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Didn't want to sell VPU, but needed to do it in order to buy these three tobacco stocks. The trade was inspired by this post (and quite a few before it) at Credit Bubble Stocks. The temptation to buy has been growing over the past few months, and I finally pulled the trigger.
Part of the appeal of VPU is the addictive nature of electricity combined with relatively high dividends. Adding the addictive nature of nicotine and even higher dividends to the mix seems like more of the same. As an added bonus, it offers more diversification (and potentially greater rewards). I'm no longer relying on just one industry. I anticipate holding all of these investments for at least a decade.
If you are curious as to why I overweighted BTI, I was intrigued by its ultra low 0.14% short interest (according to TD Ameritrade, as of 7/15/21). Shorting a stock with an 8% dividend yield is not for the faint of heart. You better know something that others don't. Apparently, not many think they do. If so few traders want to sell shares they don't own, perhaps I should be willing to buy more. And so, I did.
This is not investment advice.
7 comments:
Well, this is a turn of events. Old school. Tobacco is one of the most hated and highly taxed products on the market. The highly addictive part works in your favor. Hopefully, most of the big settlements are over.
With the rise of ESG investing, you may have picked up some undervalued assets. Oil is quickly becoming another hated, but highly addictive product. People are pretty addicted to energy. I don't think any of the world's armies are switching to electric tanks and planes any time soon.
Oil has been tempting me too.
Old school cynicism is apparently kicking in more and more as I get older.
Is there a way to invest in heat wave induced locust plagues? Kind of bullish on those. It’s been a hot dry summer. Again. Sigh.
No reason to put all your eggs in one basket!
I learned the hard way that industry diversification is important (think Dotcom in 2000 and banks in 2008). I’ll admit that I was a slow learner, and had to be beaten twice, but it’ll be a snowy day in Key West before I make that mistake again.
I’d like to see you buy oil stocks as well (talking my book of course), but there are some decent yields to be had in that sector for fairly low risk.
I bought Helmerich & Payne in the late 1990s. Thought oil prices would eventually head higher. Can’t recall when I sold. It may have been when I sold all of my stocks in 2004. Got spooked early by the housing bubble.
The most amusing part is that the ticker symbol is HP. Some investors thought they were buying Hewlett-Packard. Those who figured out that they bought the wrong stock and fixed their problem found a new problem during the dotcom crash. Would have been much better off not figuring it out! D’oh!
Since the trend is toward less risky forms of nicotine, you might want to pick up some GlaxoSmithKline, makers of Nicorette. They can hook you with their 2mg gum, then up the dose to 4mg when you need a better buzz. No smell, no smoke, no teeth discoloration. It's a great way to break into the world of nicotine!
Used to take one
Now it takes four
You don't get me high anymore
My addictive drug of choice is lemon Skittles.
And I do mean the candy, not lemon zkittlez (which is a strain of cannabis, apparently).
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