The market “pros” believe stocks are way too expensive right now.
A recent Bank of America Merrill Lynch survey notes a record 83% of surveyed money managers say the market is too pricey.
Investors are taking a big gamble buying some of these expensive stocks, according to these folks who are stuck on some of the high valuations we’re seeing on the market today. These nearsighted investors would be better off flying to Vegas and betting it all on black.
Or maybe not…
You see, pricey stock bets are paying off. The market is roaring higher this earnings season. Investors who took a chance on “expensive stocks” are sitting on some impressive gains.
Meanwhile, the true gamblers who flocked to Las Vegas this spring are going bust. When gamblers lose, Vegas wins. And right now, business is booming.
Sports bettors plunked down a whopping $439.5 million on basketball bets alone last month. That’s a record…
“More money was bet — and lost — on basketball at Nevada sportsbooks in March than in any other month in the state’s regulated sports betting history,” ESPN reports. “The books kept a record $41.2 million of the amount bet on basketball, shattering the previous mark set in March 2015 by more than $13 million and making March 2017 by far the most lucrative basketball month ever for the house.”
The degenerate gamblers aren’t the only folks filling Vegas’ coffers. Big conventions and shows are also helping Las Vegas tourism set records for the past three years, according to Bloomberg.
“Convention attendance was up 3.4 percent in the first quarter due to large events like the Conexpo in March, which drew 140,000 attendees from the construction industry,” Bloomberg reports. “Hotel room rates rose 8.3 percent in the first quarter to an average of $140 a night, according to the Las Vegas Convention and Visitors Authority.”
Of course, this is big news for casino shares. The big three hotel and casino stocks— Wynn Resorts(NASDAQ:WYNN), Las Vegas Sands(NYSE:LVS) and MGM Resorts(NYSE:MGM)—beat earnings expectations last week.
MGM shares blasted to new post-financial crisis highs last week. Both MGM and Wynn are up double-digits over the past month. Las Vegas Sands is up a little less than 5% over the same timeframe.
Las Vegas growth isn’t the only factor driving these casino stocks higher. Across the ocean, Macau is also booming once again. Gambling revenue in Macau jumped more than 16% in April. That marks the ninth straight month of year-over-year increases for the world’s biggest casino town, according to Investors Business Daily.
The worldwide casino comeback is finally upon us! Not too long ago, casino stocks were losing bets for investors. The VanEck Vectors Gaming ETF (NYSE:BJK) peaked in early 2014. Then it crapped out for two straight years, robbing investors’ chips for a solid 24 months.
But it finally looks like these stocks are reversing their fortunes. Every single metric is turning in Vegas’ favor right now, from tourism and convention numbers to news that the NFL approved the Raiders’ move to the city.
As a result, the VanEck Vectors Gaming ETF is back in betting form this week as it pushes to new 52-week highs. After a rough couple of years, these stocks are starting to outperform once again. The sector is now up 17% year-to-date. And it looks like this breakout is just getting started…