Hurricane Irene pounded the American Eastern Seaboard this past week, though it's hardly the only such unusual weather event to hit the country or indeed the whole planet recently. In fact, over the past couple of years, we've seen a vast increase in droughts in some areas along with floods in other areas.
Global Weirding
Some people call this phenomenon global warming, but I prefer a term I first saw mentioned by Thomas Friedman in the New York Times: Global Weirding. This is a much more accurate term because, as anyone from New York City can tell you, this past winter saw a number of record snow storms – not exactly what you expect from "?global warming."
I'm no scientist so I'll just go over the most basic bits of knowledge I have of this phenomenon and then get to the good stuff – how to profit from it.
There are two basic theories regarding the global weirding phenomenon:
The Scientific Community Theory
The scientific community is convinced that it's a result of the buildup of "?greenhouse" gases, especially carbon monoxide in the atmosphere, which traps more heat on the planet and causes global temperatures to rise. That's where the term global warming comes from.
However, just because the globe's overall temperature is rising doesn't mean that we'll see sunny skies all over the planet. Weather is weird to begin with and this supposed rise in temperature is just making it weirder, thus the more accurate if whimsical term, global weirding.
The Conspiracy Community Theory
The second theory is from those who insist that global warming is a myth. This theory claims that the earth's temperatures are cyclical and that they rise and fall every few hundred years. Under this theory, there is nothing to be concerned about regarding greenhouse gases since the earth will self correct after a while.
It Doesn't Matter for Profit Making
The thing is, whether you believe the scientific community or you believe the conspiracy theorists is irrelevant when you're trying to turn a profit in the short to medium term. In both cases, global weirding can be a bonanza as far as making money from investments.
The fact is that even if you don't believe a word of the scientific community's theory regarding global weirding, it is still accepted by most governments around the world as fact. This means that buying into companies which feed the desire to combat global weirding could be a smart move in the short to near term.
Electric Car Batteries and Infrastructure
I'm especially excited about companies manufacturing batteries for electric cars since these companies are poised to make a killing over the next few years. Remember that even if global weirding is actually nothing more than a myth, it's no myth that world oil prices are rising and continuing to rise. This means that there will be more and more demand for electric vehicles over the next few years, both from the environmentally conscious and from the cost conscious.
Another great investment in the face of global weirding is infrastructure companies such as Better Place, which is based in Israel. Better Place partnered with Renault of France to create an interchangeable battery powered car. The idea is to set up a series of changing stations where people could drive in with a nearly empty batter and drive out a few minutes later with a fully charged battery. This way, they avoid the problem of charging an electric vehicle for 8 hours or more. Better Place has already locked up exclusive rights for the technology in Israel and is negotiating for deals in other countries, including Australia.
Alternative Energy and Alternative Currencies
I'm a little less excited about alternative energy companies as an investment, mostly because wind and solar power are somewhat tricky to turn a profit from. On the other hand, governments seem to be continuing to invest in these technologies, in spite of the ongoing global financial crisis and as such, I'd cautiously recommend some alternative energy stocks as a way to make money in the face of global weirding as well.
Lastly, it might be worth watching the currencies of regions that are prone to natural disasters or extreme weather patterns, either to capitalize on the devastation or to be prepared with alternative currencies to trade in case the countries whose currencies you trade are hit with disaster. Though we can't usually predict hurricanes or tsunamis in the long forecast, there's no question that certain regions are inclined to suffer the wrath of nature, and that these events can trigger volatility in the currency markets. If you familiarize yourself with the patterns resulting from natural disasters, you may be able to trade successfully when the next one strikes...wherever that might be.