Perverse profit



By Rob Rose and Jacqui Pile

As stocks take a beating globally, distressed investors and consumers are turning to alcohol, smoking, gambling and sex – and not just for pleasure. All evidence shows that these sin stocks are the place to be on the JSE for anxious investors
 In 2001 during the downturn,Tom Galvin, chief investment officer at Credit Suisse First Boston, set out to study how the wicked corner of the US market – the “vice stocks” of alcohol, tobacco and gambling – performed after the economy had plunged into recession.The result was intriguing. Galvin’s “vice squad” rallied during each recession, particularly in 1982 and 1990. “I was amazed to find that many of these industry groups tend to be beneficiaries of the mere flaws of human character,” Galvin said in Caroline Waxler’s how-to book for vice investing, Stocking up on Sin. “It turns out that demand for drinking, smoking and gambling remains pretty steady and actually increases during economically volatile times.” 

 

continue reading at………………..http://free.financialmail.co.za/08/1024/cover/coverstory.htm

 

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