Tobacco & Beer Stocks Show True State of Economy: Today's Outrage

NEW YORK (TheStreet) -- Call it a sign of the times -- tobacco stocks are considered best buys by at least one fund manager, Charles Norton who oversees the Vice Fund(VICEX Quote).

Granted, Norton's specialty is investing in companies that capitalize on bad habits such as smoking and drinking.

Yet it still says something about the state of the economy that stocks such as Philip Morris International (PMI Quote) are delivering great returns. (To read more of Norton's comments, click over to Gregg Greenberg's interview.)

According to Norton, global cigarette demand is "proving to be exceptionally resilient."

That explains the 7% jump in Philip Morris International, which holds the international rights to the top-selling Marlboro brand, and the 17% jump in shares of Altria (MO Quote), which peddles Marlboros and other smokes in the U.S.

Reynolds American(RAI Quote) -- home of the Camel, Pall Mall and Winston brands -- is another smoking hot stock with an 11% gain this year.

On the booze side, brewers are the big winners. Expensive wines and single malt scotches may squeeze the wallet too much, but beer is a recession necessity.

Anheuser-Busch InBev is enjoying a 61% spike this year -- despite the brouhaha over the presidential beer party that raised the question of whether it's un-American to drink Bud now that it's owned by the Belgians. SABMiller, another foreign owner of an American classic, is up 15% year to date.

Meanwhile, Boston Beer Co.(SAM Quote), maker of Samuel Adams and one of the few remaining publicly traded U.S. brewers, is up 35%.