Waxler stocking up on sin; how to crush the market with vice based investing (2004)

4205_P-00FM.qxd 1/15/04 12:30 PM Page iii STOCKING UP ON SIN How to Crush the Market with Vice-Based Investing Caroline Waxler John Wiley & Sons, Inc 4205_P-00FM.qxd 1/15/04 12:30 PM Page viii 4205_P-00FM.qxd 1/15/04 12:30 PM Page i STOCKING UP ON SIN 4205_P-00FM.qxd 1/15/04 12:30 PM Page ii 4205_P-00FM.qxd 1/15/04 12:30 PM Page iii STOCKING UP ON SIN How to Crush the Market with Vice-Based Investing Caroline Waxler John Wiley & Sons, Inc 4205_P-00FM.qxd 1/15/04 12:30 PM Page iv Copyright © 2004 by Caroline Waxler All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the Web at www.copyright.com Requests to the publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008 Limit of Liability/Disclaimer of Warranty: While the publisher and author have used the best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose No warranty may be created or extended by sales representatives or written sales materials The advice and strategies contained herein may not be suitable for your situation You should consult with a professional where appropriate Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993 or fax 317-572-4002 Wiley also publishes its books in a variety of electronic formats Some content that appears in print may not be available in electronic books For more information about Wiley products visit our web site at www.wiley.com Library of Congress Cataloging-in-Publication Data: Waxler, Caroline Stocking up on sin : how to crush the market with vice-based investing / Caroline Waxler p cm Published simultaneously in Canada Includes bibliographical references and index ISBN 0-471-46513-5 (cloth) Investments—Moral and ethical aspects I Title HG4515.13 W39 2004 332.63′22—dc22 2003021774 Printed in the United States of America 10 4205_P-00FM.qxd 1/15/04 12:30 PM Page v Acknowledgments can’t express enough thanks to my agents, Greg Dinkin and Frank Scatoni of Venture Literary, for all their incredible hard work, thoughtfulness, example, care, and yenta-ing They did practically everything but write the book Greg teamed me up with the perfect editor, Debra Englander of Wiley, to make this book happen She had the vision to see the potential in this project and the patience to guide me through the process I was lucky to collaborate with someone who has such a rare combination of perseverance, diligence, and talent I am indebted also to her colleague Greg Friedman for all his hard work My appreciation to Randy Jones, founder of Worth magazine, for assigning the article that spawned this book and to Michael Peltz for patiently editing and shaping that article Without them this book would not exist I am grateful to the people who have helped and generously shared their expertise with me: John Semel, Michael Tew, Anthony Butler, Martin Vostry, Tim McDarrah, Dan Ahrens, Dr Roderick Pettis, Adam Glickman, and Richard Laermer I am especially grateful to Webster Stone for coming up with the title of this book, and to Sam Coolik and Gretchen Morgenson, who taught me about investing in the first place Thanks to Carter Crum, CFA, for all his helpful research on gambling, drinking, eating, and so forth He is the savviest money manager I have ever worked with I v 4205_P-00FM.qxd vi 1/15/04 12:30 PM Page vi Acknowledgments Brian Lerner was an enormous help He was a great partner in making this book possible and a first-rate researcher And to the fabulous Pan sisters, Amelia and Esther, thanks for being a godsend in times of crunch For the daily encouragement, support, and deadline reminders: Ilana Albert, Joey Anuff, Emily Cohen, Sean Gottlieb, Brent Hoff, and Nadine Zylstra And, for his thoughtful suggestions, not to mention a job that provides inspiration for all things vice, Michael Hirschorn Enormous thanks for their encouragement and for keeping me focused: Ali Weiss, Bernadette Durham, Annalise Carol, Sabina Forbes, and Susan Mactavish Best And, of course, to my family for all your support, particularly Aunt Joan, with her unflagging work ethic and ingenuity, kept me inspired throughout this whole process Grandma Sylvia, the true writer in the family, would have enjoyed this book more than anyone The book is dedicated to my mother, Barb, a woman who may not know from vice but, thanks to Miss Finney, knows a thing or two about investing Luckily, she has passed that knowledge on to me 4205_P-00FM.qxd 1/15/04 12:30 PM Page vii Contents Chapter Why Vice Is Nice Chapter The Ethical Dilemma and Asset Allocation 19 Chapter This Is Research? 49 Chapter Tobacco 69 Chapter Gambling 83 Chapter Weapons/Defense/War 103 Chapter Booze 115 Chapter Sex 133 Chapter Drugs 151 Chapter 10 Vice in Sheep’s Clothing 165 Chapter 11 Pitfalls and Risk Management 183 Chapter 12 Your Vice’s Future 195 Chapter 13 Afterglow 205 Appendix I Returns of Socially Responsible Mutual Funds vs All Other Mutual Funds as Well as the S&P 209 Appendix II Stocking Up on SINDEX 217 Appendix III The Titillating 20 225 Notes 231 Index 237 vii 4205_P-00FM.qxd 1/15/04 12:30 PM Page viii 4205_P-17(notes).qxd 1/15/04 1:36 PM Page 231 Notes Chapter 1 Dixon Murray, Teresa “Fund invests in vice, but, so far, sin doesn’t pay.” Cleveland, OH: The Plain Dealer, March 9, 2003 Earle, Julie, and Florian Gimbel “Vice squad puts the pressure on ethical investors.” U.K.: Financial Times, September 29, 2002 Leerskov, Meghan “Vice is nice: The underbelly of the investment world isn’t such a bad place to be [Editorial].” Buyside, January 1, 2003 Chapter Merriam-Webster’s Collegiate Dictionary, 10th ed., Springfield, MA: Merriam-Webster, 1999 Fernandez, Bob “Exploiting the Profits of Vice: Investors Come Out Smoking, Roll the Dice with ‘Irresponsible’ Mutual Fund.” The Houston Chronicle, October 14, 2002 Ibid Johnston, Jo-ann “Investors Search for Ethical Investments.” The Tampa Tribune, August 18, 2002 Taken from the PBS Web site description of its movie, Andrew Carnegie, as part of their American Experience Series www.pbs.org/ wgbh/amex/carnegie/filmmore/description.html Middleton, Timothy “Mutual Funds Feel-Good Investing? I’d Rather Make Money.” MSN Money Web site, Posted 8/19/03, http://money central.msn.com Hulbert, Mark “Strategies: Good for Your Conscience, If Not Your Wallet.” The New York Times, July 20, 2003 231 4205_P-17(notes).qxd 232 1/15/04 1:36 PM Page 232 Stocking Up on Sin: How to Crush the Market with Vice-Bearing Investing Chapter PBS Web site, Betting the Market: http://www.pbs.org/wgbh/pages/ frontline/shows/betting/pros/lynch.html Harris, Lynn “Makeover for aging sex symbol: K-Y Jelly, the oldfashioned ‘personal lubricant,’ gets an image revamp to appeal to younger set.” The Toronto Star, May 23, 2003 Strasburg, Jenny “Gap’s sales fall 2%; Drop is improvement for retailer as industry suffers from slump.” The San Francisco Chronicle, September 6, 2002 Chapter “Cigarettes: Anatomy of an Industry from Seed to Smoke [book review].” Publishers Weekly, January 1, 2001 Sellers, Patricia, and Julia Boorstin, and Christopher Tkaczyk “Altria’s Perfect Storm; Hit by cut-rate competitors, taxes, and most of all, litigation, the company that owns Philip Morris faces its worst crisis in years.” Fortune, April 28, 2003 “Lorillard Launches Ad Campaign Targeting Cigarette Excise Taxes— ‘No Tax No Crime’ Initiative.” PR Newswire May 8, 2003 Ibid From British American Tobacco’s Web site, www.bat.com, via The Vice Fund’s Web site, www.vicefund.com Kemp, Kenny “Cash from Ash.” U.K.: Sunday Herald, July 13, 2003 Dreman, David “Tunnel Vision.” Forbes, March 17, 2003 Chapter www.gamblingphd.com Ibid Gorman, Tom “Topless Shows Put the ‘Sin’ Back in Sin City,” LA Times, June 17, 2001 20/20 Downtown (10:00 PM ET)—ABC, April 24, 2002, Las Vegas, Nevada, abandons family theme and reverts back to earlier adultoriented image Ibid Smith, Rod “Growth foreseen for slot machine sales.” Las Vegas Review-Journal, September 26, 2002 Ibid 4205_P-17(notes).qxd 1/15/04 1:36 PM Page 233 Notes 233 Jones, Chris “MGM Mirage to shut Web gambling site: Legal, political doubts plagued effort.” Las Vegas Review-Journal, June 05, 2003 Smith, Rod “Sluggish Economy, Higher Taxes Take Toll on Gambling Operators.” Las Vegas Review-Journal, June 4, 2003 10 Dehaven, Judy “Still Gambling—Borgata, taxes and competition will shape Atlantic City’s future.” The Star-Ledger, May 15, 2003 11 Berenson, Alex “The States Bet More on Betting.” The New York Times, May 18, 2003 Chapter Staff “What’s Ahead in Aerospace Defense Played Big Role in SecondQuarter GDP Growth, Analyst Says.” Aerospace Daily, August 4, 2003 Laise, Eleanor “Beyond Iraq.” SmartMoney, May 1, 2003 Ibid Peltz, James “Defense stocks not booming in wartime Iraq: Fighting not factor, analysts say Shares pricey.” Los Angeles Times, March 23, 2003 Martin, Neil A “Secure investments: The Homeland Security Act has given investors some potentially attractive opportunities.” Barron’s, June 16, 2003 Ibid Chapter English, Simon “The Vice Fund aims for rewards in this life.” UK: The Daily Telegraph, August 27, 2002 Waxler, Caroline “Sex Appeal.” Worth, November 2002 Kirk, Jim “Wait nearly over for U.S rollout of low-carb beer.” Chicago Tribune, May, 2, 2002 Salter, Jim “Anheuser-Busch Claims Half of Beer Market.” Associated Press, April 24, 2003 Todd, Heather “Breaking the Ice: New malternative beverage ‘thin’ on calories and carbohydrates.” Beverage World, April 15, 2003 Lawton, Christopher, and Deborah Ball “Diageo Mixes It Up—Liquor Giant Targets System Dating to End of Prohibition; Following the Beer Model?” The Wall Street Journal, May 8, 2003 Kosnett, Jeffrey R “Simple and Safe.” Kiplinger’s Personal Finance, July 1, 2003 4205_P-17(notes).qxd 234 1/15/04 1:36 PM Page 234 Stocking Up on Sin: How to Crush the Market with Vice-Bearing Investing Helman, Christoper “Seeing stars; No winery Constellation Brands makes juice to suit winos and sommeliers alike.” Forbes Global, January 6, 2003 “Prince warns of GM crop ‘threat’.” U.K., BBC News, June 11, 2002 10 Freedman, Michael “That Sinking Feeling; Could deflation happen here? A gloomy Stephen Roach says it may well be on its way.” Forbes, July 7, 2003 Chapter Notes Rich, Frank “Naked Capitalists: There’s No Business Like Porn Business.” New York Times Magazine, May 18, 2003 Sigesmund, B.J “XXX-ceptable porn has gone mainstream Today’s adult-film stars are writing books, making movie cameos and hitting prime time When did America get so comfortable with hardcore?” Newsweek, July 2, 2003 Pondel, Evan “Mainstream Move Adult Film Company Advertises with Snowboards and Athletic Shoes.” Los Angeles Daily News, May 9, 2003 Egan, Timothy “Erotic Inc.—A special report Technology Sent Wall Street Into Market for Pornography.” The New York Times, October 23, 2000 Keegan, Paul “Prime Time Porn.” San Francisco, Business 2.0, June 2003 Waxler, Caroline “Sex Appeal.” Worth, November 2002 Fitch, Stephane “The Unhappy Hawker.” Forbes, January, 21, 2002 Barrera Diaz, Cynthia “The Naked Truth.” Australia: The Gold Coast Bulletin, May 27, 2003 Waxler, op cit 10 Egan, op cit 11 Bean Yancey, Kitty “Coalition wants to change hotel porn channels.” USA Today, September 24, 2002 12 Bean Yancey, Kitty “Omni turning off porn at some hotels Chain removes ‘temptation,’ at a loss of more than $4 million.” USA Today, February 4, 2000 13 Bean Yancey, Kitty op cit., September, 24, 2002 14 Ibid 15 “Religious Leaders Launch Petition Drive Aimed at Getting Fortune 500 Companies Out of the Pornography Business.” PR Newswire, December 17, 2002 4205_P-17(notes).qxd 1/15/04 1:36 PM Page 235 Notes 235 16 LaRue, Jan “AT&T Getting the Porn Ring Out of Its Collar.” Concerned Women of America Web site (www.cwfa.org.), March 20, 2003 17 Waxler, op cit Chapter Fink, Mitchell, with Lauren Rubin New York Daily News, November 4, 1999 Ibid Lloyd, Linda “Two pills look to topple Viagra’s reign in market, Levitra expects approval next month, Cialis later this year.” The Philadelphia Inquirer, July 6, 2003 Waxler, Caroline “Sex sells.” Worth, November, 2003 “Glaxo says Levitra doing ‘fairly well’ in Europe.” Reuters News July 23, 2003 Japsen, Bruce “Drug Companies Take on Pfizer for Share of Viagra Market.” Chicago Tribune, July 13, 2003 Lloyd, op cit Waxler, op cit Ibid Chapter 10 Waxler, Caroline “Sex Sells.” New York, Worth, November 2002 Kapner, Suzanne “Dior Bucks Trend With 10% Sales Gain.” The New York Post, July 18, 2003 Navratil, Wendy “Oo-la-la! Is Gucci ad simply gratuitous?” Chicago Tribune, March 9, 2003 Waxler, Caroline, op cit Chapter 11 Smith, Roc “Gambling Industry: Gambling supporters succeed The Las Vegas Review-Journal, November 7, 2002 Ryssdal, Kai “Profile: Bill to curb Internet gambling.” Minnesota Public Radio: Marketplace Morning Report , May 8, 2003 Sager, Ira, Ben Elgin, Peter Elstrom, Faith Keenan, and Pallavi Gogoi “The Underground Web.” BusinessWeek, September 2, 2002 4205_P-17(notes).qxd 236 1/15/04 1:36 PM Page 236 Stocking Up on Sin: How to Crush the Market with Vice-Bearing Investing Chapter 12 Aktar, Alex “The New Reality after a Year of Economic and Religious Scandal, Faith Popcorn Predicts 2003 Will Be about Food, Family and Vanity.” New York: New York Daily News, January 1, 2003 Passmore, Daryl “Our brave new world.” U.K.: Sunday Mail, January 12, 2003 www.teledildonics.com Phillips, Mike “My date with the Virtual Sex Machine.” Salon.com, February 5, 2003 Spark, David “Make Love to Your Computer.” TechTV, Wired for Sex Web site Posted April 24, 2003 and Modified June 27, 2003 Maheu, Marlene M., “Future of Cyber-Sex and Relationship Fidelity,” SelfhelpMagazine.com Web site: www.selfhelpmagazine.com/booklet/future.html “MA/iTV—Porn providers let the viewers join in.” U.K.: New Media Age, August 8, 2002 “Growth Looks Limited for Wireless Adult Content.” U.K.: Wireless Data News, April 23, 2002 Skeldon, Paul, “Sex and the city.” U.K.: Communications International, October 1, 2002 10 Harvey, Fiona “Welcome to 3G—girls, games and gambling.” U.K.: Financial Times, February 25, 2003 11 Lowe, Sue “News and Features—Text and the city.” Australia, The Sydney Morning Herald, March 3, 2002 12 “Dating evolution.” U.K.: New Media Age, May 29, 2003 13 Hochbaum, Leah “High-tech Japanese adult fare guiding TV trend.” Video Age International, May 1, 2003 Chapter 13 Cherney, Elana “CoolBrands: Low-Carb Bet—Canadian Company Scoops Out a Trendy Ice-Cream Strategy.” The Wall Street Journal, August 18, 2003 4205_P-18(ind).qxd 1/19/04 2:13 PM Page 237 Index Abbott Laboratories (ABT), 158, 159, 163 Abercrombie & Fitch, 165–169, 179, 205 Absolut, 123 Adelman, David, 74, 79, 80, 191 Ader, Jason, 87, 89, 186 Adult Video Awards, 61 Advertising Standards Authority (ASA), 173 Aerpostale, Inc (ARO), 169, 181 Aerospace stocks, 105 Age of Spiritual Machines, The (Kurzweil), 198 Aguilera, Christina, 170 Ahrens, Dan, 2, 3, 14, 127, 137 Alcohol and Tobacco Tax and Trade Bureau, 121 Alcohol consumption, Alcoholic beverages, 115–131 Ali, Muhammad, 169 Alice White wine, 115–116 Alliance Gaming Corp (AGI), 94, 98–99, 186 Allied Domecq PLC (AED), 117, 130 Altria Group, Inc (MO), 3, 39, 41, 70, 77, 78, 81 American Decency Association, 51, 166–167, 173 American Depository Receipt (ADR), 123–124, 171 American Eagle Outfitters Inc (AEOs), 169, 181 American Family Association, 141 Anheuser-Busch Companies, Inc (BUD), 3, 117, 118, 120, 124–125, 129–130 Annual reports, 54–55 Argosy Gaming (AGY), 95–96, 99, 185 Aristocrat Leisure Ltd., 94 Armor Holdings (AH), 109 Arnault, Bernaud, 171 Aspen Edge, 119 Asset allocation, 42–47 AT&T, 143 Atkins diet, 119 Bacardi Silver, 117 BAE Systems Plc (BAESY), 110 Bakker, Jim, 47 237 4205_P-18(ind).qxd 238 1/19/04 2:13 PM Page 238 Index Balance sheet, 55–56 Baldwin, Rich, 95 Bayer AG (BAY), 155, 164 Beer, 118–120 Bennett, Bill, 97 Berenson, Alex, 98 Best-selling products, 58 Beta ratio, 46 Blackmon, Kim, 141 Blair Witch Project, The, 61 Blogs, 62–63 Boeing Company (BA), 108, 112 Booze See Alcoholic beverages Boston Beer Co., Inc (SAM), 119, 131 Bostrum, Nick, 199 Boyd Gaming Corporation (BYD), 91, 100–101 British American Tobacco PLC (BTI), 3, 70, 77, 78, 82 Brothels, 146 Brown & Williamson Tobacco Corp., 70 Brown-Forman Corporation (BFB), 118, 130 Bud Light, 120 Busch Gardens, 124 Bush, George W., 184, 185 Butler, C Anthony, 154, 155, 156, 157, 159, 160 Butler, Tony, 62 Bynes, Amanda, 166 Cake, 137 California Public Employees’ Retirement System (Calpers), 37–38 Calvin Klein, 172 Canada Medical Cannabis, Inc., 190 Captain Morgan, 122 Carlucci, Frank, 108 Carlyle Group, 108 Carnegie, Andrew, 19, 40–41 Carnegie Corporation, 41 Carnegie Endowment, 41 Carnegie Teachers Pension Fund, 41 Carney, Hampton, 168 Carter, Grady, 70 Carter-Wallace Inc., 12 Cash flow, 56 Cashless slot machines, 90–91 Cell phones, 200–201 Chamberlain, Wilt, 169 Chat rooms, 61, 62 Check Point Software Technologies (CHKP), 109 Christian Dior, 172 Church & Dwight Co., Inc (CHD), 144–145, 150 Cialis, 154, 155, 156, 157, 159–160 Cigarettes (Parka-Pope), 69 Ciroc, 122 Cisco, 195 Citizens for Community Values, 141 Citywire, 77 Comcast Corporation A (CMCSA), 143, 148 CompuDyne (CDCY), 109 Condomania, 144 Condoms, 144–145 Conner, Roger, 142 ConSexion, 195 Constellation Brands (STZ), 127, 131 Coor’s (RKY), 119 Crown Royal, 122 Crum, Carter, 3, 207 4205_P-18(ind).qxd 1/19/04 2:13 PM Page 239 Index 239 Cuervo, 121, 122 Culverwell, James, 154 Dahl, Sophie, 173 Daily Planet, 146 Daschle, Tom, 188 Dating services, 203–204 de Cubber, Samuel, 172 Deep Throat, 136 Defense sector, 103–113 Defense spending, 103–106 and stock market, 104 De Sole, Domenico, 174 Devine, Danielle, 52 Diageo PLC (DEO), 117, 118, 121–124, 129 Digital Playground, 200 Distributors, 61 Ditka, Mike, 157 “Doc’s” Hard Lemon, 120 Dole, Bob, 151 Domini, Amy, 17 Domini 400 Social Index, 17 Domini Social Equity Fund, 17, 22 Domini Social Index, 22–36 Domini Social Investments, 17, 37 Dossin, Jacques-Franck, 172 Dreman, David, 78 Drugs, 151–164 Dunkin’ Donuts, 66 DVDs, 138 pornographic, 199 Eddie Bauer, 166 Egan, Tomothy, 141 Electronic Arts Inc., Eli Lilly and Company (LLY), 155, 159, 163 Employee Retirement Income Security Act (ERISA), 37 Energy drinks, 126 Enron, 39, 42 Erectile dysfunction (ED), 151 Estée Lauder, 205–206 Ethical issues, 19–47 Falcone, Marc, 95 Falwell, Jerry, 166 Female sexual dysfunction, 160 Fidelity Magellan Fund, 49 Fidelity Select Food & Agriculture Fund, 12 Financial documents, 55–56 Fitch, Stephane, 138 Fleiss, Heidi, 146 Flynt, Larry, 135 Food consumption, Ford, Tom, 173, 174 Fortune Brands, Inc., 130–131 Frederick’s of Hollywood, 176–177 French Connection (FCUK), 174–176 Gadzooks, Inc., (GAD), 169, 180 Gale, Richard, 200 Gallaher Group, 77, 78 Galvin, Tom, 1–2 Gambling, 83–101, 185 history of, 84 legislation and, 92–94 Gambling industry, 38 Gambling Control Board, 86 Gambling industry news, 187 Garnier, Jean-Pierre, 156 Gates, Bill, 36 Geezy, Christopher, 37 General Dynamics Corporation (GD), 107, 111 General Motors Corporation, 144 4205_P-18(ind).qxd 240 1/19/04 2:13 PM Page 240 Index Giselle, 176, 177 Glasser, Adam, 134 GlaxoSmithKline, PLC (GSK), 162 Glickman, Adam, 144 Goldstein, Al, 140 Goodman, Oscar, 87–88 Good Vibrations, 137 Gordon, Carl, 155 Gore, Albert, 184, 195 Gospel of Wealth, The (Carnegie), 40 Greenwald, Burt, 38 Grey Goose, 123 Gross domestic product (GDP), 103 defense spending and, 103 Growth stocks, 43, 45 GTECH Corp (GTK), 186 Gtech Holdings (GTH), 94 Gucci Group, 172–174 Guccione, Bob, 140 Gulfstream, 107, 111 Halbert, Terry, 38 Haptics, 199 Harrah’s Entertainment Inc (HET), 12, 91–92, 189 Hefner, Christie, 138 Hefner, Hugh, 20, 133, 153 Helman, Christopher, 127 Hemingway, Ernest, 166 Herbert, Mike, 120 Hilton, Paris, 195 Hirsch, Steven, 136 Holograms, 200 Homedics, 54 Homeland Defense Agency, 108 Homeland Defense Industry index, 109 Homeland Security, 104, 105, 108 Hoskins, Jeff, 140 Hotel in-room entertainment, 141–143 Hot Topic (HOTT), 169, 180 Hughes Electronics Corporation (GMH), 144, 149 Hulbert, Mark, 46 Hunker, Jeffrey, 189 Hurley, Elizabeth, 170 Hussein, Saddam, 42, 134 ICOS Corporation (ICOS), 155, 159, 160, 163–164 Indentix (IDNY), 109 Imperial Tobacco Group, 77, 78 Information gathering, 56–57 Interactive TV, 200 International Game Technology (IGT), 94–95, 99, 186 Internet, 136 Internet Security Systems (ISSX), 109 Invesco Leisure Fund, 12 InVision Technologies, Inc (INVN), 109, 113 Ionic Breeze, 54, 58 Isaly, Samuel, 158 James, David, 136 Jameson, Jenna, 135, 136 Jeffries, Mike, 168 Johnnie Walker, 121, 122 Johnson & Johnson Inc ( JNJ), 36, 52, 162–163 Kaminsky, James, 140 Karan, Donna, 171 Keegan, Paul, 136 Kennedys, The, Kerkorian, Kirk, 87 Kernes, Mark, 135 4205_P-18(ind).qxd 1/19/04 2:13 PM Page 241 Index 241 Kersh, Charles, 138 Ketel One, 123 Kipling, Rudyard, 41 Kiplinger’s Personal Finance, 125 Kline, Richard, 145 Klinefelter, Jeffrey, 167, 178 Kombucha, 126 Krispy Kreme Doughnuts, Inc (KKD), 66–67 Kurzweil, Ray, 198 K-Y, 51–52 Kyl, John, 188 L-3 Communications Holdings, Inc (LLL), 3, 106, 109, 113 Labatt, 119 L.A Gear, 65 Laguna Research Partners, 108–109 Las Vegas, 84–85 Lauder, Leonard, 206 Levin, David, 37 Levitra, 154, 155–156, 157 Lewinksy, Monica, 134 Liberty Media, 142, 143 Limited Brands, Inc., 176, 178, 181 Lindsey, Lawrence, 188 Liquor See Alcoholic beverages L.L Bean, 166 Lockheed Martin (LMT), 106, 111 LodgeNet Entertainment Corporation (LNET), 142–143, 148 Loews Corp (LTR), 82 Long Beach Brewing Company, 120 Lopez, Jennifer, 58, 170 Lords, Traci, 135 Lorillard (LTR), 76 Lotteries, 97 LVMH (Louis Vuitton Moet Hennessy), 171 Lynch, Carolyn, 49 Lynch, Peter, 49–50, 64 MacKenzie, Ragen, 159 Macugen, 42 Madonna, 205 Madrigal, Mollee, 53 Mallon, Jack, 108 Malone, John C., 142 Malternatives, 116, 117–118, 120 government rules concerning, 121 Marc Jacobs, 171 Marijuana, legalization of, 190–191 Marlboro, 76 Martin, Mark, 157 Mateschitz, Dietrich, 125–126 McDarrah, Tim, 87, 88, 89, 97 MGM Mirage (MGG), 91, 101 Michelob Ultra, 119 Microsoft, 3, 12, 36, 184 Middleton, Timothy, 41 Milken, Michael, 86 Miller Brewing Company, 118 Miller Lite, 119 Mobile Entertainment Corp (MEC), 204 Mobile phones, 200–203 Modern Girl’s Guide, The, 52 Montgomery, John, 41 Morgan, Burton D., 12–13 Morgan, J.P., 40 Morgan FunShares, Inc., 12 Motorola, 201 Multimedia Games (MGAM), 96, 100 4205_P-18(ind).qxd 242 1/19/04 2:13 PM Page 242 Index Murphy, Ramon, 76 Mutual funds, 47 Mutuals.com, Nasdaq, 142 National Coalition for the Protection of Children and Families, 143 National Law Center for Children and Families, 142 Native American casinos, 96 Nevada Gaming Commission, 91 New Frontier Media, Inc (NOOF), 138, 141, 147 Newman, Paul, 157 News Corporation Limited (NWS), 144, 149 Newsletters, 62 Neimann, Juli, 120 Nike, 15 Nisbet, Paul, 103 Nokia, 201 Nordstrom, 37 Northrop Grumman Corporation (NOC), 106, 112 On Command (ONCO), 142 Online gambling, 187–189 OSI Systems (OSIS), 109 Over-the-counter (OTC) stock, 142 Oxley, Mike, 187, 188 Pacific Sunwear of California, Inc (PSUN), 169, 180 Palmeiro, Rafael, 157 Parker-Pope, Tara, 69 Park Place Entertainment Corp (PPE), 91 Pattengill, Maggie, 53 Pay-per-view television, 136 Peacock, Dave, 119 Pearson, Ian, 196 Penn National (PENN), 96–97, 98 Penthouse, 139 PerkinElmer, 109 Pernock, David, 156, 157 Pfizer (PFE), 19, 41, 151, 157, 158–159, 161 Philip Morris Cos., 12, 70, 79 Picking stocks, 43–44 Pinault-Printemps-Redoute (PPR), 174 Pincus, Robert, 13 Pink sheets, 142 Pirko, Tom, 118 Playboy Enterprises, Inc (PLA), 139–141, 148 Playboy magazine, 20, 21, 139–141 Politically correct funds, 14–17 Pony, 169–170 Pornography, 134–137, 141–143 and hotel in-room entertainment, 141–143 impact of VCRs, 136 investing in, 134–135 profitable, 136–137 women’s 137 Portfolio diversification, 42–47 Portfolios, 207 Price-to-earning (P/E) ratio, 43 Pricing power, Prince Charles, 128 Private Media Group, Inc (PRVI), 138, 147–148 Proctor & Gamble Company (PG), 161, 162 Product placement, 51 4205_P-18(ind).qxd 1/19/04 2:13 PM Page 243 Index 243 Quinones, John, 88 Racetrack gambling, 96–97 Raytheon Company (RTN), 112 Red Bull, 125–126 Red-carpet phenomenon, 170 Religious Alliance Against Pornography, 143 Research, 49–67 Rich, Frank, 134 Rick’s Cabaret International, Inc (RICK), 145, 150 Riverboats, 95 R.J Reynolds Tobacco Holdings, Inc (RJR), 79, 82 Roach, Stephen, 128 Robber barons, 40 Roc-a-Fella, 64 Rockefeller, John, 40 Rock Green Light, 119 Roosevelt, Theodore, 166 Rowling, Bob, 141 Ryder, Winona, 171 S&P 500 Index, SABMiller, 117, 118 Sales clerks, 58 Sam Adams Light, 119 SARS, 174 Sauza Diablo, 117, 118 Schmitt, William, 98 Schueth, Steve, 39 Scientific Games Corporation (SGMS), 97, 101, 186 Screw, 140 Seagram Co., 12 Seagram’s 7, 122 Seagram’s VO, 122 Sex sector, 133–150 Shapiro, George D., 104 Sharpe ratio, 45 Sharper Image, 53–54 Shields, Brooke, 172 Shipbuilding, 107 Shuffle Master, Inc (SHFL), 3, 96, 100 Siegel, Bugsy, 85 Sigesmund, B.J., 134 Skislock, Kevin B., 109 Skyy, 123 Skyy Blue, 117 Slot machines, 89–91 Slotmakers, 94 Smirnoff, 121, 122 Smirnoff Ice, 117, 118 Smith, Rod, 91 Socially responsible investing (SRI), 14–17, 21, 36–39 Sopranos, The, Spears, Britney, 134, 135 Speculation, 21 Spitzer, Eliot, 188 Stambaugh, Robert, 37 Starbucks, 66 Statement of income, 56 Station Casinos (STN), 99–100 Statman, Meir, 13–14 Sterk, Richard, 104 Stern, Howard, 206 Stock charts, 184 Stocking Up on SINDEX, 3, 17, 46 Stolichnaya, 123 Stolichnaya Citrona, 117, 118 Strip clubs, 145 Sun Microsystems, 195 Suppliers, 60 Sussman, Sally, 206 Symantec (SYMC), 109 4205_P-18(ind).qxd 244 1/19/04 2:13 PM Page 244 Index Takeda Chemical Industries, 158, 159 Taking the Red Pill: Science, Philosophy and Religion in the Matrix (Bostrum), 199 Tanqueray, 121, 122 TAP Pharmaceutical Products, 158 Taylor, Bruce, 141 Teledildonics, 196 Templeton, Sir John, 12 Testosterone therapy, 161 Tew, Michael, 97 Thin Ice, 120 THQ Inc., Time Warner Inc (TWX), 149 Tobacco, 69–82 brand loyalty, 76–77 declining sales, 74 deep-discount brands, 75 investments, 79–80 lawsuits, 70–74 overseas companies, 77–79 promotions, 75 tax increases, 76 user loyalty, 69 Tobacco companies, 39, 191–194 Tobacco consumption, Trojan condoms, 145 Trump Hotels & Casino Resorts (DJT), 186 Turi, 123 Twitchell, James, 173 Uncertainty, 104 United Defense Industries, Inc (UDI), 106, 107, 113 Uprima, 154, 158, 159 UST Inc (UST), 81 Value stocks, 43, 45 Vargas, Elizabeth, 153 VCR, 136, 195 Verizon, 36 Versace, 170 Versace, Donatella, 170 Viagra, 19, 41, 62, 151–155, 156, 158 Vice, defined, 1, 20 Vice City, Vice Fund (VICEX), 2–12, 17 Vice Squad report, 1–2 Vice stock, 47 appeal of, 13 defined, Victoria’s Secret, 176–179 Video games, Viisage Technology (VISG), 109 Virginia Slims, 76 Virtual reality sex, 196–199 Virtual Sex Machine (VSM), 198 Vivid Entertainment Group, 136, 198 Vivus, Inc (VVUS), 160, 162 Vostry, Martin, 14, 16 Wall, Joseph, 41 Wal-Mart, 15 War, 103 Washington, Booker T., 41 Weapons, 103 Weber, Bruce, 166 Web sites, 61, 62, 63–64 Williams, Billy Dee, 121 Wine, 115–116, 127–128 Wrigley gum, 13 Wynn, Steve, 86, 87, 91 4205_P-18(ind).qxd 1/19/04 2:13 PM Page 245 Index 245 Yacktman, Don, 41 Yacktman Fund, 41 YSL, 172 Zebra Technologies (ZBRA), 109 Zima, 116 Zimmerman, Shanna, 46 ... www.wiley.com Library of Congress Cataloging-in-Publication Data: Waxler, Caroline Stocking up on sin : how to crush the market with vice-based investing / Caroline Waxler p cm Published simultaneously... Ju -9 9 n Se -9 9 p D -9 9 ec M -9 9 ar Ju -0 0 n Se -0 0 p D -0 0 ec M -0 0 ar Ju -0 1 n Se -0 1 p D -0 1 ec M -0 1 ar Ju -0 2 n Se -0 2 p D -0 2 ec M -0 2 ar Ju -0 3 n Se -0 3 p D -0 3 ec -0 $0 Source: Carter... it? The world around him The week he wrote the Vice Squad report, the Mafiosi-centered series The Sopranos was a top-rated show He notes that at the other end of the spectrum the docudrama The