Stocking Up on Sin: How to Crush the Market with Vice-Based Investing

“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

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.