Growing up in Florida, I am always aware of any impending storms. Because of this I use the website Spaghettimodels.com almost every day. Spaghetti models use atmospheric conditions to predict a storms path. There are different algorithms all over the world that try to come to the same conclusions, so the grouping of their analysis usually leads to a general idea of a storm’s path.
For years I have been compiling a “Hurricane Watch List” that I share with every subscriber at Simpler Stocks. This list is composed of stocks that will be influenced by a hurricane, and include stocks such as Home Depot (HD), Lowe’s (LOW), and some insurance companies. By doing research going back at least 25 years, I have found that the stock that moves the most with an impending hurricane is Generac Holdings (GNRC), the maker of generators. In Hurricane Sandy, the stock went from 25 to almost 40.
With Hurricane Matthew forming off the coast of Africa, I followed the spaghetti models closely. As seen, at first the storm looked like it was going to miss all of the U.S. However 3 of the studies gave it a chance of hitting Florida. GNRC started perking up at this time. Note the volume increase.
As seen , on October 4th, the spaghetti models shifted west putting Florida and the entire Northeast in plain site of the hurricane.
The threat of a major part of the U.S. without power sent GNRC sharply higher.
Late in the day, however, the models had shifted, showing the Southeast in the path, but the Northeast out of danger. This proved to be the top in GNRC, and also the highest volume bar of the entire move.
Every year, using spaghetti models helps me prepare in time for storms. Plus, it can help you make money in stocks that could be influenced by these types of weather events.