I was watching the market implode again this morning.

Things are getting bad. Very bad. It’s red across the board and Las Vegas gaming stocks are no exception. Las Vegas Sands was $122 a year ago, and now it’s three bucks and change. There is nowhere to run, and nowhere to hide. There are no safe harbors, and unless you actively short the market, you are likely down huge.

Unfortunately, most investment vehicles are structured to “buy and hold”.

I think that “buy and hold” as an investing strategy is antiquated with the widespread adoption of electronic retail trading by absolutely everyone, and the explosive rise in the use of derivatives makes it all the more likely that volatility will be the rule rather than the exception from here on out.

Personally, I don’t think we will ever see a slow and steady grind up ever again as we did in the 20^th Century. I think we will trade in bubbles. Massive upside, massive downside, massive upside, massive downside … that’s going to be the rule rather than the exception. It took the Dow 100 years to get to 1 billion shares in volume. In the last eight years alone, we have quintupled that.

How could the market paradigm be considered the same?

In my humble opinion, “Buy and Hold” is just as risky as any other strategy.

The Internet, once again, changed everything.

Based on “history” the Dow is expected to average 10% a year over a 20-30 year time span.

However, the Dow Jones Industrial Average is 112 years old. The same age as the oldest man in the country.

“Historically”, the S&P is expected to return a bit more than 10% a year over the long term.

The problem is, the S&P was created in 1957. Eleven years before I was born.

The sun rising in the east and setting in the west has been historically established. Cold temperatures in January have been historically established.

Nothing has been historically established in 51 years.

It’s not even a blip on the radar of time. It’s one or two generations.

To put it simply, there is no “history” which supports buy-and-hold investing as an undefeatable vehicle to wealth.

There is no doubt that had you bought the major averages 30 or 50 years ago that you would be in great shape. What does this mean for the next 30 years, though?

Nothing.

Long-term, buy-and-hold worked quite well until 1998, but if you bought and held major averages ten years ago you would now be duly fucked. The Dow has dropped 43% in this year alone.

Here is a rarely discussed aspect to investing:

You need to make roughly 3% a year just to keep pace with inflation. Dow 10K in 1999 (the first time the DOW closed above 10,000) is not the same as Dow 10K in 2008. Dow 10K today is a big loser. If we ever get back there, you have not broken even, you have lost … a lot.

Annual inflation in the last 10 years has averaged around 2.82% per year. A 2008 dollar is worth 28% less than a 1999 dollar.

Excluding dividends, if you had bought the Dow at 10,000 in 1999, you need the Dow to be at 12,800 right now … just to break even. You haven’t made any profit whatsoever unless your investments have made at least 30% in the last ten years … excluding dividends.

I fully realize that dividends, and dividend reinvestment can offset “buy and hold” losses to varying degrees … but they would not have saved you in the last 10 years.

Failure to account for inflation is a common fallacy in Real Estate investing as well. “I made 50% on my house in only 5 years!”. Well, yeah, but after taxes, interest, broker fees, insurance, loan closing costs, maintenance, and inflation, you didn’t make anywhere near 50%.

The dollar in your pocket right now, by design, is losing value as you are reading this.

Such is the nature of fiat currency, kids. All hail the Federal Reserve Act of 1913 when our national motto officially became “Go ahead and spend it, we’ll print more!”.

But I digress. If you want to hear a rant about how the Federal Reserve ass-raped the nation, you can read Ron Paul’s material or watch an Aaron Russo film.

Actually, judging from the last election, you won’t understand a word of it, so don’t bother.

You asked for the Fed, you got the Fed, so eat your shit sandwich and wash it down with a refreshing Big Mac and Coca Cola. Our healthcare stocks aren’t going to go up unless you become a diabetic fatass, so put down the joint that won’t have any negative effect on you, and go forth and consume as much trans-fat as you can get your hands on.

It’s the American way.

That was the rant, here’s the post …

While I was watching the market tick away, I decided to run one of my personal stock screens … just to see if there was anything worth looking over.

You have to start somewhere.

So I took some time to plug in my variables, made a few adjustments, and my software went forth to retrieve my candidates.

Some stocks were in the double digits, some were in the single digits, and one was as low as fifty cents.

And then, there was the anomaly. At the very bottom sat a line item that I thought was some kind of hideous mistake. It was $0.04, as in, four cents.

Yes, FOUR CENTS.

Great, my brilliant stock screener had returned a company that was in Chapter 11 or was selling human feces or something. I was getting ready to wipe it off the screen, but curiosity got the better of me.

How can a stock trade at four cents and still be viable?

Most people wouldn’t bend over to pick up four pennies if they were walking down the street.

I looked up the stock, and low and behold, the company has a headquarters in Las Vegas. This amused me. It was located in Summerlin to be exact.

If any place screams “worthless piece of shit” … it’s Summerlin.

On a screen run at a completely random time of the day, I had found some POS stock that was located only 10 miles from my home. How fitting.

Las Vegas Sands is flirting with penny-stock status, and they are less than one mile from my home, but for now … this is the closest penny stock to my home.

And hey, not only were they a local company, but they were a gaming company.

Wow, how much more “Vegas” can you get than that?

That’s gotta be some kind of sign.

Personally, I stay away from gaming stocks. Far away. I know little about gaming companies or gaming stocks, nor do I care about them. I think publicly-traded corporate casinos have sucked the soul out of Las Vegas, and I’m not sure if I believe in the product yet. I still think casino operations are best left to mob bosses instead of SEC regulated beancounters, but what do I know?

Still … FOUR CENTS for a gambling machine company???

Come on, man.

So I dug deeper.

Apparently, these guys run gaming machines in places such as … wait for it ……….… Cambodia.

I shit you not.

I have never seen a casino made of sticks and held together with mud before.

I guess those “Save The Children” people have to gamble their infomercial money away somewhere.

Speaking of, where are the pictures of the 19 year old hooker that I am sponsoring?

I was promised a schoolgirl uniform.

Anyway …

From what I have ascertained so far, almost all of their current operations are in Asia. And not “Tokyo” Asia, but more like “there are flies buzzing around my dying carcass” Asia.

But what do you want for 4 cents? Google?

The point is that I actually found a Las Vegas based gaming company, with extensive operations in ghetto Asia … for 4 CENTS A SHARE!

The paper and ink for stock certificates cost more than 4 cents.

It was so ridiculous, I had to buy it.

And because the raw number of shares I was able to buy were so impressive, I now consider myself a player in Las Vegas business.

Sure, you may have purchased a thousand shares of Wynn resorts for $30,000 … but I could purchase a thousand shares of my company for only $40.

Suckers!

Sure, you may have some shares of a gaming company, but I can wallpaper my home with the amount of shares I have.

From this point forward, I will have a little greater spring in my step when I walk The Strip. I will randomly stick out my arms, twirl around, and yell “I own this place!”

Sure, I will look amazingly gay while doing so, but I’ll just dismiss my naysayers as haters.

Now when people ask me what I do, I can confidently say “I am the co-owner of a multi-national gaming company based right here in Las Vegas.”

My blowjob ratio is going to skyrocket.

Girls don’t know anything about market cap or PE ratios. Chicks aren’t going to say “What is the 200 day moving average of your company?”

They will drop to their knees and ask for nightclub passes (I am not going to mention that my company does not have a nightclub).

Fine, they may question why we are hopping on the monorail instead of a limo, but I’ll just ask them what they thought of the latest Sex and the City movie and that should be enough to send them into an incoherent babble until we reach our destination.

Move over Sheldon, move over Steve, there is a new player in town, and his name is VegasRex … but feel free to call me “Pimp Daddy”. As a matter of fact, I insist that you refer to me by this name. Don’t make me stage a hostile takeover.

Rest assured that despite my major investment in the gaming sector, I intend to remain humble. As my stock rises to 5 …. perhaps 6 cents, I will strive hard to remember where I came from.

However … if this stock ever shoots through $100, you will see a “VegasRex Hotel and Casino” on the Las Vegas Strip.

Screw the office-building-looking casinos and the lack of innovation that we’ve seen for the better part of a decade.

I will make the greatest casino the world has ever seen, and I will single-handedly turn this town around.

If that is not a reason to root for my new stock, I don’t know what is.

When I drive into Las Vegas, it is usually from Los Angeles.  That’s probably how most drivers come into the city.

Since LA is a pseudo-city, and Las Vegas is a pseudo-city, approaching Vegas during the daytime isn’t of much interest for most Californians unless they are from the Valley or Ventura County and don’t live in the shadow of Downtown LA or San Diego’s hi-rise buildings.

But, imagine being some hayseed from the north … say Idaho … who has never been to LA,  and seeing this town for the first time after crossing hundreds of miles of desert.

It probably looks like an actual city.

Thanks in large part to the Stratosphere, it kind of resembles a dirty, dry, incomplete Seattle.

This week, I got the “pleasure” of making just such a trip … south from the 95 to the 15.  I know thousands of commuters make this trip every day, but luckily I don’t.

It was also the first time I made the drive as a passenger.  I was always driving before, and couldn’t really stare at the skyline.

After making the right on the spaghetti bowl, I kind of got an idea of what that chick from “Showgirls” must have felt like.

You know … if she was real.

I also had that “not so fresh feeling”, so I could really empathize with the character.  To top off the experience, I contemplated stopping to see if Steve would give me the lead role in La Reve, but I only dance 30% accurately, so it would have been futile.

Anyway, I recorded the trip from the spaghetti bowl to Spring Mountain and Las Vegas Boulevard.  On this day, traffic was light and it only took about 5 minutes.

In regards to the soundtrack, I had to make some slight alterations to Lou Reed’s song.

I’m sure he won’t mind because he’s such an affable guy.  Especially when he puts a spike into his vein, and then he’ll tell you things aren’t quite the same.

In my own defense, I have never felt like Jesus’ son.

I’m a fan of vague cultural references that less than 1% of the population understand.

Anyway, sit back and enjoy the ride if you feel like it.

I am heading up to an area which I rarely go to.

“Aliante”

Truth be told, “Aliante” doesn’t really exist.

It is simply a Real Estate Developer’s designation like Summerlin, Green Valley, The Lakes, etc.

“I have a home to show you in Aliante” will command a higher price than “I have a home to show you in North Las Vegas”.

They can also charge HOA fees to measure your grass and alert you when it gets too high … you know, to keep home values high.

HOA vigilance is the reason why homes in Las Vegas have held their values so well for the last three years. 

Sorry, I couldn’t resist.

Anyway, Aliante Station Casino is indeed in the North Las Vegas city limits.  All of the jokes that are directed at North Las Vegas, also apply to “Aliante”.

At one point, I almost got a house in that designated area, but the distance was just too much to deal with.

This will be my first time back there in about a year.  It was desolate back then, and I’m eager to see if the place has filled in a little.

I’m going to check out the new Aliante Station for the CasinoGuide column, and I will probably grab some food when I get there.

I’ll relay some live shots back to this post, and put “real” camera shots and an overview of the new casino on CasinoGuide sometime later this weekend.

I may be doing some traveling over the next few days.

Thank god for laptops and 3G data networks …

Man, the blimp is really expanding its range.

It surprises me how close it appears to get to commercial aircraft, but that’s the FAA’s problem.

Yesterday, I actually witnessed it hovering over the Henderson area.

Obviously it was too far away to read the display, but if I had to guess,  it said something like “Move To A Real City You Lame Fucks!”.

Or maybe they just take the thing out to Henderson when they need to empty the on-board toilets, which would make perfect sense.

Especially if they did it over The District.

“Wow, in addition to fake black people, they even added an authentic urine smell.   The developers thought of everything.

See Kaitlyn, it is a real city after all!”

Fine, this marks my half millionth post about how women can’t drive … but this time I have even more evidence.

Screeeeeeeeeech …. BAM!

“Dude, where’s my bumper?”

How the fuck do you run into a stopped car?

Really, what compels someone to just ride the accelerator into a stopped object in front of them?

I’ll never understand it.

Never.

What goes through someone’s mind as they just cruise into a huge, stationary barrier that is obviously right in front of them?

I can’t even comprehend it, but women seem to do it all the time … often when I am nearby.

Perhaps they get caught up staring at my package and get distracted.

That is how the scenario plays out in my mind, but the more likely explanation is that they are yapping on cellphones (thus trying to walk and chew gum at the same time).

This is what happens when you give women shoes and let them out of the kitchen.

Chaos … pure and utter chaos.

The hell with Barack “Pimp Daddy” Obama and his change.

Executive order #1:  Women stop driving, for a safer America!

VegasRex in 2012.

Together, we can make a difference.