Katrina's disruptive ways were fit to be featured this past week. Let's take a closer look.
The winds of change can be brutal and cruel
What's left to say about Hurricane Katrina? It was a horrific natural disaster. Living in South Florida, I felt the storm's softer brush before it picked up some strength and barreled into coastal towns in Louisiana and Mississippi with much greater force. I had to go without electricity in my Miami home for a little more than six days, but it's clear that there are fates far worse than a few sweaty nights.
As human beings, we naturally feel the storm's emotional impact. It was devastating, and some parts of the country will take a long time to get back on their feet. As investors, we'll find that the financial impact of the catastrophic storm will be colossal as well. Shortly after Katrina came and went, we covered the hurricane's role in moving the stocks in the airline, insurance, utility, and casino industries.
If you're heading off to refuel your car, you may soon start feeling Katrina's power at the pump with higher gas prices. Yes, when a natural disaster is the sneeze, sometimes the whole country catches a cold.
Higher gasoline prices may also dent leisure stocks as pocket change grows sparse. Perhaps that's why, save for the home improvement chains such as Lowe's (NYSE:LOW) and Motley Fool Inside Value recommendation Home Depot (NYSE:HD), which tend to tick higher when destructive calamity strikes, retail hasn't been the best sector lately.
Would you like a Slurpee straw with that buyout?
Another retailer that has often been immune to higher petroleum prices is 7-Eleven (NYSE:SE). The convenience store giant certainly doesn't mind selling you higher-priced gas. It's also well-stocked with impulse items, in case you need a sandwich or a Slurpee. Car fuel? Bean burrito? Either way, 7-Eleven knows gas. The Motley Fool Stock Advisor recommendation had a big trading week, but it wasn't related to skyrocketing gasoline costs. It was the announcement that 7-Eleven Japan would be acquiring the company at a premium.
It's easy to get a jolt of patriotic jealousy when an American institution gets gobbled up by an overseas giant -- think DaimlerChrysler (NYSE:DCX) -- but one also has to be realistic. We live in a global marketplace, and strategic acquisitions make for compelling imports and exports.
The 7-Eleven company has always been an intriguing one. More than just a convenience store these days, the 24-hour chain has upgraded its image by beefing up its prepared foods and taking chances on things such as disposable DVDs and pay-as-you-go cell phones.
It won't matter where its parent company is based. The domestic juggernaut is bound to continue its steady all-weather ways for investors. And as far as "all-weather" goes, be careful out there. The named storms have only gone through the first half of the alphabet in this viciously active season.
The headlines behind this week's stories:
- Katrina Blows Off Airlines
- Katrina and the Waves
- The Staying Power of Utilities
- Against Katrina, Casinos Lose Big
- Ohayou, 7-Eleven Japan. Sayonara, 7-Eleven.
Until next week, I remain,
Longtime Fool contributor Rick Munarriz feels for the folks of New Orleans, Biloxi, and other affected areas. He does not own shares in any of the companies mentioned in this story. The Foo l has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
