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When Disaster Hits, Buy This Stock

Motley Fool contributors Jason Hall and Taylor Carmichael and analyst Auri Hughes had a great discussion on The Five about "disaster" stocks. What stocks are powerful when the world is falling apart? Taylor put forth his favorite stock for when disaster strikes: Home Depot (NYSE: HD).

This discussion was recorded live on Aug. 31.

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Jason Hall: Hurricane Ida, man. The first thing, we talked about it yesterday. My heart goes out to anybody that's being affected by this. I've got friends, we've got Fools in New Orleans that are affected. Yesterday, we talked a little bit about the actual physical planning for disasters and emergencies and thinking about managing your money to deal with emergencies. What I wanted to focus on today, Taylor, I'm going ask you to kick us off here. And I want to be careful, too, because I don't want this to sound like it's vulture companies -- companies taking advantage of others' misfortune. But just thinking about investments that can either help people prepare financially, or to recover, but also have bigger secular trends that can make them great investments. Taylor, go ahead and kick us off there.

Taylor Carmichael: Well, Home Depot is the one that jumped into my mind. There was an article in [The New Yorker] a few years ago called The Really Big One. It's about an earthquake that one day will take place in the Pacific Northwest and how it's going to just devastate our country. And they know it's going to happen, they just don't know when it's going to happen. It's the scariest article I've ever read in my life, and it just talks about all the flooding and the tsunami. It's actually the tsunami that's worse than the earthquake.

Jason Hall: Right.

Taylor Carmichael: After I read that article, I was like, oh, my God. It would destroy Microsoft, Seattle, Amazon, it would just be horrific. One of those horrific in-a-lifetime events, and I was like, OK, how do you rebuild the society? Rebuild a world when things fall apart like that?

Jason Hall: You just go to Home Depot. Yeah.

Taylor Carmichael: Home Depot, if you have any bad event that happens like that, natural disaster, I think that's the absolute strongest stock, and it's been a wonderful long-term stock for Fools for decades. But Home Depot, just a powerful company, a powerful brand, and it's the great rebuilding stock. I don't own it myself, but I respect it. It's just a wonderful company. And my family does own Lowe's (NYSE: LOW), I guess, and Lowe's is very similar to Home Depot. And those are like Coke and Pepsi, so whoever you like more, I guess.

Auri Hughes has no position in any of the stocks mentioned. Jason Hall has no position in any of the stocks mentioned. Taylor Carmichael has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Home Depot. The Motley Fool recommends Lowe's. The Motley Fool has a disclosure policy.


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