Anger: It's hard to find a company that deliberately caters to people intent on harm. Certainly, none admit it. But investors might consider gun maker Smith & Wesson. Its shares are up more than 155 percent, largely because of a reorganization. Pacifists generally regard any defense firm as a sin stock, so for their sake we'll note that Lockheed Martin is up 62 percent and Northrop Grumman 38 percent.
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Pride: With schoolteachers foisting self-esteem lessons off on their minions, it seems unfair to judge pride a sin. But construed more broadly as vainglory, pride offers several compelling opportunities. Fancy-car companies or cosmetic firms would do. Certainly, snooty retailers come to mind: Kenneth Cole, up 8 percent, and Gucci, up 12 percent.
Sloth: Today, sloth is often committed by substituting technology for minor inconvenience. Take the remote control. It's now so powerful that firms market remotes that control other remotes. And why do we need all those remotes? Blame the Sharper Image. It's up 59 percent.
Envy: Like pride, envy drives people into unholy competition. Any self-respecting consumer-goods seller stokes envy, simply by claiming its products will make consumers feel better about themselves in comparison with others. But what can possibly top the envy of the homeowner trying to keep up with the Joneses--especially if the Joneses just knocked down their cozy Cape Cod and put up a minimansion? That's why it's smart to own luxury-home builder Toll Brothers, up 11 percent.
Greed: Peculiarly, greed has not been a winning formula for profits in recent years. In fact, during the late 1990s, it would've made great sense to bet against shares of any company that rewarded its employees heavily with stock options. A more consistent profit play on greed can be had with Harrah's Entertainment, operator of 25 casinos nationally, up 43 percent over the past year.
Still, investors should not get carried away with a strategy based on existential inevitabilities. Houston-based Pauze Swanson Capital Management figured that if the only two sure things in life are death and taxes, why not build a fund around funeral homes and other "death services"? But inevitability is no guarantee of profitability. The Pauze Tombstone fund shut down in 2000, after three years of abysmal returns. Satan's work may be profitable, but when it comes to death, God needs no investment partner.
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