The safest assumption in investing just stopped being safe.

People always drink. That one has held through wars, recessions, and every market cycle I’ve traded, and it’s the reason nobody worried about owning the booze names.

Constellation Brands owns Corona and Modelo, one of the largest alcohol franchises on the planet. It was a $260 stock. It now trades around half that, sitting near a 52-week low with a 3% dividend, and nobody wants it.

I’ve been watching this one for a while and I still haven’t bought a share. There’s a reason, and it isn’t the one most people would guess.

Investors like growth. That’s the whole game right now, and Constellation was supposed to be the boring no-brainer that grew forever, because people always drink booze.

Even Brad Pitt announced he after 7 years of being sober, he’s back on the wagon. 

But it’s really got me thinking…and this might sound wild. 

I keep coming back to the idea that alcohol ends up looking a lot like cigarettes. Look at MO.

The stock goes in fits and starts, the dividend holds, and underneath it there’s this long slow decline that never stops. I feel like that’s the shape of this thing.

The demographics are what got me thinking about it. Twenty-two-year-olds aren’t drinking the way we did. Some of that is cost, and $18 for a margarita is an absolute rip-off, so I get it.

But it’s also cultural. They don’t go out the way we went out. Getting drunk isn’t the interesting thing to do anymore, and I don’t know if that comes back on any timeline a shareholder would care about.

Maybe it does. Maybe once that generation starts having kids they’ll need a drink like the rest of us, and the whole thing reverses. I’m not going to pretend I know.

And the dividend buyer in me wants this stock. Three percent on a franchise this size is real money, and there’s a version of this where I’m looking at a bottom right now and talking myself out of it.

I want to be careful how I say this, because I’m not calling the end of alcohol as a business. What I’m saying is that the assumption everybody built the position on, that people always drink and always will, has stopped behaving like a law.

So why am I still not in it?

Cheap isn’t a reason. This thing has been cheap the whole way down. It was cheap at 200, it was cheap at 150, and every one of those was a bargain right up until it wasn’t.

What I want to see is a bounce in the bounce.

Not one green week. A move up, then a pullback that gets tested, and then it holds. That second part is what separates a bottom from a pause on the way lower, and there isn’t any of it here yet.

Without that, buying it means I’m betting my read on Gen Z drinking habits is correct and correct on schedule. That’s a lot to ask of a demographic argument.

So it stays on the list. If the bounce in the bounce shows up, the value and the chart finally agree with each other and I’ll take a hard look.

Right now they don’t agree, and that’s kind of where I am on it.

However, I will be watching Sybil for any specific movements that might change my mind. 

Andrew Giovinazzi