The case for Altria (MO)

I had dinner with a friend a week ago who also trades and I was telling him why I like MO (Altria, makers and distributors of tobacco products worldwide) amongst other stocks. I don't think I did a great job that night, but now that I've had some more time to think about it here are my reasons why I am liking MO:

• Stressful times. Times are getting tough, credit worries surround us. There's one thing you can count on with humans and that is they are creatures of vices. When times get tough what do most people do? Drink, gamble, smoke, have sex (in no particular order either). Which is the cheapest vice? Smoking.
• The Cause De'Jour is No Longer Smoking. Turn on the television and what do you see? Ads about global warming this and global warming that -- not smoking anymore. The way I gage what the cause de'jour is by watching that Anderson Cooper guy. Whatever he's reporting on in general is the hot topic of today and it ain't smoking. So with the hazards of smoking no longer front and center, I think people (with new added stresses) are going to be more at ease with smokixxxng to relieve stress.
• Overseas profits. A significant chunk of MO's profits come from Europe and with the US dollar weakening that spells great news for profits. Of the times that I've been to Europe, almost every one there I've met smokes and have no cultural or societal qualms about it.
• No StankU Ads. If you do watch television, occasionally you'll see those NoStankYou.com ads, where some guy tries to uncover damning facts about the tobacco industry such as this executive lying about this, smoking causing cancer, etc. Where I think these ads are failing is that they are not tying in the hazards of smoking with the cause de'jour. If you buy into the fact that we live in a functional society (that is where people essentially look for what can do for me) then those ads are falling on deaf ears because it's not clear what not smoking can do for us 'right now'. You won't get cancer. Sorry that's long term. You'll save money. Another long term. If they tie smoking into things like increasing global warming or better into vanity (like smoke and Brad Pitt won't think you're hot anymore ...) then I think the ads will have teeth. Otherwise you're just reinforcing the notion of smoking in people's heads.
• Britney and Lindsay Smoke: Britney Spears smokes. So does Lindsay Lohan. You better believe that little Susie, and Kirsten and Donna are too, and so will their younger sisters and so on and so on ...

Anyways, those are my thoughts on smoking and why I think given the harder times tobacco consumption is going to increase. I've got March 2008 90 calls on MO so cross my fingers.

Bonus: the Jim Cramer guy also likes MO so hopefully he'll generate some nice upward momentum for MO as well. Hopefully the FastMoney crew also jump on board if they haven't already ...