Superman wasn't immortal after all. Actor and spinal cord research advocate Christopher Reeve died yesterday after suffering from cardiac arrest at his home in Westchester, N.Y. Reeve gained fame as an actor in the Superman movies but had more of a social impact on the world after an equestrian accident left him paralyzed.

He spoke out tirelessly, advocating for stem cell research and more money to help those with spinal cord injuries. He continued a strenuous exercise program of his own in hopes of one day being able to walk again. He was 52.

In today's Motley Fool Take:

4 Ways to Profit From Catastrophes

By

Richard Gibbons



Last week was a sickening week for pharmaceuticals. First, Merck(NYSE: MRK)pulled Vioxx, its $2.5 billion pain medication, amid concerns of increased risks of heart attacks. Then Chiron's(Nasdaq: CHIR) license to manufacture flu vaccines was pulled by British health officials. Similar bad news happens regularly to one company or another, suggesting that investors might want to consider several ways to profit from such events.

1) Buy the diseased company
Sometimes, what looks like the plague will turn out to be little more than a head cold. The important question is the extent to which the unfortunate event will affect the company's long-term competitive position. If the answer is "not much" then the market could be providing the opportunity to buy a strong company at a discount. Think Intel(Nasdaq: INTC), and its performance since the mid-'90s when it tanked due to a processor bug.

Merck's competitive position will certainly be damaged losing such a huge revenue generator and the potential lawsuits. But Chiron's difficulties may only last a year and not hurt its long-term competitive position significantly.

2) Buy the competitors
When one company falters, a competitor will often pick up the slack. However, investors must be certain that the troubling event is company-specific, rather than affecting the entire industry. Investors who tried to profit from Lucent's(NYSE: LU) misfortunes in early 2000 by getting into Nortel Networks(NYSE: NT) have suffered as the whole industry tanked.

Pfizer (NYSE: PFE) may profit from Merck's troubles, if its competing drugs don't have similar repercussions. Vaccine-providers Aventis(NYSE: AVE) and MedImmune(Nasdaq: MEDI) could benefit from Chiron's troubles. But they're unlikely to profit substantially, because flu vaccines require months to incubate and for other reasons.

3) Buy the indirect beneficiaries
Sometimes, one company's difficulties may help another company or just provide hints about the future performance of another company. For instance, while Florida insurers have suffered recently, home improvement stores like Home Depot(NYSE: HD) have been doing brisk business. On an even more ghoulish note, influenza has a significant effect on death rates, which could help funeral service providers. During last year's bad flu season, Service Corp.(NYSE: SCI) observed increased business due to influenza. It, and over-achieving Hidden GemAlderwoods Group(Nasdaq: AWGI), may see similar effects this year.

4) Do Nothing
You don't need to join the crowd just because there's much ado. If the news is temporary, then it will neither demolish a strong company, nor transform a sickly company into a powerhouse. So, if your portfolio is filled with over-achievers, some short-lived bad news is no reason to deviate from your long-term strategy. Doing nothing can be the best decision you can make.

On the other hand, if your portfolio could use a few more over-achievers, you might want to check out our new Motley Fool Rule Breakers newsletter. You can take a free, no-obligation trial today.

Related Fool commentary:

Also, join us on our Merck or Chiron discussion boards, which are among the best on the Web.

Fool contributor Richard Gibbons is only slightly contagious. He owns shares of Service Corp., but none of the other companies discussed in this article.

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Don't Waste Your Vote

By

Tim Beyers

You watched the debates. You're carefully weighing the issues. You're one of those prized "swing voters" they talk about in the papers. And you're happy about it. You're swimming in pride over the power democracy has bestowed upon you. That's great; congratulations. But before you do a celebratory touchdown dance, a question: Will you bring this same level of enthusiasm in voting on the issues involving the companies in which you own stock?

At the end of each fiscal year, every public company is required to update its owners -- that is, its shareholders -- on its progress and bring to a vote various issues that require outside approval. This can be anything from a new compensation package for executives to a stock options plan for employees to ratifying the board's choice of accountant. All this business takes place at the annual meeting, shorthand for the yearly meeting of all shareholders. Since most stockholders won't travel to such an event, voting materials are mailed in a packet known as a proxy. Think of it as an absentee ballot for owners.

You're not alone if you don't vote. As fellow Fool Selena Maranjian pointed out recently, it's typical to leave the fiduciary responsibilities to the institutions that own most of the shares, such as mutual funds. Sometimes, too, management controls most of the voting shares, making the mailing of proxies nothing more than an empty gesture. But that doesn't mean shareholders can't create meaningful change. Just look at what happened already during 2004:

And these are just the big stories. Other notable issues from this year include a proposal from pilots that forces Delta to seek permission from shareholders for extraordinary changes to its normally bankrupt-proof executive pensions. That nonbinding resolution passed with 53% of the vote.

Also, next year, if an acquisition doesn't proceed as hoped by management, Oracle(Nasdaq: ORCL) could seek to take over PeopleSoft's board by nominating its own directors. Voters could install them through the proxy process, effectively giving Oracle CEO Larry Ellison control and making OracleSoft inevitable.

Fortunately, many annual meetings remain, including gatherings for shareholders of Procter & Gamble(NYSE: PG) and News Corp.(NYSE: NWS) this month. The News Corp. meeting is likely to generate the biggest headlines for among the considerations is a proposed move from Australia to the U.S. The stakes don't get much bigger than that in business. If you own shares, you can help cement, or defeat, the decision. If you bother to get involved, that is. Take the time. Don't waste your vote.

Fool contributor Tim Beyers loves to vote in federal, state, and corporate elections. He owns shares in Oracle. You can view Tim's profile and other stock holdings here.

Discussion Board of the Day: Current Events

Do you consider yourself a liberal Fool? A conservative Fool? Yes, we have plenty of both and active forums for these and other political affiliations. So how do you think that this election will turn out? What is the key to winning it all next month? All this and more -- in the Current Events discussion board. Only on Fool.com.

A Truce in the Toy Wars?

By

Alyce Lomax (TMF Lomax)

It looks like Wal-Mart(NYSE: WMT) may deliver some uncharacteristic slack to some of its competitors. USA Today reported that the discounter giant doesn't plan such deep price cuts on toys this year. This should come as a relief to its competitors. But wait -- on second thought, you might be tempted to ask, "What competitors?"

I recently got an email from a friend on this very subject. She asked, "Hey, what happened to all the toy stores?" She and her sister had been talking about how hard it was to shop for toys for her new baby and her nephew, seeing how several of the old standbys have basically been removed from the landscape.

Flash back to last January. Last year, the holiday season, a time of joy and cheer for so many, left behind toy stores that had been beaten and bloodied by Wal-Mart and Target(NYSE: TGT). FAO Schwarz ran fire sales and shuttered its stores, including its Zany Brainy units. Privately held KB Toys was left fairly crippled, as it's currently in bankruptcy and has scaled back stores.

Even the once-mighty Toys "R" Us(NYSE: TOY)mulled over options this past summer, such as discontinuing toys altogether and spinning off its successful Babies "R" Us unit. To make matters tougher, the company has been involved in a skirmish with its Internet partner Amazon.com(Nasdaq: AMZN).

Indeed, now was likely the time that investors had probably started wondering about the coming holiday season and how it would shake out for Toys "R" Us, with less competition in the space but with Wal-Mart's continued trademark cutthroat pricing.

Now that Wal-Mart's easing up a little on price, mom-and-pop toy stores are likely breathing a sigh of relief (although it's arguable that the independents are better insulated against Wal-Mart's encroachment by their ability to carry unique, special assortments of toys, further enhanced by the more personal touch that a megastore can't give).

Although the challenges are by no means behind it, Toys "R" Us investors might be feeling some degree of relief right now. With so many competitors out of the running and signs that Wal-Mart may lighten up a little, perhaps the toy purveyor can improve its prospects this holiday season.

Alyce Lomax does not own shares of any of the companies mentioned.

Quote of Note

"Take calculated risks. That is quite different from being rash." -- George S. Patton

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