Anyhow, I decided through much soul searching to pull out of tobacco. While I don't believe smoking itself is wrong, and I believe everyone has a right to legal choices, and I have nothing against Big Tobacco (heck, this country was built on tobacco!), I have a feeling that it won't end well. Let me explain.
Tobacco is considered a "sin tax". I think that it is wrongly labelled this. Any activity such as smoking or drinking is fine in moderation. However, I didn't buy alcohol stocks because that particular vice, when not done in moderation, can affect others around the consumer (drunk driving, physical/verbal abuse, etc.). Smoking is mostly self-destructive in it's extreme form, and harmless in moderation (cigar, vaping, cig a day, etc.). You ask about second-hand smoke? Nobody is forcing you to breathe it - you CAN leave the area that has it. You CAN open a window. My problem is the evolution, and elimination of tobacco.
E-Cigs are harmless for the most part, and there is little evidence to prove otherwise. I don't mind E-Cigs or vaping at my work, in a theater, at a restaurant. Yet they are still banned at these places. Why? Sure, nicotine is still used in many cases, but the second-hand aspect is all but eliminated. By not allowing E-Cigs & Vaping to flourish, this is leaving open a dangerous door to add OTHER chemicals to these machines which ARE more harmful.
Couple this with the fact that marijuana *is* becoming legal. It is only a natural progression for Big Tobacco to buy the smaller firms that handle this industry to ensure they are "FDA approved" and not unsafe in the manner that you get what you pay for, and nothing else. They have the ability to turn the mass production of tobacco-based products into MJ based products. And MJ, in my opinion, has the same effects on driving as alcohol does, and the same effect as cigarette second-hand smoke, in that it isn't healthy to breathe.
I don't smoke. I don't mind or care if people do. I'm not here long-term, and I may not even see this prophecy of mine come to fruition. So why do I care? Because I plan to leave these stocks to my children to live off of the dividends as well. While I try to raise them with the knowledge and opinions I have, they will still be growing up during a time where societal norms are much different than what I grew up with, and may very well form different opinions. I remember seeing a cigarette pull vending machine at a Big Boy's restaurant, Andy Griffith lighting up now and again, and Big Tobacco relentlessly hounded by the media (yet still flourishing). My kids will be growing up seeing E-Cigs being used by their grand step-father (I mention his relationship to me specifically) and MJ becoming the new societal norm. I don't want one more "cheerleader" for such vices. My children will not be rooting for Altria's new MJ-Nicotine vaping cocktail.
My portfolio transition won't be a fast one. I did sell my 19 shares of Altria AT A NET PROFIT (even after brokerage fees) and reinvested the funds into my second REIT pick, National Retail Properties (NNN). This has the effect of giving me a BETTER YIELD, checking one more box on my diversified portfolio list, and unfortunately, reducing my staple ownership below discretionary (again). Because I eliminated Altria (MO), I put ADM on my watchlist. It actually is very tempting right now. Secure dividend, this food company is at a 52 week low. With the success of Hormel and General Mills coming back from the red, I will probably be buying this soon if it stays at these levels.
Now, there's still the small problem of Philip-Morris (PM) in my portfolio. It is the only stock I own that is below 5% and is actually at -15% as of this writing. I don't doubt it will bounce back (someday), but I can't sell it at its current level. What I *can* do, is tax harvest it in late 2018 for the tax benefits and invest in something else with a better yield, like I did with Altria. If, by some miracle it goes above water + trading fees, I'll cash it out and reinvest.
My averaging down of AT&T is making some great returns, my portfolio is quite healthy, and it is past the initial investment stages. I am very close to buying on dips and adding stocks on my watchlist as the opportunity arises on a regular basis. I am on track to hit $1k per year in dividends, and by April, should increase my contributions by 75%. I am keeping an eye on the new cryptocurrency that MasterCard (MA) is backing, Glint. The Senate just got through their messy tax bill vote, so things are looking up economically. Time to check out David Fish's new list, and buy a Christmas tree! If you remember from my "About Me", I used to keep an artificial tree. Well, 11 months is too long for any item to not be used, so I tossed it. I'm trying out a fresh tree this year.
No comments:
Post a Comment