Terrorism and Investing

SpeakEasy · #1 04-05-2007, 01:25 PM

Immediately after 9/11, the markets dropped drastically, but recovered.

I have assumed that another major terrorist attack in the U.S. is inevitable, that it will be roughly on the same scale as 9/11, and it will have the same immediate but temporary effect on the markets. The only question, in my mind, is when it will happen.

A person could hold a significant chunk of cash in reserve for just such an event, to invest immediately after another attack.

Is this wrong?

eviljeff · #2 04-05-2007, 02:54 PM

I don't know what you're basing your assumption on. The government has been saying "it's only a matter of time" since '01. They want to keep you in fear so that you'll keep them in power and let them take away your rights and money.

SpeakEasy · #3 04-05-2007, 03:07 PM

The point is not to debate the accuracy of my assumption, but the nature of the investing strategy that might result from the assumption.

DannyOcean_ · #4 04-05-2007, 03:32 PM

I do not think it is wrong. Some people may even applaud you for 'helping to recover the economy'. If Bill Gates announced the day after a bombing that he was investing an extra 1 billion dollars in our stock market because he was so confident and wanted to help drive the market forward, people would call him a saint.

So it really depends how you look at it. I don't think there is anything intrinsically wrong here.

ALawPoker · #5 04-05-2007, 03:34 PM

Wait, you assume 9/11 was a terrorist attack? Obviously the buildings were struck down by lasers.

JK, yes that more or less makes sense. But I don't think it's quite as simplistic as the way you present it. If there were another attack of a 9/11 scale, not to downplay how bad that'd be, but the market effects will be less and less for every subsequent attack. The reason the market dips is mostly panic, and not anything innate to the actual value of the stocks (as you seem to understand). So keep in mind the "fear factor" will not always be quite what it was on Sept. 11 as people become more conditioned to it (assuming that continuing attacks are inevitable, as in your OP).

And I'm not sure exactly what you mean by "keeping cash in reserve." If you mean just sitting in a savings account, then I really doubt the equity you'd give up by not having that money in the market would be worth the gain you'd make.

Any time a stock artificially loses value is usually a good time to invest in it. So I agree that the time following a major terrorist attack is probably one of these times. But the logistics of planning for it just don't really add up, imo. If you happen to have money lying around, sure throw it in. But I wouldn't lock up any funds for the sole purpose of waiting for this opportunity.

nineinchal · #6 04-05-2007, 04:16 PM

It will happen the first opportunity the terrorists get to inflict significant damage.

That could be today, tomorrow, a week, month, year, or a decade from now.

When they do it, wait a few days and buy Halliburton (HAL)or
Or Elbit (ESLT).

blackize · #7 04-06-2007, 12:32 AM

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It will happen the first opportunity the terrorists get to inflict significant damage.

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That's ridiculously untrue. There are a ton of these opportunities every day.

ChicagoRy · #8 04-06-2007, 01:14 AM

[ QUOTE ]

JK, yes that more or less makes sense. But I don't think it's quite as simplistic as the way you present it. If there were another attack of a 9/11 scale, not to downplay how bad that'd be, but the market effects will be less and less for every subsequent attack. The reason the market dips is mostly panic, and not anything innate to the actual value of the stocks (as you seem to understand). So keep in mind the "fear factor" will not always be quite what it was on Sept. 11 as people become more conditioned to it (assuming that continuing attacks are inevitable, as in your OP).

[/ QUOTE ]

Would some sort of nuclear device smuggled in and set off in a major metropolitan area be enough to cause a panic? I think the difference between something like this and a bomb blowing up a plane or a bus would have more impact on the markets compared to which number terrorist attack this is.

Phil153 · #9 04-06-2007, 01:51 AM

[ QUOTE ]
It will happen the first opportunity the terrorists get to inflict significant damage.

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Funniest post on this forum. If organized terrorists wanted to hurt us, it would be so fricking easy. Use your head, man. This is the Sklansky forum.

OP: Many of today's upper class are the children and grandchildren of people who exploited war and strife. You'd be in good company.

As far as trading goes, provided you're not gaining unfair advantages, and everyone has access to the same opportunities you do, then you're doing nothing wrong. In fact, you're acting to stabilize the market that the idiots and risk averse are destabilizing.

disjunction · #10 04-06-2007, 08:32 AM

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Funniest post on this forum. If organized terrorists wanted to hurt us, it would be so fricking easy. Use your head, man. This is the Sklansky forum.

[/ QUOTE ]

This is not clear at all, that an act could be currently committed that has more effect than what they are doing overseas. Furthermore, committing a hurried act could damage their network, and ruin their chances of committing future, larger acts.