Re: British American Tobacco (BATS)
Posted: June 12th, 2019, 12:30 pm
I own both BATS and IMB, and surely for a long time now, the elephant in the room regarding both companies is likely to be some risk of large-scale litigation, either from employees or customers, either current or historical?
Both BATS and IMB form a relatively small part of my overall income portfolio, but I see the potential litigation risks as really quite high, and stories such as the above seem to confirm this...
I have resolved not to buy any more tobacco shares partly because of the risk of litigation (although unlike Itsallaguess, I do not see it as any bigger than it has ever been and besides tobacco companies are past masters at defending themselves) and partly because of the continuing downward trend in the number of people smoking, which I think is a long term bigger threat.
I might even have sold some but not at current prices. Having taken a hit I might as well hang on now and see what transpires, but I cannot close my eyes to the capital loss of the last few years, even although just as it was a paper gain, it is now a paper loss. I am still well in the money having bought both tobacco shares more than 20 years ago, but it is disappointing to see the gains of two or three years ago just disappear in a puff of smoke, to coin a phrase.