It has definitely been a huge business in the past and anyone who got in early has definitely enjoyed the ride to the top. But where are things going from now on? Not sure about N-America, but in Europe the sentiment (both legislative but also what people really think) is turning against smoking. Even in Asia where growth has usually been huge it's starting to calm down. Just today I let go of my position in Philip Morris international mainly due to those long term worries of declining sales and increased pricing competition. Aaand you can never forget about many of the governments (especially in the EU) who are all the time working on laws that will negatively affect the tobacco industry. So as of today I'm watching this from the sidelines. How about you?
I have always liked the better tobacco companies - the product is addictive, and the users tend to be loyal to one favorite brand. They also tend to pay nice dividends. As long as they're not doing anything illegal, I have no issue with them.
In America, there is a campaign going that is really getting some steam under it. The campaign is basically saying that smoking is bad and that nobody likes it. However, the strange thing about the entire endeavor is the fact that the big tobacco companies are the ones who are funding it. So it sounds to me like a reverse psychology type deal, and that they are now making more money off of the people who see these commercials and go out and buy a pack just to spite the TV.
So I guess what I'm trying to say is that I would invest in one, just because you would gain money, even if it is from the expense of another persons' well-being.
Ohh I've not no problems with that. Business is business, as long as it's legal I'm fine with investing into it. I'm just not sure if this particular industry will be a good investment anymore, it has certainly been in the past but times change.
I agree with you, but there is something about investing in something that is basically ruining peoples lives for 5 bucks a day.
A lot of people do feel that way. There are some investors who refuse to touch industries such as tobacco, alcohol, weapons or oil. But in the end, it doesn't really matter. When you own a share you own a part of that company but the money you pay for it (unless it's issuing new stock) goes to the investor who previously held the shares, not to the company. So by owning a company you are not doing anything to support them financially. In fact, due to being a shareholder you have the right to bring up issues at the annual meetings and to vote about certain issues within the company.
Although E-cigarettes seem to be taking off too. Even thought that doesn't fully satisfy the addiction, smokers are tricked into a placebo of thinking it does, because it stops cravings at least. I think that is a big potential future market.
But say you were to be a large shareholder and you were going to one of those meetings. You really cannot do hardly anything about the cigarette companies being less addictive or more health minded. Those points do not mean a single thing to them whatsoever.
I agree with you there. I have noticed, especially among the youth, that vapes and e-cigs are starting to flourish impressively. I would invest there rather than tobacco companies.
