3 ms·
In your analogy of smoking, the returns of smoking companies like Philip Morris have been astronomical.
by tchalla 5y ago
In your analogy of smoking, the returns of smoking companies like Philip Morris have been astronomical.
- The-Bus 5y agoAdult smoking has been on a downward decline in the US for decades and youth smoking peaked in 1997[1]. While I'm sure the returns of stocks like Philip Morris were very good in their heyday, nowadays MO stock does not have astronomical returns. They just have an extremely solid dividend yield. Compared to FB (>21% 5-years) or Snap (>100% 3-years), Altria Group total 5-year returns are just over 10%. Over 15 years, they don't even break 5%[2]. Philip Morris International has a similar story: returns in the mid to high single digits[3]. 1: https://www.lung.org/research/trends-in-lung-disease/tobacco-trends-brief/overall-tobacco-trends https://www.lung.org/research/trends-in-lung-disease/tobacco... 2: https://www.morningstar.com/stocks/xnys/mo/trailing-returns https://www.morningstar.com/stocks/xnys/mo/trailing-returns 3: https://www.morningstar.com/stocks/xnys/pm/trailing-returns https://www.morningstar.com/stocks/xnys/pm/trailing-returns
- tchalla 5y agoIn their heyday is about 30-40y of holding period. So, it seems we have to wait another 20y or so to see single digit FB returns.