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Question on LVS

Hi Robert,

Like your approach..Any views on LVS..I feel it is still a cheap buy but getting mixed views..interested in your view

I do and I currently own LVS.  What a great week huh?

Ok,  LVS status and my thoughts.

LVS has a huge debt load to carry as you probably know. It also has an active ‘owner’ Adelson that is way up there in age which is my second worry. City center looks like its going forward with new financing from Dubai and this is going to open up a LOT of room inventory especially on the strip. On the other side LVS also has a premium product that has a great location in the middle of the strip. The PA casino goes on line very soon and I have the belief that it will turn profitable very soon after opening. Macau appears to be on the way up as China lessens travel restrictions and it is my belief that China will open it up more especially when they see Singapore open or about to open up later this yr. I also think that Singapore will turn cash flow profitable no later than 2Qt 2010 (based in part by how quickly WYNN went profitable) and fully profitable by end of 2010.  The total wealth of China increases at a bullet train (Japan I know) rate and even in this world downturn China is still increasing by over 6% GDP per annum. Adelson has recently offered to pay off some of the higher cost debt at a discount with the apparent approval of the senior debt holders and this has greatly lowered both my fear and the markets fear of the debt load crushing the company. So with all that being said I am not as big of a bull with LVS as I am an anti bear. I have been a writer of non front month OTM puts for at least six months now. I think the road to making enough profits that the stock sees 20+ is further away than most people (especially DC) want to admit. I think the overall US recovery could be years away and not months. As long as unemployment is high profits will be squeezed and once city center opens its gonna be a tough haul for all the casinos on the stip and worse for those off the strip.  We could see a mini GM situation where Asian opperations support the US along with the debt load and thats not somewhere we want to be.  There is no doubt in my mind that the management of LVS is far and above that of GM though.  Another way to view it is that LVS had the wisdom to expand into Macau and Singapore the way they did even if the jury is still out with Macau. The other major threat is that the White House just pushed the EPA into helping prod along the Cap and Trade legislation. While doubtful of passing the only thing I can think of that would be worse for vegas is maybe dropping a nuke on the city. If that legislation appears to be making it through the Senate its time to jump ship on LVS if your not already beat to the punch. So currently I like LVS but I am a seller of puts and would not buy the stock directly (I do own the covered stock that has been put to me with an average of just under $5 per share). I know its a lot but a quicker answer would be incomplete.

Best of trading to you

Robert