Data · 2001–2026 · 91 earthquakes
In Japan there is a long-standing belief that shares in construction and disaster-prevention
companies jump right after a major quake. I checked whether that is true, using
91 earthquakes of JMA intensity 6-lower or above between 2001 and 2026
and the actual daily prices of 10 related stocks.
Short version: the spike is real. Capturing it turned out to be a different question.
Prices: Yahoo Finance daily bars (checked for splits) · Earthquakes: JMA "major damaging earthquakes" and tenki.jp
Gain from the prior close to the intraday high on the first tradable day after a quake, averaged over 16 events. A longer red bar means a bigger reaction.
The split is sharp. Ground-improvement and soil-survey firms move a lot; makers of emergency supplies barely move at all. Teikoku Sen-i (fire hoses) and Morita Holdings (fire engines) sell more after a disaster, yet their share prices hardly respond to the quake itself.
Darker means a larger rise. "Reaction day" is the first day the market was open after the quake.
What the averages hide.
This was the clearest finding. 98% of the gain occurs in the gap between the prior close and the next morning's open. From the open to the close the average is −0.05%, essentially flat.
In other words, reading the news in the morning and buying is already too late. And large earthquakes tend to strike at night or on weekends, when the market is shut. The Tokyo Stock Exchange trades only 9:00–11:30 and 12:30–15:30 on business days.
On the first session after the 2011 Tōhoku earthquake, Fudo Tetra's open, high, low and close were all 910 yen — locked limit-up, with volume down to 30% of the prior day. Orders simply do not fill. The day it rises most is the day you cannot get in.
Stocks bought on earthquake news underperform the Nikkei by a median of about 2.9% over the following 40–60 sessions (359 observations, statistically significant). A control sample of random dates for the same stocks over the same period does not show this, so the effect is specific to earthquakes.
This matches the finance literature. Chan (2003) finds that positive price shocks accompanied by news tend to reverse, and Barber & Odean (2008) find that individual investors are net buyers of attention-grabbing stocks, which subsequently underperform. Chasing a spike tends to cost you over the following months.
The phenomenon is real. I could not find a way to extract a profit from it. Once you price it the way you would actually trade it — at the moment you can realistically buy, at the price you would actually pay — the edge is eaten by transaction costs.
For reference, over the same period simply buying the Nikkei 225 and holding it returned +438%. Trading around each earthquake does not come close.
This is a common misunderstanding, so let me be explicit. Buying a share on an exchange means buying it from another investor. Your money goes to whoever sold it. The company receives nothing. Companies raise money from the market only through an IPO or a new share issue.
"Buying the related stock to show support" is an understandable impulse, but it does not function as support. If you want the money to arrive, there are routes that deliver it.
Check the recipient's official site for the collection period and how the funds are used. Fraudulent appeals appear after every disaster.
How the test was run, and analysis left out of the public version.
All stocks move together on the same earthquake, so counting per trade destroys independence and inflates significance. Everything is aggregated as one earthquake = one sample. Results are then split into training (2001–2016) and validation (2017–2026), re-checked with the 2011 Tōhoku earthquake and its aftershocks removed, and compared against a control sample of random dates for the same stocks.
Many apparent improvements evaporated under that treatment. Fudo Tetra's 67% win rate fell to 45% once the data went back to 2001; an "M below 6.5" filter scored 78% in training and 51% in validation. Pick the period, the tickers and the parameters, and you can manufacture any number you like.