Wednesday, January 28, 2015
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Stung once, and then stung again

stevenson column sig

By
From page B7 | June 22, 2014 |

There was a story that caught my attention on CNBC on Friday morning. It brought me back to the late 1970s, when there was an orgy, an epidemic, you might even call it mass hysteria, about a burgeoning group of stocks.

For years, of course, Las Vegas was the casino capital of the United States – Reno was the little brother – when the New Jersey legislature legalized gambling in down-at-the-heels Atlantic City. In years past, Atlantic City had been the premier beachfront destination for tourists from New York, Pennsylvania and, of course, New Jersey.

Growing up in suburban New York, a trip to Atlantic City scored a 10 on the excitement scale.

Back in the 1950s, if someone mentioned “The Boardwalk,” there was only one place they could have been talking about. But after 50 years or so as a thriving tourist attraction, Atlantic City lost its luster – and its tourist revenue. The “board” in Boardwalk now seemed to refer to the boarded-up storefronts. Property values plunged, as you can imagine.

Then, an economic miracle occurred: The state legislature legalized casino gambling in Atlantic City. The first major casino opened in May 1978, and the city became known as the Las Vegas of the East.

The anticipation was so great that the stocks of the likely beneficiaries exploded. If I remember correctly, the first big winner was the casino operator Resorts International. I believe it was often the most heavily traded stock on the New York – or maybe the American – Stock Exchange. Resorts stock went from the mid-teens to around $170 a share.

Resorts International was not alone, of course; virtually any hotel company that was opening up in Atlantic City saw its stock take off.

But wait! There was another “industry” if you want to call it that, that attracted speculative attention. Didn’t every casino need slot machines – probably hundreds of them? I forget how I got hooked up with an upstart stock called Silicon Gaming, but within weeks I had violated one of the first rules of investing: Never fall in love with a stock.

I’m embarrassed to confess that this “love affair” began just a few years after another gambling-related disaster. This, as I’m sure I’ve related, was a company called Applied Devices. Its main business had been oil drilling support, but they became a big player in state lotteries. In fact, they won the right to run the California state lottery. But, it seems I was haunted by Murphy’s Law; you know, the one that says if anything can go wrong, it will. The lottery business was not enough to keep Applied Devices afloat, and they eventually declared bankruptcy.

Fast forward to the mid-1980s and a client gave me a “tip” – more like a poison pill – on a company called Silicon Gaming. They were the first company to offer an all-electronic, touch-screen slot machine. Not just any slot machine, but a giant full-screen front that invited you to play.

Guess what? After loading up on SGIC, the stock plunged from about $15 a share to such a low price that it was bought out at 11 cents a share. The irony is that the Silicon Gaming model became very popular in the slot business. Too late for the shareholders, though.

I wonder if we can buy a few thousand shares of that now-bankrupt Revel Casino for, say, 2 cents a share?

In the next few years, hotel after hotel opened, all of them featuring casinos. Atlantic City was saved, so to speak, and became one of the fastest growing cities in the country.

Bud Stevenson, a retired stockbroker, lives in Fairfield. Reach him at Bsteven254@aol.com.

LEAVE A COMMENT

Discussion | No comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Recent Articles

  • Enter your email address to subscribe and receive notifications of new posts by email.

  • .

    Solano News

     
    Youngster battles brain cancer a 2nd time

    By Susan Winlow | From Page: A1 | Gallery

    2 Solano road projects get green light

    By Kevin W. Green | From Page: A1

     
     
    Rush Ranch seeks docents

    By Kevin W. Green | From Page: A2

    Health officials report 1st Solano flu death

    By Kevin W. Green | From Page: A3, 5 Comments | Gallery

     
    Kroc Health Fair offers free screenings

    By Amy Maginnis-Honey | From Page: A3

     
    Vanden to host science fair

    By Bill Hicks | From Page: A4

    Woman with Solano ties caught up in tax fraud case

    By Jess Sullivan | From Page: A4

     
    Fairfield police to offer parenting class

    By Ian Thompson | From Page: A4

    Frazier schedules coffee in Suisun City

    By Ryan McCarthy | From Page: A4, 2 Comments

     
    Vacaville police to offer law enforcement academy

    By Ian Thompson | From Page: A4

     
     
     
    Coalition members review tobacco control report card

    By Kevin W. Green | From Page: A5

     
    American Legion Post schedules head-shaving fundraiser

    By Kevin W. Green | From Page: A6

     
    Vacaville Toastmasters welcome guests

    By Amy Maginnis-Honey | From Page: A6

    Chipotle fundraiser to benefit Armijo newspaper

    By Amy Maginnis-Honey | From Page: A6, 2 Comments

     
    Dramas, thrillers lead week’s box office openings

    By Amy Maginnis-Honey | From Page: B8

     
    Suisun City police log: Jan. 24, 2015

    By Susan Hiland | From Page: A12

    Fairfield police log: Jan. 26, 2015

    By Susan Hiland | From Page: A12

     
    Fairfield police log: Jan. 25, 2015

    By Susan Hiland | From Page: A12

    Fairfield police log: Jan. 24, 2015

    By Susan Hiland | From Page: A12

     
    Suisun City police log: Jan. 26, 2015

    By Susan Hiland | From Page: A12

    Suisun City police log: Jan. 25, 2015

    By Susan Hiland | From Page: A12

     
    .

    US / World

    Gold nuggets stolen in smash and grab

    By The Associated Press | From Page: A7

     
    Officials lose track of billions in funding

    By The Associated Press | From Page: A8, 1 Comment

    Bill would treat e-cigs the same as regular cigarettes

    By The Associated Press | From Page: A8

     
    CSU chancellor looks to increase graduation rates

    By The Associated Press | From Page: A8

    Police: Parents who killed selves, kids feared apocalypse

    By The Associated Press | From Page: A13

     
    NTSB: Systemic flaws in safety oversight of gas pipelines

    By The Associated Press | From Page: A14

    Catholic church in San Francisco to phase out altar girls

    By The Associated Press | From Page: A14

     
    Military has wide discretion on Bergdahl charges

    By The Associated Press | From Page: A14, 1 Comment

    Gunmen storm Libya hotel, killing American, 9 others

    By The Associated Press | From Page: A14

     
    Famed civil rights protesters to have arrest records erased

    By The Associated Press | From Page: A14

    Secret talks in Jordan try to win release of hostages

    By The Associated Press | From Page: A14

     
    ‘Wicked storm': Blizzard drops 2 feet of snow on New England

    By The Associated Press | From Page: A14

     
    .

    Opinion

     
    Economic recovery, brought to you by technocrats

    By Jared Bernstein | From Page: A11

     
    .

    Living

    Community Calendar: Jan. 28, 2015

    By Susan Hiland | From Page: A2

     
    Today in History: Jan. 28, 2015

    By The Associated Press | From Page: A2

    Horoscope Jan. 28, 2015

    By Holiday Mathis | From Page: B6

     
    We live close to my nephew but he chooses to remain distant

    By Kathy Mitchell and Marcy Sugar | From Page: B6

     
    10 Things: 10 fresh takes on Super Bowl guacamole

    By The Associated Press | From Page: B7

     
    .

    Entertainment

    Christina Aguilera to perform ahead of NBA All-Star Game

    By The Associated Press | From Page: B8

     
    Common, John Legend to perform ‘Glory’ at Academy Awards

    By The Associated Press | From Page: B8

    Katie Holmes to guest on ‘Ray Donovan’

    By The Associated Press | From Page: B8

     
    .

    Sports

    Falcon boys drop 69-61 SCAC loss to Bethel

    By Marcus Lomtong | From Page: B1 | Gallery

     
    Local Report: Armijo boys roll past Napa 69-41

    By Daily Republic staff | From Page: B1

    Nadal loses; Sharapova to play all-Russian semi in Australia

    By The Associated Press | From Page: B1

     
    Belichick and The Beast talk but don’t say much at Media Day

    By The Associated Press | From Page: B1

    Deflated topic: air pressure in footballs

    By The Associated Press | From Page: B1, 1 Comment

     
    Rose’s shot lifts Bulls over Warriors 113-111 in overtime

    By The Associated Press | From Page: B1 | Gallery

     
    Lynch at Media Day: ‘I’m here so I don’t get fined’

    By The Associated Press | From Page: B1

     
    Manfred hopeful of A’s getting new ballpark in Oakland

    By The Associated Press | From Page: B2

    Christina Aguilera to perform ahead of NBA All-Star Game

    By The Associated Press | From Page: B2

     
    Super Bowl, Tiger make Phoenix center of sports universe

    By The Associated Press | From Page: B2

    Long after Twitter feud, Revis, Sherman pledge respect

    By The Associated Press | From Page: B2

     
    The distinctive international flavor of Super Bowl Media Day

    By The Associated Press | From Page: B2

    Serena Williams advances, Venus out of Australian Open

    By The Associated Press | From Page: B2

     
    Getting fired from New England led to Carroll’s reinvention

    By The Associated Press | From Page: B2

    Sharks in ‘dogfight’ to secure playoff berth

    By The Associated Press | From Page: B2

     
    Jury convicts 2 ex-Vanderbilt players of raping woman

    By The Associated Press | From Page: B2

     
    Rio official says there’s ‘no plan B’ for Olympic sailing

    By The Associated Press | From Page: B2

     
    Golfer Allenby stands by story, says truth will come out

    By The Associated Press | From Page: B2

    Tony Stewart returns with a swagger not seen in 2 years

    By The Associated Press | From Page: B2

     
    Shooters find not every basketball is same in college game

    By The Associated Press | From Page: B2

    Patrick heads into 2015 in final season with team, sponsor

    By The Associated Press | From Page: B2

     
    This date in sports history for Jan. 28, 2015

    By The Associated Press | From Page: B4

     
    .

    Business

    FTC clears Albertsons’ purchase of Safeway

    By The Associated Press | From Page: A14

     
    US home price gains slow in November on weaker sales

    By The Associated Press | From Page: A14

    .

    Obituaries

    Joseph Phillip Raiff

    By Nancy Green | From Page: A4

     
    Clarence E. Morgan

    By Nancy Green | From Page: A4

    Don Johnson

    By Nancy Green | From Page: A4, 9 Comments

     
    Dzhon Athanc

    By Nancy Green | From Page: A4

    Julia P. Tan

    By Nancy Green | From Page: A4

     
    Woodrow Allen Oakley

    By Susan Hiland | From Page: A4

    Donald Wesley Johnson

    By Susan Hiland | From Page: A4

     
    .

    Comics

    Baldo

    By Daily Republic Syndicated Content | From Page: B5

     
    Blondie

    By Daily Republic Syndicated Content | From Page: B5

    Dilbert

    By Daily Republic Syndicated Content | From Page: B5

     
    Rose is Rose

    By Daily Republic Syndicated Content | From Page: B5

    Get Fuzzy

    By Daily Republic Syndicated Content | From Page: B5

     
    Wizard of Id

    By Daily Republic Syndicated Content | From Page: B5

    Peanuts

    By Daily Republic Syndicated Content | From Page: B5

     
    Zits

    By Daily Republic Syndicated Content | From Page: B5

    Garfield

    By Daily Republic Syndicated Content | From Page: B5

     
    Sally Forth

    By Daily Republic Syndicated Content | From Page: B5

    For Better or Worse

    By Daily Republic Syndicated Content | From Page: B5

     
    Pickles

    By Daily Republic Syndicated Content | From Page: B5

    Beetle Bailey

    By Daily Republic Syndicated Content | From Page: B5

     
    Baby Blues

    By Daily Republic Syndicated Content | From Page: B5

    Frank and Ernest

    By Daily Republic Syndicated Content | From Page: B5

     
    B.C.

    By Daily Republic Syndicated Content | From Page: B5

    Sudoku

    By Daily Republic Syndicated Content | From Page: B6

     
    Cryptoquote

    By Daily Republic Syndicated Content | From Page: B6

    Bridge

    By Daily Republic Syndicated Content | From Page: B6

     
    Word Sleuth

    By Daily Republic Syndicated Content | From Page: B6