There are many ways to profit from bad behavior. CNBC’s Jane Wells reveals one way to do it, legally! Following are excerpts from the report filed by CNBC’s Jane Wells on “Fast Money”.

Is it more profitable to be naughty or nice?  Charles Norton is very, very bad.

He runs The Vice Fund which invests in four sectors; booze, bombs, bets, and butts... as in cigarette butts.

“We're not champions of these activities in any way. We're investors, bottom line,” explains Norton.

And the bottom line is The Vice Fund (VICEX) is up over 60% in 3 years, nearly double the broader market; it's also beating the S&P year to date, though off its all time high earlier this month.

It's largest holding is Altria (MO) which Norton says is undervalued as tobacco's legal prospects improve.

He also likes British American Tobacco (BTI) , Diageo (DEO), Ambev (AMBV), MGM (MGM), Las Vegas Sands (LVS), slot machine maker IGT (IGT), and Boeing (BA) (Is Boeing is a vice?)

And, not all vices are equal: Norton doesn't like Anheuser Busch (BUD) because he says the domestic beer market's going nowhere. He doesn't like Trump (TRMP), which he says has the worst properties in the underperforming Atlantic City. And he's actually shorting UST Inc. (UST), which produces smokeless tobacco.

Here’s an interesting side bar. The Vice Fund is doing much better than so-called environmentally friendly green funds--even though when you ask the average person he says he'd rather invest in wind farms than cigarettes.

Apparently people say they'd invest in virtue, but they spend their money on vice. That’s good “ad-vice” to follow.

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Trader disclosure: On July 9th 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders. Finerman's Firm And Finerman Own (HD),Finerman's Firm Owns (COP), (JNJ), (KALU), (MSFT), (MDG), (AL), (YUM), (KFT), S&P Puts; Bolling Owns (ICE), (SLW), (NMX) Gold, Silver, Copper, Corn, Natural Gas; Bolling Is Short (FXI) And Owns (FXI) Puts

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