If You Find Tobacco Stocks Unethical, You Should Buy Tobacco Stocks

Something worth thinking about is the nature of second and third order effects and how the consequences of certain actions can be much different than what we actually intend.

Take something like tobacco investing. If you read any well-circulated article that discusses Altria, Philip Morris International, Reynolds American, or Lorillard as a potential investment, the comment stream generally veers away from the economics of tobacco investing towards the morality of tobacco investing.

You don’t have to go too far to find someone saying: “I don’t invest in tobacco stocks for moral reasons”, and the statement is usually wrapped up in a tone of smugness and moral superiority.

Most likely, that person is not having the detrimental effect on tobacco companies that they anticipate, for two reasons:

1. When you buy shares of Philip Morris International on the open market, you are buying an existing share (as opposed to a secondary … Read the rest of this article!