Inflation, recession or stagflation, one idea seems to work: consumers' lust for sin.
Charles Norton, co-portfolio manager of The Vice Fund, and Dan Alpert, managing director at Capital Westwood, offered advice on how to invest in adult pleasures.
Norton says his fund focuses on sin sectors with "economically independent growth," such as "tobacco, gambling, alcohol," which are not tied to the vagaries of business spending or employment stats.
In a recession, "you might hold off buying a refrigerator -- but you'll still buy a pack of cigarettes," explained Norton.
He notes that tobacco is further shielded from the American slowdown, as "it's a global business." Smoking may have decreased in the U.S., but it's still a steady habit everywhere else on earth, he said.
Reynolds American , British American Tobacco , Philip Morris International and Altria (which recently spun off PMI) are all doing strong business -- but Norton prefers Altria best.
Alpert likes "pure-play gaming," free of the complications facing destination-resort firms such as "the MGMs and the Harrahs." His pick: gambling-machine and table operator Penn National Gaming .
Disclosure information was not available for either Norton or Alpert, or their respective companies/funds.