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America’s Ski Town Invasion
By Tom Dyson
January 9, 2006
“Dees ees vonderful!”
The blizzard was so strong, I had to keep my head dipped to stop the snowflakes from stinging my nose and chin. And I couldn’t feel my toes anymore, despite my thick socks and snowboard boots.
But Bobby didn’t care... Even thought I couldn’t see his face beneath his goggles and mask, I knew he wore a big grin.
Yesterday, I shared a chair with Bobby on a long ski lift up the mountain. Bobby is from Finland. He’d flown his whole family over from Helsinki for a week’s skiing in Lake Tahoe. And now it was snowing... hard. Almost a foot had fallen already and the weatherman called for another foot that night. I was freezing, but for Bobby and his family, the snow conditions couldn’t have been better.
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“How’s the skiing in Finland?” I asked, as we crept up the mountainside.
“It’s okay. But we usually prefer France or Austria. This year, however, I had some air miles. When we added up all the costs, it actually worked out a lot cheaper for us to come over to America.”
Bobby wasn’t alone. I heard European accents wherever I went... Irish, French, German, Italian, British… they were all there in Lake Tahoe, taking advantage of the cheap dollar.
Lake Tahoe sits right on the state line between Nevada and California. On the Nevada side, huge glass mega-casinos straddle highway 50, rising up 20 floors on each side. It’s like the Las Vegas strip in miniature, but with mountains in the background instead of desert. The California side is more modest... family restaurants, tourist shops, and dusty roadside motels line the highway.
I came to Lake Tahoe with an equity analyst from a major Wall Street mutual fund company. He covers China.
“I can’t believe how many Asians there are here,” he said. “It’s as if China had invaded Lake Tahoe.”
He had a point. The night before we’d queued up for a table at a casino buffet. In front of us, a gaggle of Chinese teenagers posed for pictures. Behind us, another huge group waited. On the plane, a Chinese student ski team annoyed the rest of the passengers by shouting across the aisles to each other in Mandarin.
And of course, Asian skiers swarmed all over the mountains. It astonished us. One in every three people seemed to be from Asia.
While Europeans and Asians are known to love skiing, it’s not a sport I associate with Mexicans. I shared ski lifts with Mexicans on several occasions. And at one point, at the top of a blue run, I found myself amongst a crowd of Mexican snowboarders, tightening their bindings and arguing about the route down.
The global economic boom is making people rich. Ten years ago, you’d never have seen a Mexican on a snowboard or shared a flight with a Chinese ski team. Now, no one bats an eyelid. And because the dollar is so cheap, the world’s middle classes come to the U.S. to spend their savings.
If I were going to start a business, I’d target the tourists.
The Lake Tahoe resort we skied at is called Heavenly. The largest ski company in the world owns it... Vail Resorts (MTN). In the last three years, its stock price has risen nearly 150%.
I wouldn’t invest in Vail Resorts, even though it could be a good play on the cheap dollar and global prosperity. At 40-times trailing earnings, it’s too expensive… although it has lots of valuable land.
I prefer commodities. As the world grows richer, we’ll build more highways, eat more meat, and drive more cars. A cheaper dollar will exacerbate the situation.
Oil is tanking right now, so are gold and copper. I’d back up the truck... if I hadn’t spent all my money on $7 hot chocolates...
P.S. I’m about to fly to Las Vegas to attend the gargantuan Consumer Entertainment Show... and see how real estate prices are holding up. Stay tuned...
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