By The Sizemore Letter<\/u><\/p>\n
It\u2019s so good to be bad\u2014at least when it comes to investing.<\/p>\n
Vice stocks are a corner of the market where many investors\u2014and particularly professionals\u2014are afraid to venture.\u00a0 But this reluctance by many investors to embrace vice stocks is precisely what makes them such profitable investments (see \u201cThe Price of Sin<\/a>\u201d<\/strong>).\u00a0 Because professional investors like to avoid being associated with merchants of death and peddlers of peccadillo, these companies tend to trade at discounts to the broader market and often pay substantial dividends.<\/p>\n Some areas of the vice world\u2014in particular tobacco and firearms\u2014have moats around their businesses that mafia dons or drug lords would envy.\u00a0 Government regulation and a hostile legal regime make it almost impossible for new company to set up shop in these businesses.\u00a0 The compliance costs would prevent them from ever getting off the ground\u2026and the first lawsuit would bury them.<\/p>\n Today, we\u2019re going to take a look at five high-profile vice stocks and evaluate their investment merits.<\/p>\n