Stocking Up on Sin

A one-of-a-kind guide to investing in vice industries
Although vices such as alcohol, tobacco, and gambling may be deemed socially irresponsible, in the investment world, these stocks continue to dramatically outperform the S&P 500 in this depressed market. Stocking Up on Sin shows readers how to get in on this hot investment trend and make the most out of publicly traded companies that deal with "vice" products such as coffee, weapons, alcohol, and tobacco.
Caroline Waxler (New York, NY) is a New York-based financial journalist. She contributes regularly to Worth and Glamour magazines as well as the Financial Times. She was also the ghostwriter for Worth's Greatest Stock Picks of All Time. Chapter 1: Why Vice Is Nice.

Chapter 2: The Ethical Dilemma and Asset Allocation.

Chapter 3: This Is Research?

Chapter 4: Tobacco.

Chapter 5: Gambling.

Chapter 6: Weapons/Defense/War.

Chapter 7: Booze.

Chapter 8: Sex.

Chapter 9: Drugs.

Chapter 10: Vice in Sheep’s Clothing.

Chapter 11: Pitfalls and Risk Management.

Chapter 12: Your Vice’s Future.

Chapter 13: Afterglow.

Appendix I: Returns of Socially Responsible Mutual Funds vs. All Other Mutual Funds as Well as the S&P.

Appendix II: Stocking Up on SINDEX.

Appendix III: The Titillating 20.

Notes.

Index.

CAROLINE WAXLER is a New York—based financial journalist. She has written for Newsweek, the New York Times, Financial Times, Business 2.0, SmartMoney, and Worth. She edited Worth’s Greatest Stock Picks of All Time. Waxler was a staff writer and columnist at Forbes, covering investments and the financial strategies of millionaires. No matter what reservations you might have about companies whose stock and trade is sin–gambling, tobacco, weapons, and the like–there’s no denying it: "vice stocks" are hot.

Historically, investments related to human weaknesses have been a safe bet–no matter how the market is performing. Over the last five years, vice-based investments have outperformed the S&P 500, earning a forty-two percent return, compared with a negative return for the S&P.

Welcome to Wall Street vice...

In Stocking Up on Sin: How to Crush the Market with Vice-Based Investing, financial journalist Caroline Waxler reveals the unique potential of vice stocks for investors. With a down-to-earth tone, witty style, and an emphasis on doing your own research, she expertly profiles these common "sin-dustries":

• TOBACCO
  How the decline in U.S. litigation impacts your investing strategy
• GAMBLING
  Why it continues to be one of the most stable industries in the world
• WEAPONS/DEFENSE/WAR
  Why investing in the defense/weapons sector is an effective long-term strategy
• ALCOHOL
  How the nation’s zeal for health and fitness is reshaping the product lines of alcohol companies–and what this means for your portfolio
• SEX
  How the combination of technology and titillation is expanding this practically recession-proof industry
• DRUGS
  An insightful look at the booming market for treating sexual dysfunctions

Stocking Up on Sin also uncovers hidden stocks, or "vice in sheep’s clothing," proffered by retailers like Victoria’s Secret. Along the way, this just-in-time book shows you how to manage risk by looking at any vice stock through a historical context, as well as the prevailing political and legal climate. And, in addition to helpful appendices and a sample portfolio at the end, the chapters feature a wealth of case studies, lessons that offer savvy tips based on new market trends and legal issues, and "shopping bags" that list each industry’s major players.

Whether you already have vice stocks in your portfolio or you are a vice-investing "virgin," Stocking Up on Sin shows you just how much fun–and how profitable–this often-overlooked area of investing can be.

Praise for Stocking Up On Sin

"Finally, in my old age, sex is paying off for me. Caroline Waxler’s book gave me many ideas on how to choose as close to a sure thing as you can in the stock market. I never thought that I and my entire family would benefit from Viagra and colored condoms."
–Joan Rivers

"Vice is nice when it comes to making big returns in the stock market. Caroline Waxler shows the investor the next great money machine. A riveting read and a revolutionary investment approach. Profit from it."
–W. Randall Jones, founder
Worth magazine

"An insightful and practical guide to the industries that many people would rather enjoy than invest in, this book will enable you to look at some of America’s most favorite vices in a whole new way. Besides being a fun read, Stocking Up on Sin will teach you how some bad habits can end up helping you to make some money. Both the novice and the experienced investor can pick up many helpful and profitable tips from this book."
–Chris Browne, Managing Director
Tweedy, Browne Company LLC

"Gambling, sex, drugs. . . investing in sin stocks could have you living like a rock star. Waxler delivers valuable tips and solid first steps for every investor looking to profit from the ‘dark side.’ A good, easy-to-read guide to making money from all things bad."
–The Motley Fool

"Stocking Up on Sin is highly readable and informative. It is a strong candidate for the best business book of 2004."—The Fort Worth Star Telegram, March 29, 2004

There's an old saying: the only way to win at gambling is to own a casino. Most of us can't afford one, but put your money in casino stocks instead of slot machines and you can enjoy some real winnings. Gambling and other "vice" stocks—in companies that manufacture or market tobacco, alcohol, sex or weapons—have done well in recent years.

That's the point of Waxler's book. As the author puts it: "Sin never goes out of style." Of course, making money on sinful stocks doesn't sit well with everyone. If you prefer politically correct funds, notes Waxler, "you're only reading this book for sermon fodder." But be warned: she may convert you. Her so-called SINdex, composed of 69 vice stocks, climbed nearly 42 percent in five years. At the least, investing in sinful stocks might make you feel better about the money you lose on your next Vegas visit.—MSNBC/Newsweek, April 19, 2004