Vice Investing?

[Hunter]

Many mutual funds stay out of 'vice' stocks such as gambling, alcohol, cigarettes and defense companies.

Do you guys think that is a waste of time? Vice stocks usually do pretty well - is there a moral issue taking a profit from them?

[Dave]

A lot of people are offended by 'vice'. Where I work we have a number of clients who have restrictions preventing us from investing in companies with ties to birth control, tobacco, gaming etc. For the most part these clients are faith-based organizations. Other clients who tend to avoid 'vice' are public entities (state/county investment funds). Larger public company type clients may restrict as well, that's mainly because they most likely will be publicly disclosing where their investments are, and how they derive their profits.

Personally, I don't have a problem with these kinds of investments, but appreciate anyone's right to have a problem with them. When I invest, I'm investing for me and my future, sure there are companies out there that I'd prefer not to invest in, but I'd be foolish not to at least look at them.

[LV Terry]

Originally posted by Hunter:
Many mutual funds stay out of 'vice' stocks such as ...... and defense companies.
pssst.... hey buddy, know where I can get hooked up with some National Defense? I'm jonesing BAD!!

[RamBill]

Terry, what you looking for? I got some General Dynamics for 40, United Technologies at 70 and some Lockheed Martin at 25 (not so great but they get the job done). If you can hang on I might be able to score some Raytheon for ya. graemlins/biggthumpup.gif

[LV Terry]

I need it bad Billy, whatever you got... there are a lot of bad people out there, and well, vice or not, sometimes you just gotta protect yourself and the ones you love.

[abner2xday]

As a investor, here are the problems I have with casino stocks:

1) debt/equity level tends to be high
2) Inventory levels (hotel rooms) are static and subject to high price fluctuations.
3) I tend to shy away from regional stocks as the ability to expand to into other markets can be expensive and difficult.

[Habanaman13]

I had some negotiations with my company's 401(k), 403(b) company today. The Rep was talking about this Vice fund. He thought it's symbol was VICEQ, but I have not had a chance to look into it further. I was intregued to say the least. I would not add it to my company's offerings (We are a human service company and folks were sadened that we had to stop offering our socially conscience PAX fund) but it sounds like somthing I might be looking into myself. You know Warren Buffet's strategy, only buy what you know. Anyone know if the Crazy Horse Too is considering an IPO? graemlins/wink2.gif

graemlins/wiggle.gif T-220 graemlins/wiggle.gif

[Hunter]

For those into vice, there is a book I read called 'Stocking Up on Sin'.

http://www.amazon.com/exec/obidos/tg/detail/-/0471465135/102-5000201-6323325?v=glance

It basically details each vice industry...

Gaming stocks are pretty speculative. One possible exception might be Harrah's which is extremely well diversified geographically and seems very focused on the fundamentals vs. some other companies with spend happy developers at the helm (can you hear me steve?).

[sanonofresurfer]

Hunter-
I'm a big fan of the "Vice Fund." It's only been on the market for I think 3 years, but each year it's outperformed the S&P 500. As soon as I get back from my 6 month deployment and have the $2500 for the initial buy in, I'm there.

Hunter wrote "Many mutual funds stay out of 'vice' stocks such as gambling, alcohol, cigarettes and defense companies.
Do you guys think that is a waste of time? Vice stocks usually do pretty well - is there a moral issue taking a profit from them?"

Let's see, I drink, smoke, gamble, and I'm in the Navy. If I invest in the Vice Fund, aren't I just paying myself back?

The theory behind the Vice Fund is that if the economy takes a dive, people aren't going to quit drinking, smoking or gambling. That's why the Vice Fund invests in Anheuser Busch, Lockheed Martin, Harrah's, etc. 25% is invested in alcohol, 24% in defense companies, 19 in gambling, and 18 in tobacco.

The Mutual fund symbol is VICEX, and the web page is www.vicefund.com

Maybe someone with more market savy can enlighten us if I'm mistaken.