In the event of a recession... (782 hits)
Category: Business & FinancialRating: 0.75 on 18 reviews (Rate this item) (V)
Submitted by G-prime (View user info) at 2008-04-28 02:51:17 EDT
I like trading stock. Not real stock, as I am broke, but fake internet stocks. Investopedia, a website that gives you fake money to trade stock with, it's fun. I've been buying up stock like mad from companies like Halliburton, GE, Smith and Wesson, Anheuser-Busch, Philip Morris and Imperial Tobacco, which brings me to my question. My hypothesis is that in the event of a recession in the States, people would smoke more. The logic is, more stress, more smoking. However, it could be quite the opposite. Less money, less smoking. And so I put the question to you, uber-armchair-economists and smokers, will my investments in tobacco pay off in a recession? Smokers, would you smoke more or less? Non-smokers, would you consider starting to smoke? You are my brokers. Advise me.
User Reviews
Submitted by TheUniter (user info) at 2008-04-29 13:08:06 EDT (#)
Ranking: 0
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Submitted by TheUniter (user info) at 2008-04-29 13:07:58 EDT (#)
Ranking: -1
Submitted by adamleathertramp (user info) at 2008-04-28 19:47:22 EDT (#)
Ranking: 1
P.S.
As a smoker, my habit will remain constant, only now I will purchase the Carton (10 packs) instead of one pack at a time.
You'll also see alot of promotions now, Buy 1 get 1, cool new flavors, colors, etc...
Submitted by adamleathertramp (user info) at 2008-04-28 19:45:37 EDT (#)
Ranking: 1
I think that sales will remain relatively constant for the tobacco companies, however, that is not the sole factor in determining the value of a cigarette companies stock. They spend alot of money on hooking new smokers and growth plays a major role in the valuation of stock prices for these companies.
Less growth, less prospects, stock price will remain constant or if it is already over-valued, will return to its actual value, not the speculated or perceived value.
Interesting point, and I think investing in tobacco companies at this point in time is a sound investment. The real bread and butter in this economy is commodity futures. If you haven't jumped onto the bandwagon yet... well it might be a little late, for those that saw this coming over a year ago, smooth sailing...
Submitted by BLITZKREIG_BOB (user info) at 2008-04-28 15:44:28 EDT (#)
Ranking: 2
Smoking would probably drop during hard times because of the extremely high tax on cigarettes.
Now, alcohol consumption will increase.
I own stock in Coors-Labatts.
Submitted by Hookhand (user info) at 2008-04-28 09:51:58 EDT (#)
Ranking: 2
The increased stress from a poor economy would offset the decreased funds to buy cigarettes. I think the amount of smoking would be relatively unchanged. People will never give up smoking altogether, however,so it's a sound investment.
Submitted by Phallic_Cymbals (user info) at 2008-04-28 09:05:01 EDT (#)
Ranking: 0
No one will give up the Staunton Lick.
Submitted by monkeyswithguns (user info) at 2008-04-28 08:48:05 EDT (#)
Ranking: 2
I quit smoking, plus I'm teaching myself to live off the grid.
Submitted by skrapmetal (user info) at 2008-04-28 07:45:04 EDT (#)
Ranking: 0
Get a passport and buy a roundtrip ticket to some faraway land. No specific return date. Tell all your friends you'll be gone a while. Get a fake ID. Use it to rent an apartment in any large city that you don't live in and buy a cheap car for cash. Buy a couple black gym bags. Go to a nice neighborhood in the suburbs wher there's a big house with property that backs up to an abandoned farm with a barn on it. Take your $10000 to the front door of that house and buy some methamphetamine. Divide that meth into 2000 equal units and take half of them them downtown. Sell them for $10 each. Tomorrow - take the other half downtown and sell it. That's profit. Do NOT bank or invest this profit yet. Repeat every two days. Take Saturdays off; all work and no play... Do that for a year. Return to your real life with about $1.7M (after expenses) in a couple black gym bags.
Submitted by FATMANTPK (user info) at 2008-04-28 07:41:14 EDT (#)
Ranking: 0
I see it as the same as alcohol. Some people will sacrifice other luxuries to allow room in their budget for PBR's and Marlboro's. Smoking and drinking are habits and people will give those up as a last resort to afford Kroger brand Mac N Cheese to feeed their families.
Submitted by Berty (user info) at 2008-04-28 05:23:08 EDT (#)
Ranking: 0
Smoking is awesome.
Submitted by LittleMonster (user info) at 2008-04-28 05:20:55 EDT (#)
Ranking: 0
Less smoking.
Submitted by Berty (user info) at 2008-04-28 05:15:09 EDT (#)
Ranking: 0
That won't happen for ages though. Also it is impossible to predict the appearence of Mothra (aka: unforseen economic buoyancy) in this equation.
Whatever man! Invest your money in poker.
Submitted by Berty (user info) at 2008-04-28 05:13:33 EDT (#)
Ranking: 0
Cigarettes are a luxery commodity. In the coming recession when the inevitable change from oil to some other form of energy impacts on jobs and economies across the globe then people won't be spending so much on luxeries.
HOWEVER, after big oil has transformed into Super Mecha-Gidra (or whatever) the tobacco companies will have perservered.
Submitted by bjrog2 (user info) at 2008-04-28 04:56:07 EDT (#)
Ranking: 0
Meh, 2/3's of a business degree @ 19 years of age will do that for you. best of luck with your e-brokering
Submitted by G-prime (user info) at 2008-04-28 03:34:36 EDT (#)
Ranking: 0
hahaha i like your perspective. i figured it was something like that, but don't know quite enough about the economy to put it as well and as precisely as you did
Submitted by bjrog2 (user info) at 2008-04-28 03:07:41 EDT (#)
Ranking: 1
Think about it from a micro/macro-economics perspective. As wages decrease, unnecessary expenses would need to be cut out. Smokers being creatures of habit, NEED to smoke. Things like driving a car, going to the movies, luxury foods etc would be purchased less as smoking needs to remain a constant in order for smokers to stay sane. Shares in smokes would only go up in a microeconomic environment, e.g. The national economy, as people would buy more smokes relative to other groceries (GDP would show smokes taking up a greater percentage). On a macroeconomic scene, countries that produce and export smokes would export the same amount, as demand would still be the same. If supply & demand are unchanged, then the laws of duality say that purchases and revenue are the same.
As simple as it is, shares in cigarette companies arent going to go down... people are dumb, and will continue to smoke.
Bring on the recession i say! (Non smoker)
Submitted by Val (user info) at 2008-04-28 03:02:26 EDT (#)
Ranking: 2
think of it this way... less money= more booze= more smoking.
my argument is flawless.