U.S. Markets closed

Guilty Pleasures: Investing in Tobacco and Other Resilient Industries

67 WALL STREET, New York - April 3, 2013 - The Wall Street Transcript has just published its Investing in Gold and Value for Downside Protection Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Value Investing - Long-Term Investing - High Quality Companies - Global Investing - Investment Strategies - Large Cap Investing - Longer-Term Investing - High Quality Companies - Investing in Gold - Long-Term Value Conservation - Precious Metals

Companies include: Altria Group Inc. (MO), Wells Fargo & Company (WFC) and many more.

In the following excerpt from the Investing in Gold and Value for Downside Protection Report, an expert portfolio manager discusses his investment philosophy and portfolio-construction strategy:

TWST: What makes something a good company?

Mr. Sheehan: When I say I invest in good companies, I mean good companies I can understand. I want to invest in a company where I can see out 10 years. Additionally, it needs to have a management team I'm reasonably comfortable with, that generates income over time, has a moat of some kind and that is selling at a price I like. Basically, I'm trying to find good to great businesses at good to great prices. And if I'm right about those two things, then generally we'll do fine.

TWST: You mentioned a moat. Would you explain that a little bit?

Mr. Sheehan: Well, it's different in all different cases. They may have a moat because they have some kind of a sustainable advantage in terms of being the low-cost operator or some other area that grants them a certain degree of pricing power. And we are looking for businesses that really can't fail, or I should say, are very unlikely to fail.

An example of that would be tobacco companies. I put a third of the partnership into a company called UST, which has since been acquired by Altria (MO). It was so cheap and such a great business you just knew it wasn't going to go away. There was very little chance governments were going to destroy them because they were dependent on the profits the industry was generating as well. So we are looking for businesses that even if people, powerful people, want to destroy them, for one reason or another, they can't.

TWST: What other important factors do you weigh?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.