Millenial Money

Sin stocks and why you should have some in your portfolio

The Kenyan perspective. Because most local investors will not look to go beyond Africa in the event that they are investing in the stock market. Not that they shouldn’t. They definitely should. Dreaming big never hurt no one. Investing in stocks should put aside all feelings. I know this because a religious person might take offence in investing in a company like British America Tobacco for example on the pure thought that it promotes bad habits in people. But what happens if the stock is actually the best bet at making the most returns for you? Do you pass it by on the basis of morality? Money clearly knows no morality.

Sin stocks are generally classified as any companies that are in one way or another involved with activities considered unethical or immoral such as alcohol, tobacco, gambling, sex-related industries, weapon manufacturing or the military.  Some might digress and say that why should you make money off of exploiting human weakness? Shouldn’t you just stick to ethical investing? Kenya being the conservative society we still are, has only two stocks we would actually fully consider sin stocks. A company like Keroche breweries would probably not have it so rosy listing. But the leaders of these companies understand that its just life. You make returns where you can. And vices are clearly making money seeing as both BAT and EABL are large cap stocks. And such stocks are usually the most undervalued because of the sentiment attached to them. As any smart investor knows, these are the best to buy due to the immense potential they carry.

Worldwide, some of the best sin stocks are:

  • Tobacco company Altria Group and Philip Morris
  • Arms and defence company General Dynamics
  • Alcoholics company Diageo
  • Beverage and brewing company Anheuser-Busch InBev
  • Firearms manufacturer Smith & Wesson
  • Gambling corporation Caesar’s Entertainment and  Las Vegas Sands 
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About 
My mission is to help you (and myself) exploit these opportunities and break free: launch a business, start a charity, travel the world and read as many books as is humanly possible!

2 Comments

  1. DENNIS

    November 10, 2017 - 8:40 PM
    Reply

    Can Kenyans buy foreign stock i.e not traded on the NSE, say NYSE? If yes, how?

    • Koki

      January 18, 2018 - 11:01 AM
      Reply

      Will do a post on this in the coming weeks. Look out for it

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