Jim Letourneau's Blog

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No Random Walks in Vegas

Las Vegas is a city of contrasts. Where else in the world would you see world's largest chocolate fountain directly across from the entrance to the spa and fitness centre? The Bellagio fountains thumb their nose at mother nature by blasting tons of water into the air at regular intervals. Deserts are arid?

Walking down Las Vegas Boulevard can teach us lessons about the market. Normally a walk down a busy thoroughfare is a straightforward proposition. You follow the road by walking on the sidewalk that is parallel to it. While it is clear from outer space that properties adjacent to Las Vegas Boulevard were surveyed using a rectangular grid system, designers from the "maze casino" school of architecture were allowed to influence public traffic flows as a result of being asked asked to fund pedestrian infrastructure like escalators and walkways. In Las Vegas, pedestrians are a resource to be harvested, just like the majority of passive investors relying on the financial services industry to get them into comfortable retirements.

A brisk half hour walk from the Bellagio to a giant fashion mall was rife with pedestrian overpasses built at acute angles to the street. I would like to put it on record that it was not my idea to walk to a giant fashion mall in the 99° heat, but I've grown weary of hearing "is that what you're wearing?" before even the most informal social occasion.

Stairs and escalators are hidden from direct view making it easy for people to walk past them even if they are paying attention. Of course that is the whole idea. Every casino and shop is trying to tap into the flowing hordes of pedestrians.

There were numerous "forks" in the sidewalk where the throngs could choose between what looked like a concrete wall where the  narrowing sidewalk terminated and a nice wide vegetated path parallel to the street that featured all kinds of interesting small shops. Of course the dead end was always the correct choice for keeping a straight line route to our destination.

Mr. Market has his subtle methods of tapping into the flow of our capital as well. Fees, fees and more fees will always be grinding down long term returns. Promoters, analysts and investment banks are always looking to direct investor's capital into ventures that they've constructed for such purposes. Hey look! rare earth element stocks were mentioned on CNBC today.