Gaming and Racing Stocks Index Outpaces Market Again in 2016
by Barry Unterbrink, C.R.P.C.
The Horse Racing FLA’s index of gaming and racing stocks went gate-to-wire last year increasing +23.7%. It continued ahead this year by rising +8% through June 30th. See our year-end web post on 2015’s numbers at https://goo.gl/R4SdnW
The broad performance of the stock market, as measured by the Dow Jones Industrial Average, has risen just 3% by comparison the first six months. That’s some serious out-performance by our Index. The full results through yesterday are reported at the end of this story with some comparison benchmarks.
In general, the shares of both larger and smaller capitalization shares fared nice year-t0-date. Isle of Capri (ISLE) and Eldorado Resorts (ERI) gained 28% each, and are smaller (under $1 billion market cap). But Wynn Resorts (WYNN), $9Billion, and Las Vegas Sands (LVS), $40Billion, also lit up the tote board at +33% and +19% respectively. Two stocks are lower this year, Caesar’s Entertainment and Penn National Gaming. Six of the contestants are still “out of the money” and show losses year-to-date. This shows you that the rest outperformed greatly, and reminds us that this exercise has its risks of adverse selection if you pick and choose which stocks to include. The price swings can be very wide in these stocks, sometimes falling in half, then doubling in price.
We would not advocate constructing an all-equity portfolio using just one market industry; whether it be healthcare, energy, or gaming and horse racing stocks. But our portfolio can be constructed with a smaller portion of your investment dollars that are earmarked for more risk.
Five of the 12 stocks in our index own and operate thoroughbred horse racing tracks*. We will segment them out starting the 4th quarter and report on them in a new index. Here are the comparison results, and the ticker symbols of the 12 so you can follow along with us.
Inception: 1/1/2015 thru 8/25/2016#
Horse Racing FLA Index: +39.6%
Dow Jones Industrials: +4%
S&P 500 Index: +8%
20 Year Treasury Bond: +9%
Gold bullion: +21%
# dividends/interest not included
12 stock index components: *CHDN, LVS, *BYD, PNK, MGM, *PENN, WYNN, CZR, ISLE, *CPHC, *ERI, BJK
In you have questions on our portfolio or for more details, please contact Barry at: firstname.lastname@example.org