Weather predictions is not something you hear much about as a mean of outperforming in the markets. Investment ideas go down the thesis route, where theories are expounded and extrapolated on how trends will drive prices. This is why tech is the 800-pound gorilla when it comes to stocks because there is nothing like new technology and its connected disruption to grab attention and drive excitement. However, weather is not so gripping. But wait, climate change is all about weather and the world has been dramatically pivoting around the potential catastrophic potential for that.
I’ve been talking a lot with a weather predicting outfit called Weathertrends360 and their boss Bill Kirk. We were talking about things like bumper corn crops in Brazil when he mentioned there is highly likely to be a November hurricane to hit Florida in the next few days, one of only four land-falling hurricanes in the last 174 years.
Hurricanes are not good for most retail stocks but they are a big plus for home centers (like Home Depot and Lowes), big box clubs (like BJs and Costco) and discounter stores (like Walmart) . The models say there is a high chance of a Cat 1-3 striking between Fort Myers and Tampa, so the modelers say it’s there is a chance for a repeat of a Nicole-like storm that hit Vero beach in 2022. Let’s hope they are wrong.
Meanwhile the models are predicting a cold Christmas, which will be positive for retail, because cold seasonal Christmas resonating weather pushes people to stock up and get ready to hunker down for yule.
Back in Florida, the hurricane models are sinking up for a hurricane landfall of Sara on the 20th-22nd after tracking up from Honduras and the Yucatan Peninsula.
The science of weather forecasting has come a long way since years when they seemed a 50/50. Not only have the computers crunching the models become exponentially more powerful but the programs themselves have become extremely refined.
Forecasts can now reach out for many months, so that when they predict widescale wildfires in 2025, the probabilities are high that the models are going to be right.
There are some things the weather has no impact on, like the current bitcoin rally I’ve been going on about for months now here in my column, but in other cases, especially in commodities, weather is key. So I’ll be keeping an eye on the weather for you over the coming months and bringing any investment opportunities that these climate predictions suggest could be profitable.
Meanwhile, best wishes to Floridians and hopes the models have got it wrong this time.
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