Sticky carpets, cigarette smoke, over priced margaritas, and annoying bachelor/ette parties. That’s what I envision when I think about Las Vegas.
And I don’t even gamble. Clearly, Las Vegas is not my favorite place to go.
But, hey… that’s just me. I know that some people love going to Sin City. The bright lights, the parties, the feeling of ‘escaping it all’… that’s a huge attraction for a lot of people.
When it comes to Las Vegas, I might be in the minority. The reality is that Vegas is a big deal for many people and it’s an even bigger deal for companies. For example, MGM Resorts is a publicly traded company with a market cap of $20 billion. (And that’s not including the other major players like Wynn, Caesars, Las Vegas Sands, etc.)
These casino giants make serious money. And they’re very good at ensuring that their customers continue to spend money with them.
For example, MGM Resorts has a program called “MLife.” Basically, it’s a rewards program that works just like an airline points system.
In a nutshell, the more you spend, the more you are rewarded.
Source: MGM Resorts
If you’ve been to Las Vegas before, then you know about the free drinks and free hotel rooms… (That’s what you get if you gamble enough.)
MLife is basically the same thing, except on steroids. Customers are rewarded based off of their spending habits, their gambling habits, and even what they drink. All of their consumption habits are recorded into a database and then they are rewarded.
MLife members end up getting all kinds of perks that range from free hotel stays to free shows.
But, who do you think ends up winning at the end?
Exactly. The casinos.
While it’s true that the casinos end up taking very good care of their customers, they only do this because it makes sense for their bottom line.
If they treat their customers better, they make more money.
These casinos are smart. They do all kinds of studies and look at all kinds of data to ensure that they are getting the most out of every customer.
In the end, casinos make sure that their customers walk out of the casino with LESS money in their pocket than when they walked in.
So how exactly do they do that?
The casinos will anything to keep you gambling.
Eventually, they know you will lose your money.
The worst customer for a casino is someone who walks out after they have won money. If the casino can’t get someone to lose money through gambling, then they’ll make them spend their money on a show.
Again, the worst customer is someone who walks away from the poker table with a huge pile of chips, cashes out, gets in their car, and drives home.
In fact, casinos hate this so much that they actually ban professional gamblers who do this. And… competing casinos share this list of ‘banned gamblers.’
If you are planning on making money while in Las Vegas, this is the ONLY strategy. You must walk away from the table when you are up.
Same goes for investing.
I mention all of this because we (the Explorer Partnership) had something happen over the past couple of months.
There is a stock we bought that has almost doubled in price in two months. Many E/P members are asking if they should hold or sell.
My response: You can’t go poor by making a profit.
Now, today, I look at the US stock market. The Dow is up over 1,000 points in the last two weeks alone.
Don’t be afraid to take profits.