Profits from disaster

Hurricane Katrina ravages New Orleans. Meanwhile, the latest strain of avian flu breaks out in Asia, leading some commentators to predict dire consequences. Is there anything investors can usefully do to protect themselves against – or even profit from – such disasters? The short answer is no. Start with natural disasters like Katrina. They are big events in local economies, but they hardly register on the national economic scale. The biggest insurance losses in the last 35 years were causes by...