Odd Lots How Tobacco Became One Of The Greatest Investments In History
Oct 15, 2020
Financial advisors Lawrence Hamtil, known for his contrarian strategies, and Gene Hoots, author of "Going Down Tobacco Road," delve into the surprising success of tobacco investments. They discuss how tobacco stocks have outperformed others consistently for over a century and explore the industry's evolution from diverse origins to a few dominant players. Key topics include the resilience of tobacco amidst regulatory challenges, the growing competition from vaping and cannabis, and the impact of ESG factors shaping investment decisions in this controversial sector.
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Addictive Product, Loyal Customers
- The tobacco industry's success stems from selling an addictive product with strong brand loyalty.
- One example is a Camel smoker who stocked her freezer with cigarettes, refusing filtered versions.
Industry Consolidation and Wartime Boom
- The cigarette industry consolidated due to government policies and the emergence of dominant brands.
- World War I significantly boosted cigarette consumption, establishing national brands and a loyal customer base.
New Nicotine Products and FDA Regulation
- New nicotine products like vaping present competition but face FDA regulation hurdles.
- Existing tobacco companies often have their own vaping products, making market entry difficult.
