Fecundity
“It doesn’t matter to me where you are. The sun’s still doing its arc across the sky so there are still plenty of ways to look and see that we’re in this breathing, functioning, fecund world.” - Steven Rinella
What a year. Geopolitical tensions, currency movements, supply imbalances, wavering demand, and shifting consumer sentiment were just a few of the seasonings that added to the flavor. Understandably, it was not to all investors’ taste, souring numerous industries.
At the same time, others began to drool over prospects related to artificial intelligence and other novel technologies. Unfathomable sums of capital have been poured into the bellies of established firms and startups alike, chasing opportunities not yet fully defined. While my views on these undertakings are far from concrete, I can not help but feel guarded, reminding myself of how 2024’s year-end note opened:
Big headlines are often surprising, but how people respond rarely is. There are those on the far ends of the spectrum, declaring that any event in particular is absolutely irrelevant or the only thing that matters. It’s either all roses and rainbows or doom and gloom. 2024 provided no shortage of ammo for people to stray further.
Attitudes across the broad market appear equally stretched. There are vast pockets in which participants find perpetually unprofitable endeavors unusually valuable. But make no mistake: market pricing and underlying value are radically different beasts. At the same time, despite excess capital flocking toward fanciful narratives, there remain deep chasms in the market. Dark. Some are filled with despair. Others simply apathy.
It is those latter chasms that I remain focused on. Headwinds cause some to avert their eyes. Others become fixated on the new ‘hottest thing’. In both cases, attention and capital drain outward. For so long, tobacco and nicotine experienced such a siphon, seen as an industry in permanent decline. 2025 marked a reversal in sentiment, as evidenced by significant run-ups in the share prices of industry constituents, resulting in strong aggregate performance in both absolute terms and relative to indices.
It would be easy and convenient to leave that as a conclusion. However, movements in share price, in and of themselves, are essentially noise, especially when looking at a short period such as only one year. Fortunately, what does matter continues to justify focus on and respect for the industry. The fundamentals remain strong, the industry continues to prove itself a growth industry when measured by profits, and changes within the industry provide opportunities to further enhance capital returns. Critically, while there have been notable movements in share prices, operations still remain broadly underappreciated, with industry multiples remaining far from demanding.
The 2025 archive captures it all, with several pieces deserving a spotlight:
Invariant, 2025 Archive
Resurfaced: FDA Proposal to Drastically Reduce Nicotine Levels in Combusted Tobacco Products
Fecundity
Fecundity
There remains a massive overgrowth of ideas to write about. A goal was set to expand my coverage and subject matter in 2025. I fell partly short, but digging through the ever-deeper details of nicotine has been both enjoyable and rewarding.
What does 2026 have in store? I remain committed to the same predictable publishing cadence. Coverage will still primarily concern tobacco and nicotine. New initiations are likely, as certain pockets of the market are beginning to look especially dislocated. I also intend to inject pieces on philosophy and history throughout the year, and suspect that you will enjoy the similar subject matter we have lined up on the Preferred Shares Podcast.
Regardless of subject matter, the goal is always to publish material that exudes curiosity, creativity, and skepticism and offers a degree of candidness hard to find elsewhere. You should also expect the level of detail provided to continue to increase, and I must thank you for that.
Thank you for helping make Invariant what it is.
It has been wonderful to see Invariant’s readership grow throughout another year. But it is the number of engaged readers, like you, who have made the difference. The network of professionals I have connected with has ballooned, and my research only improves with additional data, perspective, and access. So long as I put in the energy, the virtuous cycle of growing readership, expanding network, and improving insights will not slow. And let me tell you, I have never been so energized.
Happy New Year.
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Ownership Disclaimer
I own positions in tobacco companies such as Altria, Philip Morris International, British American Tobacco, Scandinavian Tobacco Group, and Imperial Brands. I also own positions in Haypp Group, a major online retailer of reduced-risk nicotine products.
Disclaimer
This publication’s content is for entertainment and educational purposes only. I am not a licensed investment professional. Nothing produced under the Invariant brand should be thought of as investment advice. Do your own research. All content is subject to interpretation.
Fecundity is going on my up-and-coming "Word of the year" calendar notes.
Congrats and keep on writing!
Hi Devin - Always enjoy reading your in-depth Invariant articles.
I also particularly liked the 12/5/2025 Preferred Shares podcast (which you co-hosted) & the interview with David Gearhart, CEO and Chairman of Wilmington Holding Corps & how it started out as a surplus lines insurance company. Very interesting & thanks for linking it to your Invariant article.