03-31-2022, 05:51 PM
(10-22-2021, 12:25 PM)fenders53 Wrote: The thesis has not been working for five years. The yield is the only attraction and the opportunity cost has been enormous in a huge bull market. Anything else quality crushed tobacco. The yield is safe for a year or more so you won't lose too much money. It took me a long time to accept the reality of yield traps. The market is all about sentiment and ESG will win on this subject. They will keep the multiple depressed. A 5% total return on a proven risky sector is a bad bet.
For what it is worth, BTI is up 30% since the last post on this thread. Tobacco seems to be one of those things that you cannot see how it could be profitable 20, 50 or 100 years from now. However, I just had a friend return from a trip to Italy and he said the number of people he saw smoking over there was unbelievable to him. That may not be a good enough thesis for an investment but I do think in the US we underestimate how many people in other countries still smoke quite a bit.