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January 21, 2007



I remember using this joke at school. It's arguable that the businesses in such a fund do well just because they are good businesses. Tobacco manufacturing and brewing both have great cashflow and reasonable margins, low macroeconomic gearing - what's not to love? Arms - whoo! government cost-plus contracts! Mining - well, if you get the cycle right it's almost pure profit on those mines that are already developed. Porn - hardly any overhead, high margins. Casinos - licenced robbery.

james higham

That's an interesting point about low volatility stocks. They're no fools, are they?

Acad Ronin

Before getting too excited about the Vice Fund, please note that it charges shareholders 12-b marketing fees (i.e., part of your investment goes to advertising for more investors), a 1.75% management fee, and a 1% churn fee for shares held less than 60 days. Still, I like the idea if not the fee structure. What we need is a good vice index so that Vanguard could offer a Vice Index Fund.


what I don't understand is why an organic, non-GM crop grown on a sustainable basis by some of the poorest farmers on earth (often on family farms that look to me like they would meet the Fairtrade standards) is counted as "unethical".

Maynard Handley

Of course one could reasonably retort that this is no different from investing in, I don't know, maybe Ivory Coast right now. Sure for a few years the returns look great, but the whole point is that there is the risk of massive upsets in the future. The massive upsets may or may not occur, but one does not prove low-probability high risk events aren't going to occur by saying "well they haven't occurred over the last three years".

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