Bust The Tipsters! - Case #4: The Case of The Caribbean Casino, By MF Cheeze

Bust The Tipsters!

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Case #4: The Case of The Caribbean Casino
By MF Cheeze
A frigid day in February. Blizzard conditions. Wind chill creeping into the single digits, and cold air creeping into your bones. You are dreaming of a balmy clime, a place where every beverage has an umbrella, a land where all is warm and safe...
Suddenly, the phone rings.
"Hey there, pal! It's me again! Got some hot new picks for you!"
The phone chills your hand... It's Cold Call Pete!
"Man, would you look at that market! All kinds of money being made! It's full steam ahead! And I've got some issues that are hot hot hot!"
Hmmm. Cold Call Pete. Never saw a portfolio he didn't want to churn. Somehow you got on his phone list, and so far you haven't managed to shake him.
"Uh, Gee, Pete. I'm really kind of busy right now..."
"So obviously you have no time for chit-chat! I'll get right to the point: You know how big tourism is in the Caribbean, right?"
Ah, the Caribbean. Warm. Inviting. Maybe you'll listen to him just so you can think for a moment of warm breezes and torrid climes...
"Man, those economies are going like gangbusters! Cruise lines! Resorts! Charter airlines! It's crazy how much money they're making!"
"True... true..."
"And the way these emerging nations are booming, even the poorest of the poor have some money to throw around!"
That's right. You read about that in a glossy magazine. One with rich, distinguished-looking guys in suits on the cover. Democracy and free enterprise are spreading everywhere. Third World nations are so far down, all they can do is grow, right?
"So here's the deal. The Bahamas. A gambling casino. A real gold mine."
"But -- aren't there lots of casinos in the Carribean already?"
"One step ahead of you, my friend. You see, this is a special project -- a casino for *natives only!* It's a whole new niche! Nobody has even thought to try this before!"
Is it possible? Could Cold Call Pete have a real prospect here?
"So, what do you think? How many shares should I put you down for?"
As you look through the ice on your windows at a frigid arctic scene, you feel your resistance begin to melt. Is it really that big a risk? What have you got to lose? Maybe you could take just a small position...
But then, the jangling of bells. Are they sleighbells, or...?
You turn to find yourself face to face with none other than Motley Fool, bedecked in his trademark belled cap, swim fins, and Bermuda shorts. "I'd hold it right there, friend!" he warns. "Buying into a natives-only casino in The Bahamas is one gamble I would not take!"
*How did The Fool know to avoid this trade?*
1. The economy of The Bahamas has one of the lowest per-capita incomes in the Western Hemisphere... people there will be buying indoor plumbing long before they think about spending money on anything as extravagant as a casino.
2. The population of The Bahamas is far too small to support a casino catering only to the locals.
3. Bahamian law, while permitting a rich gaming trade among foreign tourists, bars its own citizens from gambling.
4. Strict cultural and religious taboos make most Bahamians reluctant to gamble.

The answer is 3.
It's true... Oddly enough, in The Bahamas, foreigners can play at those velvet tables until they lose their last dime, while citizens of that island paradise must suffer the oppressive indignities of keeping their money safe in their own pockets.
Ignorance is one of the major pitfalls of investing in foreign stocks. Often there are language problems, cultural differences, and legal barriers that make what seems obvious dead wrong. Fools hate to invest in the dark, and that's why one should always use an extra measure of caution before investing overseas, or play it safe and avoid foreign stocks altogether.

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This material is for personal use only. Republication and redissemination, including posting to
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RULES & PRIZES \| HEROES & VILLAINS \| STANDINGS \| ARCHIVE
Case #4: The Case of The Caribbean Casino By MF Cheeze A frigid day in February. Blizzard conditions. Wind chill creeping into the single digits, and cold air creeping into your bones. You are dreaming of a balmy clime, a place where every beverage has an umbrella, a land where all is warm and safe... Suddenly, the phone rings. "Hey there, pal! It's me again! Got some hot new picks for you!" The phone chills your hand... It's Cold Call Pete! "Man, would you look at that market! All kinds of money being made! It's full steam ahead! And I've got some issues that are hot hot hot!" Hmmm. Cold Call Pete. Never saw a portfolio he didn't want to churn. Somehow you got on his phone list, and so far you haven't managed to shake him. "Uh, Gee, Pete. I'm really kind of busy right now..." "So obviously you have no time for chit-chat! I'll get right to the point: You know how big tourism is in the Caribbean, right?" Ah, the Caribbean. Warm. Inviting. Maybe you'll listen to him just so you can think for a moment of warm breezes and torrid climes... "Man, those economies are going like gangbusters! Cruise lines! Resorts! Charter airlines! It's crazy how much money they're making!" "True... true..." "And the way these emerging nations are booming, even the poorest of the poor have some money to throw around!" That's right. You read about that in a glossy magazine. One with rich, distinguished-looking guys in suits on the cover. Democracy and free enterprise are spreading everywhere. Third World nations are so far down, all they can do is grow, right? "So here's the deal. The Bahamas. A gambling casino. A real gold mine." "But -- aren't there lots of casinos in the Carribean already?" "One step ahead of you, my friend. You see, this is a special project -- a casino for natives only! It's a whole new niche! Nobody has even thought to try this before!" Is it possible? Could Cold Call Pete have a real prospect here? "So, what do you think? How many shares should I put you down for?" As you look through the ice on your windows at a frigid arctic scene, you feel your resistance begin to melt. Is it really that big a risk? What have you got to lose? Maybe you could take just a small position... But then, the jangling of bells. Are they sleighbells, or...? You turn to find yourself face to face with none other than Motley Fool, bedecked in his trademark belled cap, swim fins, and Bermuda shorts. "I'd hold it right there, friend!" he warns. "Buying into a natives-only casino in The Bahamas is one gamble I would not take!" How did The Fool know to avoid this trade? 1. The economy of The Bahamas has one of the lowest per-capita incomes in the Western Hemisphere... people there will be buying indoor plumbing long before they think about spending money on anything as extravagant as a casino. 2. The population of The Bahamas is far too small to support a casino catering only to the locals. 3. Bahamian law, while permitting a rich gaming trade among foreign tourists, bars its own citizens from gambling. 4. Strict cultural and religious taboos make most Bahamians reluctant to gamble.
The answer is 3. It's true... Oddly enough, in The Bahamas, foreigners can play at those velvet tables until they lose their last dime, while citizens of that island paradise must suffer the oppressive indignities of keeping their money safe in their own pockets. Ignorance is one of the major pitfalls of investing in foreign stocks. Often there are language problems, cultural differences, and legal barriers that make what seems obvious dead wrong. Fools hate to invest in the dark, and that's why one should always use an extra measure of caution before investing overseas, or play it safe and avoid foreign stocks altogether.