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Why I’m Unsure It's the Best Course to Follow Chris Bailey’s Latest Tip - with TW Note.

By Malcolm Stacey | Thursday 10 May 2018


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.


Hello Share Swappers. A fellow Shareprophets scribe and a very nice chap I meet with pleasure at all the Global Group UK Investor Shows, writes to commend investment in Imperial Brands (IMB). That, of course, is a tobacco company.
 
We’ve all seen the health warnings on cigarettes in this country. Therefore Chris Bailey is supporting investing in a product which seriously affects some people. Some share-shifters may be unhappy about that.
 
I take the same view as on investing in cannabis in countries where it’s allowed (yes, I think cannabis should be authorised for medical reasons but not for fun). Chris, a thoughtful chap, is aware of some opposition to tobacco companies. But he adds: ‘My view is between free speech, material information disclosure, advertising and sales restrictions, plus the government's material tax policy, you have enough safeguards.’
 
Well, in my view, not really. For example, money that we buy shares with might go into promotion in countries where there are no restrictions. Where children and young people can see it. Imperial sells its products in 160 markets worldwide. The only final ultimate safeguard against people being made ill from smoking is if tobacco companies disappeared. Now if nobody invested in them that could conceivably happen. Totally unlikely of course, but the theory still applies.
 
From a pragmatic point of view, there may be a limited future to tobacco companies going on to make bigger profits. None of my friends smoke now, compared to probably nine out of ten when I was younger. It’s banned all over the place.
 
Yes, more people are going onto electric smoking. Imperial, to its credit, is a big supporter of this development. Vapour is very popular and I acknowledge that this could help the company to make bigger profits. It also seems much healthier than traditional smoking, and perhaps a first step to quitting.
 
Chris doesn’t smoke himself. Personally I would never invest in a product I could never use, both from an economical view and an ethical one. I don’t suggest Chris is a hypocrite. That would be to make false assumptions. I think he understandably believes in adults doing what they want to do. I do, too. But I’m still uneasy with people becoming ill and its effects on a struggling NHS.
 
Like all British pubs, there’s no smoking in the Punter’s Return.
 
Tom Winnifrith note - Of course smokers are a Godsend to the NHS as they die young and quickly having paid a fortune in sin taxes. It is selfish clean livers who linger for ages with Alzheimers that are the real drag - the facts are here


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