Flu pandemic: what stocks to buy and sell short ?

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An interesting radio programme on BBC Radio 4 tonight explained some of the chilling background to the current swine flu epidemic.

Worryingly this is the second one: didn't you hear about the first one in the US ? Public health officials are worried that the massive factory sheds that house thousands of hogs may be the source for new variants of swine flu simply because that's what you get when you keep large numbers of one species together in a very limited space.

Of course the farmer said: "Don't worry - we have good bio-security", and the national federation of massively factory-farmed pigs (or whatever they're called) said something like: "There's no evidence the swine flu virus came from one of our factory sheds".

Amazing then that a worryingly new form of swine flu, that had the US animal health people real worried, spread quickly through many US herds, travelling on boots, implements and in the trucks used to transport the animals, fortunately killing only pigs that time, not humans.

You can listen to the audio of the programme for about a week usually (when it may be taken down) at:

Audio for File on 4

or read the summary at this webpage:

Are pig pens flu bug incubators?

There are two particularly worrying aspects to this story:

1) massive hog factories exist in the US, where the pigs are born, breed and die on slatted concrete floors, and the US has no central co-ordinated health system for humans, unlike other countries, and so its health system is not designed in a way that could prepare for a national flu pandemic; and

2) the last major flu pandemic in 1918 started like this swine flu pandemic: there was a mild outbreak in the spring preceding the devastating later effects in the following winter.

The UK has stockpiled anti-viral drugs so that 1 in every 2 people could receive free treatment. Most ordinary flu outbreaks affect 1 in 10 people, but in pandemics up to 1 out of 2 can be affected.

So which stocks should we buy ? Maybe follow Josh's lead and determine the pharmaceutical companies that either manufacture or distribute in the US the two anti-virals that are being stockpiled by governments in the UK and France (Tamiflu is one of them, I think), ready for their sales to rocket in the US as large numbers of patients themselves make the individual purchases ?

2 anti-viral drugs

And dare I say it? Invest in corporations that arrange funerals, own crematoriums, and manufacture or distribute coffins.

What about life insurance companies? Will they go bust with all those payouts in one single financial year? So would they make good stocks to sell short?

What about health insurance companies - would they prosper or fail? Do they have built-in protection because they only keep paying-out for only a limited range of medical conditions (including flu?) until your entitlement has been spent, and then the hospital packs your bags and politley asks you to leave the building?

Oh, and one other thing: book a long vacation in, say, Hawaii for next winter if you want to be able to spend the profits from those canny stock-picks, and also have a pack of Tamiflu or Relenza in your pocket when you land.

And all because we want cheap pork.

KC