A More Honest Gamble
As the stock market was swooning last week, there I was, wide-awake at 3 a.m., pondering my next move. I don't play high tech or small caps. I ignore semiconductors, telecoms and certainly dot-coms. I'm oblivious to margin calls, and I abhor options. I don't go short or long. And while I skip over blue chips, I do favor green-green and red $25 casino chips. Keep Merrill Lynch. I prefer blackjack at Mandalay Bay.
With four of those green "quarter" chips I have just purchased two cards now staring coldly up at me. A 7 of hearts and an ace of spades -- an 8 or 18, depending whether I count the ace as an 11 or a 1. Holding it as a "soft" 18 would be acceptable -- it's what just about every how-to-play book recommends. But Ziggy, my favorite dealer at the Mandalay -- who is sitting across from me with his knowing smile -- looks down at his one showing card, a 10 of clubs. Ziggy smiles because he knows that I know that he argues against "the book" -- insisting that a player should hit the soft 18 when the dealer's showing a 9, 10 or ace.
Not that Ziggy is guaranteeing anything.
I give it a try. I scratch the table for another card, and Ziggy slaps me with a red 6. Now I have a miserable 14. I have to hit again and am in danger of busting. But out comes a 7 of diamonds that brings me to a cool and triumphant 21. Ziggy flips over his hole card. A queen of spades gives him a losing 20. "This is what I've been telling you," he says as he pushes over my $100 in winnings.
About an hour later, when I am up about $1,800, I have my epiphany. Let's solve the stock-market crisis by turning Wall Street over to the casinos.
Why not? Playing blackjack or roulette or buying corporate stock are all forms of gambling. It's just that casinos are more honest. The game never changes and the odds never budge: The casino has a 5.26 percent edge on the roulette wheel. And only about 2 percent at blackjack. Slot machines run at about 3 percent to 4 percent.
You say you don't like those odds? Are you sure? Well, if you've invested any amount in even the most sure-fire, no-fail stock over the last couple of years, you've been more wildly reckless than a guy who plays, say, his wife's bra size or his idiot cousin's IQ on the roulette wheel. As the June 10 edition of Fortune magazine reported, of the 40,000 stock recommendations made by 213 brokerages during the year 2000, the most recommended stock declined 31 percent in value. And -- yes -- the least recommended stock went up a whopping 49 percent.
In other words, all the stock touts, including gargoyles like Kudlow, Cramer, Cavuto, Insana, and Citigroup's horrible Mr. Jack Grubman, simply did not, do not and will never have a clue. And why should they? That's why it's called gambling -- not winning. And therein resides the real crime of these stock-market shills -- to have participated in a grand conspiracy to convince the American people that playing the market was anything but rolling the dice. (And, as it turns out, shaved dice.)
As a result, we've now got a whole generation of Americans who believed -- until roughly 10 days ago -- it was their God-given birthright to rake in 18 percent a year for doing nothing more than sitting on their asses.
Which brings me back to the wholesome integrity of casino gambling. There is no pretense on either side of the table. No dealer or croupier ever tells you what to bet. Mercifully, there are no 21 analysts or any Caribbean Stud Poker researchers. The very notion is ludicrous. Everyone knows that the luck of the draw or the spin of the wheel is serendipitous. All you know are the odds. Blackjack pays 3-2. A full house 5-1. A straight-up number on the wheel pays 35-1. A corner pays 8-1. Red or black -- even money, of course. Take 'em or leave 'em.
With the house advantage built into the game, there's no need to dupe the player. No need to call in Arthur Andersen to cook the books. Every transaction, every exchange of money, is videotaped. Think something's fishy; the eye in the sky'll be happy to rerun the tape for you. Try that with your Enron 401(k)!
There hasn't been a major casino scandal since the days when Frank "Lefty" Rosenthal (the De Niro character in Casino) was running the Stardust. And when the casino boys do cheat, they leave us civilians out of it and just rip each other off. When's the last time you saw an upstanding casino owner get hauled off in handcuffs like Adelphia gangster John Rigas did last week? (And just to put Rigas' fraud into context: The $60 billion he is alleged to have shaken down from stock investors is enough to construct almost a hundred new Mirage Hotels.)
Likewise, only the most delusionary player believes he or she is owed any payback from the house. You risk, you don't invest. During the 30 years I have played in a casino, I've yet to see one defeated player start moaning that he just lost his retirement fund because he busted out hitting a 15. At least I've never seen anyone publicly admit to such tomfoolery, because only a moron would risk his future pension on an uncertain bet.
Unless, of course, you are one of those 70 or 80 million Americans who just learned the hard way.
So let's get on with the plan. We shut down all the brokerages. Caesar's Palace or Harrah's takes over your old and now- depleted J.P. Morgan account. Programming on CNBC is replaced by 24/7 keno games. New roulette wheels will be minted, and the numbers will be replaced by the names of the Fortune 500. No more poring over boring P&E reports. No more wondering if accountants are hiding losses. You just pick any company you like the name of, and if it comes up on the wheel, you win. If not, you walk. Free drinks and comp show tickets as long as you're playing. And staring face to face with the odds, the bet is you won't be tempted again to put your kid's college fund on the line.
In the meantime, I like 18 red.