What I learned in Vegas
I got back late last night from a trip to Vegas.
Here are my thoughts from the trip:
- I've been intrigued with casino operators MGM and Wynn as stock ideas, but haven't done nearly enough research to determine how they'll whether this storm...MGM in particular has a huge debt load. I stayed at the MGM Grand, so I was curious if I could spot an ailing business. It was hard to tell if the crowd was smaller than normal (I've been four times now, but that's hardly much of a sample size), but one piece of anecdotal evidence is that tickets were still available for this past Saturday's Ricky Hatton - Paulie Malignaggi fight at the MGM when I got there (not sure if it sold out by fight time). I heard at the poker table that tickets averaged $300 a pop, but I was still surprised.
- I completely buy into the comparisons of poker and investing. Here are the lessons I was reminded of this weekend:
1) You've got to wait for the right hands. You may win calling a raise with queen three unsuited before the flop, but your odds of making money are a lot better folding. One of my biggest weaknesses playing poker is that I have very little patience for folding over and over again. But you have to if you want to make money. Same thing with investing...sometimes there just aren't values out there and you need to stay patient and vigilant. It's very hard to tell beforehand if a company's a queen three unsuited or pocket aces, but the lesson is that there aren't as many pocket aces as we think.
2) You can play poker many different ways and be a great player. A flamboyant aggressive player is no better or worse than a quiet conservative player. But you'd better know your system before you come to the table...making it up on the fly can be disasterous.
3) Just like the talking heads on Wall Street (and your next-door neighbor), every poker player sounds like he knows what he's doing. The most impressive talkers aren't always the best players at the table. Listen to what they're saying (and more importantly, note their actions) and analyze it...don't be fooled by conviction.
4) You don't want to get into the pot with some players. If there are five good players, and five bad players at a table, you should focus on getting into pots with the bad players. In investing, you're better off sticking with what you know rather than industries or countries you don't understand...that's what indexes are for. Of course, you could do a heck of a lot of research as well.
- The brunch buffet at Paris is one of the best buffets I've ever had...breakfast foods including eggs benedict, lunch items, and French flair (a crepe station and cassoulet!). I've never been that impressed with buffets in Vegas (e.g. MGM Grand, the Orleans). They have a lot of different food items, but they're not of the highest quality. Paris is high quality.