“Opportunity often comes disguised in the form of misfortune, or temporary defeat.” – Napoleon Hill
Is it weird that the best investment of all time is now practically universally ignored?
A single dollar invested into tobacco companies at the turn of the 20th century would be worth over $7 million today—an annual compound return of over 14 percent for over a century. Nothing else comes close.
But now, with the rising influence of ESG, the amount of available capital willing to invest in the industry continues to shrink, and major financial institutions, controlling trillions of dollars, are leading the revolt. With new mandates to avoid sin stocks, they’ve sold billions of dollars worth of related equities, driving prices down to significantly lower multiples.
Along with abysmally low investor interest and sentiment, the public is very aware of the health consequences of combustible products, and governments have sprung into action with heavyhanded regulation. Headlines and pundits continually tout that the tobacco industry is doomed.
Are they correct?
Devin LaSarre – Invariant – 2022-07-31