investors reacting to events around the world, be fortuitous or horrific. There's a difference when you buy supplies in Tennessee then take them to NewOrleans just after Katrina and sell them at 10x.

While a terrible tragedy and one deserving of all of our prayers, taking a macro-economic view of this sort of thing show me a very bullish future for Japan. It's the economic activity of rebuilding that will spur growth throughout the Japapnese economy. Millions of insurance claims, slowly at first, but faster as time goes buy, folks will be rebuilding their homes and barns and businesses. They'll be rebuilding all their roads and railroads and other infrastructure. All of this will be brand new and state of the art. Cripes, it'll be like the Marshall Plan in Europe but financed by insurance companies, the BoJ printing Yen like Uncle Ben prints Dollars, and just the backbreaking work of the Japanese people rebuilding their lives. If you want to play this, get yourself a good broad based Japanese mutual fund like Price PRJPX or Matthews MJFOX.

peace,

rono