Stock Market Secrets: Hail Caesar
Anyone who’s been to Las Vegas will know what I mean when I say it’s a place that everyone has to visit but no one wants to stay.
I tried to get married again. Elvis was prepared to pick us up from out hotel in a stretch limo, take us to the chapel, be our witness and include the officiator, flowers, music and certificate and have us back in our hotel in 30 minutes, all for $199. But the wife wouldn’t go for it. If we’re going to do that again (it would be the third time) she wants the kids there, her girlfriends and a party. By the way, the reason everyone gets married in Vegas is because they have the slackest divorce laws in the US. People go there to get divorced not married. The marriage bit is just an aside.
I had an epiphany whilst I was there. Two in fact. The first was that whilst I have 252,522 hours left to live, not one of them will be spent on a helicopter. Being bounced around at 8am after a night in the Playboy Club is not glamourous.
The second epiphany was about human nature.
Vegas houses some of the world’s most magnificent hotels. The Wynn, the Encore, the Bellagio, the Venetian, the Palazzo, the Palms, the Trump Hotel, the Aria, the Mandarin, the Mirage, the MGM Grand and Caesars Palace to name just a few. And Caesar’s Palace in particular. The most colossal hotel and casino complex you have ever seen.
Begun in 1966 it now boasts five massive towers. The Forum, Roman, Centurion, Palace and Augustus. It has 3,348 rooms all with marble bathrooms and it has eight Roman style swimming pools, 160 restaurants and shops, 4 gigantic ballrooms, 3 wedding chapels and 5 wedding packages, the ‘Simplicita’, the ‘Passione’, the ‘Simchah’, the ‘Amore’ and ‘La Dolce Vita’.
The epiphany was that despite Caesars Palace standing as blatantly as it could, right in the middle of the Strip, as an unembarrassed, gigantic testament to the odds, people still turn up to play. The $3.9bn market cap of Tabcorp and the $3.05bn market cap of Tatts Group are other monuments to that. The spirit of the gambler is indomitable. Faced with almost certain loss gamblers still turn up with hope in their hearts.
A noble trait almost. Or is it? There is a fine line between courage and stupidity.
And the comparisons with the stock market are inevitable. In the casino they distract you with tits and feathers and disable you with drink. Meanwhile somebody has their hand in your back pocket. In the stock market they dazzle us with colourful software, trading platforms, charts and flashy product marketing brochures. Meanwhile we get belted with once in lifetime events every three years.
And as we drove from the airport to the bus we heard our first story of the girl that had put a single dollar in the pokie machine at the airport and won a million dollars, reinforced by casino floor Plasma presentations of other winner’s pictures and their hauls. And so the stock market blinds us with books about “How I made $2,000,000 in the stock market”, by glorifying the success of Warren Buffett, exposing the yacht of Rene Rivkin, by lauding the winners and not the losers. And as the winners buy Ferraris so we will notice them, the losers seek the dark corners of anonymity. We overlook them. Perfect for the industry that preys on them. Thankfully no-one would publish a book called “How I lost $20,000 in CFDs because I didn’t have a clue what I was doing.” Wouldn’t want the losers telling their stories would we.
People love gambling. But when the odds are so obviously against you getting your money out is no more than paying for entertainment, an adrenalin fix, and anyone who approaches it as a serious attempt to make money rather than as a fun activity, is a complete mug.
So before you throw your money down in the stock market, ask yourself this. Are the odds with me, or against me? I know brokers that don’t make money in a bull market. So how do you think you’re going to go in a bear market?