Sex and the City
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This genius investor does dizzying levels of research to uncover...Half Price Shares!
Last night, we marched home from the office in such a contemplative funk that we were practically run down by a double-decker on its way to Islington. We were walking through Soho… doing a little independent research for today’s issue.
“Come on in… you’ll like what you see…” beckoned a woman dressed in an office costume, possibly targeting the out-of-town businessman. Bookstores lured us with “Super Sex Videos… 18 or older.” Bars opened their doors to us. Casinos and gaming parlours flashed their lights like Lorelei.
And out on the street, people stood around with beer in their cups, cigarettes between their teeth, time on their hands and money in their pockets.
When economies go soft, financial experts counsel investors to switch to ‘defensive’ positions, of which ‘vice stocks’ are a favourite.
A man needs a well-developed vice. One he can be loyal to. Otherwise, he is easy prey to every fad that comes along. If he is a womaniser, for example, it is hard for him to take up the bottle with a firm resolution.
As soon as he begins drinking seriously, his girlfriend dumps him. She’s not about to share.
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Nor is heavy gambling compatible with heavy drinking. A drunk is wiped out too fast; he never gets a chance to develop a serious gambling addiction. No, a man has to find a vice that suits him and stick with it. And, when the economy goes sour, he doesn’t give it up. Instead, he drops his fair-weather spending and his sunny-day stocks. By comparison, the ‘vice industry’ does pretty well. Business doesn’t slack off. And stock prices hold up.
So is this the time to buy vice stocks? Well, not necessarily, says John Stepek on page 22. Tobacco, liquor, sex and gambling companies are no bargains.
There’s more to money than money, of course. People buy stocks for many reasons, only some of which have to do with making money. Many investors just don’t want to be embarrassed by having kooky or risky holdings. Some want to feel avant-garde, by buying the latest technology companies. Others want to support products and causes that they like.
Broadly, people seek money because money buys status. But they have to be careful how they get their money. Who wants to tell his neighbours that he makes his money by exploiting slum tenants or online gamblers?
But as the public’s money has slipped and stretched, so has its sense of propriety. Today, a man says he has bought an online pornography company with the same pride as he announces his daughter’s first birthday. Which means the prices of ‘vice’ stocks are not as low as you might think. Wait for a downdraft in the stockmarket… or an updraft in hypocrisy; then, it will be time to buy.
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