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Investing In The Sin Bin: Are 'Vice' Stocks Like Tobacco, Booze And Casinos Smart Bets?

Submitted by Marijuana News on Tue, 05/19/2015 - 05:57

Does morality matter in investing? Put another way, can amorality pay off?

Gerry Sullivan thinks it can. He manages the $298 million Barrier Fund (formerly known as the Vice Fund), which specializes in the types of stock that get a bad rap from morally-conscious investors and institutions.

Four of Sullivan’s top five holdings are in tobacco companies, and for all the hand-wringing over the health hazards of smoking – and the massive settlements the companies have coughed up – he still thinks the stocks are among his best bets.

“You can’t just start a tobacco company,” Sullivan says, pointing out the wide moat enjoyed by the industry’s established players. While they undoubtedly face increased scrutiny, he’s fairly sanguine about their future and the potential market share threat from e-cigarettes.

“When you take a universe and start excluding for something that has nothing to do with investment theory, you’re using biases of exclusion...

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URL: 
http://www.forbes.com/sites/steveschaefer/2015/05/18/investing-in-the-sin-bin-are-vice-stocks-smart-bets/

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