This is the issue confronting the tobacco company investor. An amazing number of intelligent people treat tobacco stocks as ordinary investment vehicles, to be traded based on the usual criteria of earnings, dividends, market prospects, etc.
Tobacco companies are in a class by themselves.
The normal, ordinary use of their product causes serious physical harm to the customer and widespread economic damage to the customer's family, employer and government. As a result, the tobacco business has more in common with a Ponzi scheme or a game of musical chairs than with a normal investment. Eventually, but at an unpredictable time, courts or legislators will reallocate the burdens of tobacco to those who presently reap the benefits. Whoever happens to own the business at that point, loses. However, management is unable to make a meaningful estimate of the amount or range of loss that could result from an unfavorable outcome of all pending litigation.