When Did it Become a Sin to Invest in Guns, a So-Called ‘Vice Stock’?
via Is Apple A Sin Stock?” by Susannah Breslin – Forbes.
Is Apple (AAPL) a sin stock?
That’s the question Gerry Sullivan, portfolio manager of the Vice Fund (VICEX), raised in his interview with Forbes capital market reporter Abram Brown in “Guns, Booze and Gambling: Sinful Stocks for a Recession-Proof Portfolio.”
Brown asked Sullivan if the vice industries-focused fund was considering adding any new sin stocks.
Here’s Sullivan’s response:
I’d consider video games an addiction. Apple products too. We’ve actually gone through and asked, is Apple a vice stock?
So, is it?
I asked tech experts, sin stock specialists, and a Jesuit priest.
What’s a sin stock?
The Vice Fund concentrates on four sectors: alcohol, tobacco, gaming, and weapons/defense. Investopedia defines a “sinful stock” as “Stock from companies that are associated with (or are directly involved in) activities that are widely considered to be unethical or immoral.” More broadly, vice industries tend to have higher barriers to entry, may or may not produce products that are harmful or addictive, and could have complex legal and tax issues.
The way investor James Altucher sees it, Apple is a “spice stock,” somewhere between a vice stock and not.
“I would not think of [Apple] as a vice fund, but I certainly use the iPad as an escape, so it depends on how we define vice,” Altucher says in an email. “Although I guess the best thing would be if I just meditated on planes, instead of played Temple Run the entire time.”
****
Related at PJ Lifestyle:
Well, as Peter Schiff found out, among Democrats a sin stock is any company that makes a profit, or at least an unlimited profit.
I saw this fund several years ago. I didn’t invest in it but I did buy some gun stocks, since Obama’s the worlds greatest gun salesman. Done pretty well too. You do have a lot of capricious regulatory risk driven by zealots with guns so perhaps that makes them sin stock.
Curiously, Apple doesn’t allow pornographical materials in their app store (and possibly their book store), so by snootily refusing to invest in them, he’s punishing a company that’s in agreement with him!
I’m not invested in gun companies because I didn’t think of it. I suspect their prices are at all-time highs right now…
The fun thing, as far as I’m concerned, is that “weapons/defense” is considered a sin. Remember, any criminal is a modern-day Jean Valjean, and needs to steal from someone, deal drugs, whatever, in order to feed his children. You on the other hand don’t need to defend yourself; doing so will deprive that desperate individual’s family of their breadwinner.
How insane have we gotten?
We’re not there yet. What you say has a touch of hyperbole for this country, but in Great Britain anyone injuring a burglar in defense of his home can face criminal charges, as numerous press reports attest.
Instead of enforcing laws against criminals, they’ll call it “undocumented wealth redistribution.”
Heck, I’ve heard of a guy investing in lots of AR-15s and ammo because his 401(k) crapped-out… expecting to do much better w/ the election coming up, even more so w/ one outcome versus the other.
Seriously, he’s honestly expecting the resale value to bring a much better return on investment than convention things lately.
I have noticed a pretty sharp increase in firearms over the last couple of years. Not sure if it is fear of future legislation, inflation, or devaluation of the dollar, but prices are going up.
My father has always said that his guns were as much an investment as a hobby. Firearms will lose a small amount of value on initial purchase (due to now being used guns) but as long as they are kept in good working order they hold their value very well.
If you collect firearms then you actually can get a pretty good return on your investment if you hold it for the long haul, depending on what you acquire.
In my personal accumulation….er…collection, I have a WWII vintage M1 Garand rifle. If memory serves I paid something like $167 for it.
It now is easily worth about $1,200 now – even in this economy, and this specific rifle appears to only be getting more valuable as the years go by. I wish I’d bought a crate or two of them!
Considering the Democrats’ efforts to officially repudiate God, is any company that supports Democrats (GE, I’m looking at you especially) a “sin” stock?
Well, I must (regretfully) consider investing in Colt Industries a sin. But only because if it weren’t for the AR-15 rifle family and military sales, the company would have gone bankrupt decades ago.
Colt has somehow managed to go from No. 1 in the handgun market to not even being a player. Mainly due to incredibly bad management decisions. They cancelled almost all production of revolvers at a time when interest in them as simple, reliable guns for target shooting, hunting, and personal defense was rapidly increasing. Today, Smith and Wesson, Ruger, Taurus, their subsidiary Rossi, and others make revolvers for almost every use imaginable and do very good business doing so. Colt- makes no revolvers at all, with one exception I’ll get to in a moment.
Next, on the self-loader side, Colt has made an icon of the 1911, which I’ve used a good bit myself. But in the process, they somehow managed to miss out on the growth of the double-action 9mm and .40 caliber autos. They tried to cash in on the “wondernine” market briefly with the Model 2000, which was complex and expensive, not to mention unreliable. Their one .40 caliber project was a CZ-85 clone imported from Italy; a trigger-cocking only item of dubious reliability, as well. Only about 200 were ever marketed; I’ve seen one, and wasn’t impressed by it.
All this time, they had a double-action, double-stack magazine 9mm pistol prototype, developed for the Joint Services Small Arms Program (JSSAP, pronounced “Jay-sap”) trials in the 1980s. It only lost out to the Beretta M92 on cost grounds. It apparently never occurred to them to put it on the civilian market.
By the way, a much earlier such competition, in the 1950s, gave birth to the Smith & Wesson Model 39 9mm auto, and thus most of the modern S&W autopistol line other than the new Military & Police series and their 1911 clone. So it’s not like Colt didn’t have an example; it was just that they apparently couldn’t even buy a clue.
To top it all off, when the sport of Cowboy Action shooting began, Colt made the eponymous “Old West” revolver, the Colt Model P, aka Model of 1873 Single Action Army, aka “Peacemaker”. Considering it too complicated to make for a salable price (Uberti in Italy, and others, disagree), they sensibly came up with a version more amenable to modern production, known as the “Colt Cowboy”. It was aimed specifically at the CAS market, while the “true” Peacemaker was aimed at the more “top end” buyers.
Then Colt stopped making the Cowboy, period. And relegated the Model P to the Custom Shop, where they only make them on special order, charging about $2000 each, and that’s without special finishes or engraving. Needless to say, you don’t see Colts at Single Action Shooting Society meets much, these days. But Colt SAA clones from Uberti, Armi San Marco, Cimarron, & etc. abound. Gee, I wonder why?
Colt’s history for the last forty years has been a succession of wrong calls. Their design departments come up with excellent ideas, like the King Cobra revolver (a low-cost brother to the Python), the Anaconda (a big-bore hunting revolver), and the Magnum Carry (an updated Detective Special snubnose chambered for .357 Magnum), because that’s what the market is buying.
And then Management says, “Ahh, no, I don’t think we want to do that. Besides, we can always sell M-16s to the Army.”
Selling 1911s to civilians, and AR-15s to the U.S. government, has somehow managed to keep Colt alive in spite of apparently being run by people who make Dilbert’s pointy-haired boss look like Sir Isaac Newton by comparison.
Colt either needs new management, or an end to government contracts. Because as it stands, the company is strictly on life support.
So yes, I’d call investing there a sin. But only because I’m morally opposed to throwing good money after bad. Not to mention acting as an enabler to blithering idiots.
clear ether
eon
Nailed it. Good/great explanation.
I agree with much of what you point out, though would disagree possibly regarding your the judgement of current management as they did have a hot mess to deal with when they took over.
Heck, I understand under the previous management Colt even lost the statue of the horse they had as a company symbol for over a century!
Part of the problem with Colt’s products is too many people now see them as collectable rather than shootable.
As such, that Colt .45 1911 Gold Cup is a wonderful weapon – but the new owner may be more likely to stuff it into a gun safe as an investment rather than take it to the range and shoot it. In the meantime it seems every manufacturer under the sun is producing a perfectly functional and reliable 1911 at a much more attractive price point.
Why spend the money just for the sake of having “Colt” stamped on the slide?
Same with the Model P (what most would call the cowboy pistol). Uberti can produce an excellent copy with parts so accurately reproduced that they are interchangeable with original Colt’s from the 1800′s, and do so profitably while the Colt product is going to come out of their custom shop and easily have a 4 figure price tag on it.
When a gun owner takes a gun out to shoot, they’ll more likely grab an Uberti (or some other clone) and leave the Colt in the gun safe.
This seriously drives up the cost of those Colt products (already high due to union labor in comparison to other manufacturers of 1911′s), and this in turn drives customers to purchase even more non-Colt products as no one wants to be the guy criticized for destroying the value of a “collectable” by actually shooting the darn thing.
What Colt may need to do is produce a modest but reliable, cost competitive product that the average joe can afford as a way of getting people into purchasing their products in greater numbers again so they can finally move away from being a manufacture of expensive collectibles and into being seen as a manufacturer of working products.
As long as they are primarily seen as collectible, they are severely limiting their market appeal.
Entertainment is a sin now?
I didn’t realize that the Waterboy’s mom worked at Forbes.
Who gives a flip? I care about two kinds of stock, profitable and unprofitable. Anyone who doesn’t hold the same conviction in the market is a looneytune.
I would prefer not to invest in a front company for some corrupt government that repressed its citizens. Profit or no, you have to draw the line somewhere.
The real sin is that Apple stock hasn’t split in years!
Investing in a stock is about making a return on that investment. Folks need to read “The Psychology of Investing” by Kinarthy. Remove emotion from the equation and buy or sell a stock on its merits. If you want to make a statement with your investments then prepare yourself for losses.
Harvard received money from a pub for centuries
General business practices aside, the devotion some people out there have for Apple and its products comes dangerously close to the point of idolatrous worship.
Like a couple of the earlier commenters, I’ve always been amused/annoyed by the characterization of defense industry stocks as “unethical” or “sinful.” What a load of Barbra Streisand. The people who make those sorts of pretentious characterizations will be the very first to scream (pardon the expression) bloody murder if their own precious hides are threatened because the troops in the field – or better, their beloved “first responders” – were inadequately equipped because their tools are, you know, eeeeeevil. Made by eeeeeevil corporations, being all corporationey. (“Matt Damon.”)
So pass the bourbon, deal me some more AAPL, and hit me with some Lockheed Martin and United Technologies while you’re at it. And pardon me while I go put on “Team America: World Police” again.
When a republican in office, US troops are “baby killers.” When Obama is in office, they’re A-OK.
How about textile stocks? Those companies make sheets and you know what happens on sheets. I won’t even mention mattresses.
The real sin is for an honest man (or woman) to leave his (or her) family defenseless.
Any fund manager who does not invest in a given stock on ethical grounds, unless explicitly instructed by the investor, should be fired for breach of fiduciary duty, sued for malpractice, barred from trading and imprisoned for fraud.
Perhaps the Left’s antipathy toward the Second Amendment thereof explains their refusal to abide by the Constitution in general.
I’m an Apple/iPhone user and it does bother me that these products I enjoy so much are made by virtual slave labor. That’s pretty sinful actually.
The one really good investment I’ve made was buying into the Vice Fund years ago.
Umm, for all you guys bashing the fellow, he running Vice Fund. He wants people to invest in it. So, in other words, they are all in favor of sin… They are recommending guns, porn* and Apple because they see them as consistent moneymakers.
*Actually I’m not sure if porn is in their portfolio these days as I understand the profits in the skin trade are way down…