Do you have morals when you invest?

[DrXenon]

The vast majority of those lawsuits have been decided in favour of the tobacco companies. Volenti non fit injuria. The comparison with Nortel is asinine so I won't reply further.

[Cerenity]

there are always "evils" in this world. some ppl consider tobacco an evil. some consider oil and gas drilling evil
to some even healthcare companies are evil. some consider capitalism evil, so you may as well not invest then...

[netriones]

I used to think as many peole think that pirating movie/software/music online is natural and it's okay to do so but I realized it's still theft. There're fundamenal truths that won't change no matter what people "think".

[Sanyo]

I understand people's qualms about investing in liquor, ciggies, etc but if they are legal to sell and people have vices for it, why can't i profit from it? If its bad for everyone, the government can ban them instead of me thinking its bad and standing up to it.

My best performing stocks the last few years have been sin stocks: Philip Morris (PM), which is strictly emerging markets so it has no exposure whatsoever to the Liitgious States of America.

I also own liquor stocks Beam (makers of Courvoisier, etc), Brown-Forman (makers of Jack Daniels, etc) and Ambev/Busch (makers of Bud, Stella, etc). I also own Liquor Stores on the TSX (LIQ).

They print money and thats what investing is all about. People aren't giving up alcohol and the number of people smoking is growing around the world.

[CRAZYBUBBA]

The biggest problem with the Tobacco companies are the recent lawsuits brought on by governments for health care costs. So far they have only seen the tip of the gigantic iceburg. It could totally bankrupt these companies. Ontario alone has a 50 billion dollar lawsuit in progress, and that is ONE PROVINCE out of 9 others, then you also have all of the states, and then also Europe.. all it will take is ONE government winner to set a precedent, and once the other governments smell blood in the water, it will be a feeding frenzy until nothing is left.

If there's a cash cow, different parties will milk it. However, no one is stupid enough to kill the cow.

[sper17]

I own shares in a Canadian oil company producing/drilling in Nigeria right now. I like the huge returns I'm getting, but I know the majority of the profits are leaving the country and not helping locals at all. At least with my Canadian producers I know where the money comes from and how the profits are being spent. There are other industries that I won't invest in, but I typically buy companies I like and understand their business.

[Sauerkraut]

Nope. no moral compass. You can spin your conscience any way you want, but if it's being traded on one of the major bourses, I'll consider investing in it.

I held Rothman's for many years until it was bought out. ROC used to give out special dividends on a regular basis, in addition to the quarterly payment. It was solid...like a rock!

[virgilaug]

There are no morals in business.

[brunes]

The vast majority of those lawsuits have been decided in favour of the tobacco companies.

I don't know how you can say that when there has not been one yet.... I am referring specifically to lawsuits by nation-states to recover costs for medical expenses from tobacco.

Volenti non fit injuria.

Does not apply in this context since it is not the user who is suing.

The comparison with Nortel is asinine so I won't reply further.

Actually it is quite appropriate. You bring up some company who has had great performance for the past 10 years and thus extrapolate that out to having great performance for the next 10, with no context whatsoever. See Nortel in 1999 or RIM in 2007.

[dcyeung]

People choose to smoke or drink. I'll gladly make money off them.

I'll take some of that money and donate it to starving kids in Africa.

How's that for morality?

Kevin O'Leary, is that you?

[DrXenon]

Actually it is quite appropriate. See Nortel in 1999

I have forgotten more about Nortel than you will ever learn, because I designed the switches you are using to post your wisdom there and had stock options "worth" more than you will make in your lifetime. The P/E on the stock was 125 and the book value multiple was 11. The beta on Reynolds is 0.6, and it has a perfectly sustainable dividend, they are two completely different animals. People have been making your argument about tobacco stocks since long before 1999, and the doomsayers have shown only that they have very poor predictive powers.

The fact is that stocks that issue sustainable, increasing dividends over a long period are the best, safest investment you can make. Something close to half of the gains you can get from the market over the next couple of years will be due to dividends from companies exactly like Reynolds.

[brunes]

The fact is that stocks that issue sustainable, increasing dividends over a long period are the best, safest investment you can make.

Right.. like Pengrowth Energy, who increased their dividend at a nice steady sustainable pace for almost a decade.. then just recently fell apart???

I don't know how many ways or times I can say it - past performance is irrelevant when there are new risk factors at play. Fundamentals are always and will always be the most important.

[DrXenon]

If there are new risk factors at play, and you do not consider the dividend to be sustainable, then you do not invest in the stock. Me, I think you could do far worse than invest in a company whose customers are somatically addicted to the product and are extremely brand loyal, this is the definition of sustainability.

[brunes]

If there are new risk factors at play, and you do not consider the dividend to be sustainable, then you do not invest in the stock. Me, I think you could do far worse than invest in a company whose customers are somatically addicted to the product and are extremely brand loyal, this is the definition of sustainability.

The dividend will not be sustainable if even a tenth of the pending lawsuits succeed.

[brian.gerson]

The dividend will not be sustainable if even a tenth of the pending lawsuits succeed.

If you prefer risk-free investments, brunes, I'm sure your bank can hook you up with a nice GIC. I hear you can get as much as 2% with those.