When lots of people smoked, there were many “price-elastic” consumers.
ONE HUNDRED dollars invested in the tech-heavy Nasdaq index at the beginning of January 2024 would now be worth $154. If you had bought American tobacco companies, you would have made an even bigger return, pocketing $165. The share-price boom in part reflects a strange economic phenomenon. In recent years, the operating margin on a cigarette sold in America has grown from about 50% to about 60%. This year cigarette- and cigar-makers are expected to make $22bn of operating profit in the world’s largest economy.
The article originally appeared on Hindustan Times
