The wildfires currently raging in California have decimated thousands of acres of land, including homes and businesses. Around 100 people are still considered missing. That is simply a catastrophe, and at Young Research & Publishing we thank the first responders trying to stop the blaze, and hope the missing are reunited with their families soon.
Possibly to blame for the fires is PG&E, the power utility for much of California. The utility reported a power outage in the area shortly before the outbreak of the fire known as the Camp fire (there are multiple major blazes occurring simultaneously in California right now).
Shares of PG&E’s stock have buckled under the potential for liability.
The moral of the story for investors is diversification. Despite PG&E’s status as a “widows and orphans” utility stock, it has encountered a potentially bankrupting catastrophe. Investors with portfolios lacking diversity could be at risk if one of their larger positions was hit with a similar unanticipated crisis. That’s why diversification is vital.
