Tuesday, October 28, 2008

Las Vegas Sands (LVS) is Now a $4 Stock

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In our continuing series "I can't believe THAT stock is $4" [Mechel is Now a $4 Stock] comes casino Las Vegas Sands (LVS) - I remember debating with someone 8-9 months ago how much of a great short LVS was because people have no idea how bad the economy would become. Ironically the person on the other side of the trade (he pulled down his blog it appears) :) actually made money on a very short term trade on LVS to the long side but look at this whopper of a chart.

Now in full disclosure, while I can't short individual names, this would be one name I *would* of shorted if I *could* short but I would of covered far higher than here (the $20s would of been fine!). It is just amazing to see the total annihilation of some stocks that have nothing to do with banking, or housing or auto, etc. For whatever reason I have a fascination with Vegas because it pretty much is a city built on an era of American excess and is THE proxy of the consumer culture. Vegas is sort of a national canary in the coal mine for the weakness in the US consumer, so that's why I've focused on it constantly in the blog.

As I said countless times - anything to do with consumer discretionary in the US that does not cater to the top 0.5% or the bottom barrel budget areas is going to be in big trouble. It appears the market has come to that conclusion after denying it through 2007 and much of 2008. That said, I am aghast at this chart.

Ironically all the pundits who screamed that the U.S. consumer "would be back" once gas dropped below $3 (when it was $4) and it's time to pile into consumer discretionary stocks, are nowhere to be found now that we're here at $2.50.... I guess the problems were a bit more "widespread" than just gasoline prices.... (ahem) [2nd half 2008 recovery anyone?]

[Oct 3, 2007: A Top in Casino Names? Wynn and Las Vegas Sands]
[Nov 1, 2007: China Can't Save Las Vegas Sands - It's Getting Crox'd]
[Jul 11: Gaming Stocks Absolutely Destroyed Yesterday]

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