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Time To Buy Stock In Gambling, Alcohol & Tobacco Companies.

You know what always does well in down times? Vice. Since things are looking like they are only going to get worse for the foreseeable future, now might be the time to start buying stock in casinos, cigarette makers and distilleries, no?

When it comes to investing there is no proof that being a “goody two shoes” increases total return. In fact, if you try to inject your conscience into your investing, don’t be surprised if you miss out on some great returns. Just check out the Vice Fund (VICEX), which focuses its investments on companies dealing in alcohol, weapons, gambling and tobacco. ..So-called sin stocks tend to be recession-proof because no matter the economic environment, demand for things like booze, cigarettes and casinos typically holds steady. The following attractively priced sin stocks may not make you feel good about yourself–until you look over to the gain/loss column of your brokerage statement.

I guess I should take some of my money (what is left of it, that is) that is invested in renewable energy/green stocks and pour it into Altria, Seagrams, MGM Grand or Harrah’s!

Hard times won’t stop gamblers from betting, partygoers from drinking and smokers from puffing. In fact, economic turbulence might give them even more reason to indulge. That makes so-called sin stocks, or shares of alcohol, gaming and tobacco companies, a safe bet as the U.S. economy slows.

Nothing like investing in stuff that actually can make people sick and poor, right? Your 401K was wiped out? Why not take any pennies you can find under your mattress and go gamble it away! You could win big!

We all have our vices. Why do you think stocks like McDonald’s and Coca-Cola are always top defensive picks? When the economy turns sour, we need our vices more than ever. That’s why every investor needs to call his broker and buy shares of Altria Group, the company behind Marlboro cigarettes, Copenhagen chewing tobacco, many brands of fine wine, John Middleton cigars, and it even has a 28.6% voting stake in SABMiller, the owner of Miller brand beers.

Fun! Our society as a whole does not want to help take care of people who need it, but enjoys investing and making money off of cigarettes, alcoholics and gambling addicts – who then end up needing the very help we don’t want to provide in the first place. Back. Wards.

Regular readers might have noticed that I am starting to inject a lot more opinion into my posts as of late. I do hope you stick around and can appreciate my honesty & open-ness, but if you don’t and want to bail, it’s cool with me – I understand. After almost two years and over 1,000 posts, I wanted to shake things up a bit and share a little more of my personal opinion rather than just talking generically about saving and getting out of debt each and every day. That stuff will still have a home here, as I truly enjoy offering my advice & writing about the things that affect all of us, but I want to explore opinions a little more on the site.

I think this direction makes the site a little more interesting and can open up more discussion between readers, whether you agree with me or not. Also, I want you to know that I can appreciate any dissenting opinions and/or guest posts – as long as it’s clean and the argument is not insulting in nature, I welcome all of it.

But for now, I am taking the rest of the day off to attend an Obama rally and then have a nice dinner out for my anniversary. Enjoy the ride.


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Comments (18)

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  1. Emily says:

    Happy anniversary, David! Enjoy the rally too.

    I, for one, enjoy a little more opinion and less just publishing what’s happening. I like the shake up 🙂

  2. Vice is nice… so they say. I’ve owned a few “sin stocks” these for years and they’ve always provided some stability in a crazy market.

    Might want to check out Phillip Morris International (PM) or Diageo (DEO). Nothing like a cigarette and few drinks to relax you after a bad day, and these two are leaders in those spaces.

  3. Shell says:

    Opinion is great. I enjoy the blogs that have opinions in them more than just generic discussion.

    Happy anniversary!

  4. Laura says:

    Hi David,
    I love the commentary — keep it coming!

  5. David says:

    Thanks guys, appreciate it!

  6. thinkingthing says:

    There’s ranting on solar stock boards about how green stocks will benefit from an Obama tenure. There were definitely some deals to be had earlier this week when the sector was painfully slammed, probably due to Lehman Bros complications and, you know, lemming-style panic.

    Obama’s campaign mailed me a t-shirt for some reason. So I’m voting for him. Unless, of course, McCain sends me two t-shirts.

    As for sin stocks, SAM is flying high, and best of all, it’s the last (public) American beer left standing. The Octoberfest brew is particularly excellent, if you want to do some “product research” this weekend. Cheers!

  7. cwaltz says:

    Well I enjoyed the rant all the way up until you said Obama. LOL. Ironically enough, I consider myself a liberal but can not see myself voting for someone who steals votes to win a primary(4 delegates from Michigan where people actually voted for Clinton). Heh, nor can I bring myself to vote for a candidate that equates providing health care for everyone with making them choose between rent and health care(Harry and Louise ANYONE?). It’s hard to believe we even call the guy a Democrat. Then again, maybe after he takes office he can switch parties like he switched on FISA. Yuck. I call myself an Independant just because I don’t want anything to do with the banana republic crew that seems to be running the DNC. Oh and when you are doling out blame for this mess make sure to include the post office namingest bunch of Congressmembers we have right now(Oh wait they did manage to condemn the FIRST AMENDMENT rights of a political PAC, call the Iranian guard a bunch of names for doing what we and the Saudis are also doing, and send out a couple of sternly worded letters right after Pelosi ceded her constitutional responsibility as a check on Presidential power, heh, she might have well have given him a signed permission slip when she said she would not impeach). You did say you wanted opinions. Well, there you have it.

  8. […] Time To Buy Stock In Gambling, Alcohol & Tobacco Companies – When times get tough, people can seek help from things such as alcohol and gambling. It isn’t always pretty, but it can bode well for companies that produce these products and services. […]

  9. Jerry says:

    Money in vice stocks? Ummm… no thanks. I’d rather find better ways to invest my money. There’s no insurance for any stock so I’ll take my chances on something else. Green companies are on the rise and I’d like to invest in something that will lead to positive change.

    Jerry

  10. Hello. I was a Casino Manager for the best part of a decade, and I can assure you that Gaming is NOT recession proof.

    In fact, you’d be amazed by how much the gaming industry has relied on the withdrawal of equity from the rising housing market over the last decade. I’ll wager that some of the UK companies will be hit hard over the next 18 months.

  11. Jon says:

    LMAO. I was thinking the same thing as I was headed home from work the other day. I recall the last couple of stock market declines ’87 and ’01 being better for the sin industries than one would expect, and had about decided to buy some Anheuser Busch stock. I’ll have to look at the industries and stocks to make an intelligent pick, but something tells me many will be drowning their sorrows in the coming months.

  12. Anonymous says:

    Typical financial advice. Let’s start adjusting to a downtime AFTER it has already happened (even though the probably of stocks going up is it’s highest at that point). Buy high and sell low (http://www.retro.ms11.net/InvestorMind.gif) is what most people do. True investors make money in the bad times because they already had a portfolio setup that is adjusted to their risk tolerance for good and bad times.

  13. Anonymous says:

    Also, I sound like an idiot in my previous post because I didn’t check my spelling 😉

  14. […] favourite response to the economic downturn is that of My Two Dollars, who suggests that this is a time to buy stocks in gambling, alcohol, and tobacco companies. It looks like Mr. Cheap at Quest for Four Pillars did alright with his Rothmans shares, now that […]

  15. Congrats on shaking things up a bit and getting personal! It’s a good way to make a great debate!

    I also wanted to say great post. It is interesting that in the most difficult of times, people still do fall back on the comforts of a vice – no matter how much sense it does not make. Interesting to think that people would fare well by investing in other people’s failures…

    Best wishes to you!

  16. […] With economic times shakier, it’s important to invest in something lasting. I like indexing because that’s essentially buying the market. David of My Two Dollars asks if it’s Time to Buy Vice Stock? […]

  17. david says:

    Anonymous – you missed the point of the article. Did you read all the way through? I said how ridiculous it is to invest in that stuff…

  18. Ulysses says:

    I actually missed the opportunity with ford, aig and other well known companies that are now blossoming.

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