Tag Archives: Wine Beer and Spirits Folio

Sector Watch: Wine, Beer, and Spirits

The stocks of companies that produce and distribute alcoholic beverages have dramatically out-performed the broader market both in recent years.  There are many factors that can lead to the relative out-performance of one sector.  Surprisingly, however, so-called ‘sin stocks,’ including those of companies that produce and distribute alcohol, have a long history of delivering high returns to investors.  Sin stocks tend to fall into the ‘value’ category, but even after accounting for the well-known value premium, a 2005 study, titled The Price of Sin: Effects of Social Norms on Markets, found that ‘sin stocks’ provide additional returns that cannot be explained by the value premium alone.  The study finds that this out-performance is both substantial and statistically significant.  The Folio Investing Wine, Beer, and Spirits Folio demonstrates that this out-performance has persisted in recent years, too. Continue reading