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Sin Stocks Are in Season: Schoenberger


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Anyone with ties to Boston will surely be familiar with the old saying, "Lynn, Lynn, the city of sin, you'll never come out the way you went in." Lynn was so bothered by this lyrical attack on its image that the city briefly considered changing its name to Ocean Park and offered an alternative slogan, "City of Firsts," which may have been rhyme-proof but never caught on.

Still, not all sin has to be bad -- at least for your portfolio. Todd Schoenberger, managing director at LandColt Trading says the holidays offer a seasonal opportunity to buy "sin stocks" for a quick trade and a quick buck.

"During the holiday season, especially from Thanksgiving, even past the holidays into the NFL playoffs, you see people that are drinking more," Schoenberger says in the attached video. ''People like to drink their problems away." He adds that advertisements and parties, combined with an ailing economy boost consumption.

According to Schoenberger, Anheuser-Busch Inbev (BUD) has historically enjoyed an 8% run-up during this mini burst of boozing, as does Jack Daniels maker Brown Forman (BF-A).

If you don't want to pick & choose your sin stocks, you can consider a basket like the Vice Fund (VICEX) for example, which is trouncing the S&P 500 this year with its simple 4-vice formula of defense, gaming, tobacco, and alcohol stocks.

The Vice Fund owns well-established aerospace and defense heavyweights Lockheed Martin (LMT) and Raytheon (RTN) as well as gaming names like Las Vegas Sands (LVS) and International Game Technology (IGT).

But for Schoenberger, there's another stock with a special situation that could mean a big bump for the company and it's shareholders: Rick's Cabaret (RICK), which operates about two dozen adult nightclubs.

Texas law requires Rick's and businesses like it to pay a "patron tax" for every customer that comes to the club. But Schoenberger says a pending case before the state's Supreme Court could overturn that, which he says would be a "windfall" for Rick's and its investors.

There you have it. Some good reasons to buy "bad" stocks. Are you buying sin stocks? Let us know in the comment section below or check us out on Facebook.