SIN IS IN AND VICE IS NICE - AND PROFITABLE

By COELI CARR

March 14, 2004 -- Spending money on booze, bookies and bimbos could empty your wallet, but investing in them could fill up your retirement account.
Owning a stake in "sin-dustries" - either through the $6 million Dallas-based Vice Fund or by simply buying shares in the companies themselves - could provide a little goose to one's portfolio.

In her new book, "Stocking Up on Sin: How to Crush the Market with Vice-Based Investing," writer Caroline Waxler says: "It may not pay to be good."

The author points to the impressive numbers some of the Vice Fund sectors have racked up recently.

When she compares the tobacco, alcohol, weapons and gambling industries to the S&P 500, the returns are impressive for one- , three- and five-year periods.

The major index was down 33.01 percent from July 2000 to July 2003, while large-cap tobacco returned 107.57 percent.

Likewise, taking a chance with gambling stocks during those three years would have returned 68.36 percent on your "sin-vestment" - a risky bet perhaps, but the odds have actually been in investors' favor.

Is getting in bed with companies that build casinos; produce or market porn; manufacture wine and spirits, sex toys; and produce adult entertainment worth the risk?

"We're not telling people these things are sinful. That's not the issue" said Adam Kanzer, general counsel and director of shareholder advocacy for Domini Social Investments, which advocates socially responsible investing. "We think they're bad investments."

Tobacco, he said, is an industry that manufactures a product that "when used properly and as directed kills you. They're killing off their best customers. That doesn't make good business sense."

Source: New York Times