Rick’s Picks

Tuesday, November 23, 2004

For investors who’d rather be smart than lucky

In the casino world, Steve Wynn craps bigger than Donald Trump. Wynn left New Jersey years ago, fed up with the Casino Control Commission and the political cesspool that always was, and always will be, Atlantic City.  Before he blew town in the early 1980s, Wynn applied a bit of Zen to quell the violent turf wars that had erupted outside his hotel between some mafia-backed hot dog vendors. Rather than call the cops, he chased away the bad guys by fielding some vendors of his own who literally gave away Coney Island franks and birch beer.

By the 1980s, Wynn had had enough and returned to Vegas for good. Some of the locals – I was one myself – understood even then that, without Wynn, the town’s steep decline into squalor would continue. And so it has. Despite the billions of gaming dollars that continue to flow through the self-proclaimed “Queen of Resorts,” Atlantic City has grown dumpier than ever, like Camden with casinos. Trump, appropriately, is still there, playing out the dreamer-schemer role of the Jack Nicholson character in King of Marvin Gardens.

The Comeback Kid

As of yesterday, The Donald was preparing for yet another comeback when Trump Hotels emerges from its second fling with Chapter 11. “We have one of the most powerful gaming companies the day it comes out [of bankruptcy],” he said yesterday, as the company entered bankruptcy. Summing up the proceedings, Trump put his trademark oily sheen on the whole affair: “I don’t think it’s a failure, it’s a success,” he told the AP. “In this case, it was just something that worked better than other alternatives. It’s really just a technical thing, but it came together.” One of those technical things was that Trump’s stake in the company that bears his name has been reduced to 27 percent from 47 percent. At that rate, Trump shareholders may be able to tell him, “You’re fired!” when a third bankruptcy hits.   

Trump told reporters that his casino holdings represent “less than 1 percent of my net worth.”  If The Donald were down to his last tenement in the South Bronx, he’d still flash that Michigan bankroll. But Trump wouldn’t dare try his hand in Vegas, where he’s just chump change and all mouth. If Trump ever does dare to take on Steve Wynn in Nevada, the world’s premier gambling market, then we’d be forced to concede the possibility that he’s more than just a world-class blowhard with bad hair.

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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2004, Rick Ackerman. All Rights Reserved. www.rickackerman.com