Time To Stop 'Bogarting' Cigarette Stocks
Charles Sizemore | Oct 23, 2012 03:34PM ET
You know you have reached a certain level of immortality when your name becomes a verb. And I can think of no better example than the American actor Humphrey Bogart, perhaps best known for his role in that all-time classic Casablanca.
To 'Bogart' a cigarette is to leave it dangling sloppily in your mouth, even when speaking, rather than engaging in proper smoking etiquette by giving it a few puffs at a time and then removing it. Over the years, the word has also come to mean to greedily hog something.
Today, I would say both meanings of the word are accurate descriptions of investors in tobacco stocks. Investors are “Bogarting” cigarette stocks by continuing to hold them at current prices.
I Like Vice (Stocks, That Is) The Burn Out
First, a little disclosure is needed. I have been a major fan of sin stocks in general and cigarette stocks in particular for years (see it’s been a holding of the portfolio for two years, and I’ve been reluctant to pull the trigger and sell because of the taxable gains it would generate. But I have tightened my stops in MO and am not advising that investors put new money into it.)
Investors have enjoyed a fantastic ride in Big Tobacco stocks, but like a good cigarette (or cigar if you prefer), they will eventually burn out. This long-time tobacco bull recommends discarding Philip Morris International like a soggy cigarette butt and viewing the rest of the sector with skepticism. There are better income opportunities elsewhere.
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