We are almost certain to continue to suffer from major natural disasters such as fires, floods and a variety of windstorms, including hurricanes and tornadoes. Politically driven debates over the causes and expensive proposals that are unproven may, in the end, do little to alter the course of these natural phenomena.
Investors should recognize that actual progress toward preparedness, largely because the issue is highly politicized, is very unpredictable. Some of us may subscribe to the Ben Franklin school of thought, “an ounce of prevention is worth a pound of cure.” While many others are more in tune with Queen’s lyrics, “I want it all and I want it now.” Consider the continuing political debate over defense budgets versus social programs.
Any effort to address the preparedness issue should consider the fact that many weather-related disasters are recurring and highly predictable, some even have names. Perhaps decision makers should remember a quotation, generally attributed to Albert Einstein, who reportedly said, “insanity is doing the same thing over and over again and expecting different results. This should give pause to politicians who like to promise to build back and build better again and again.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA
