The Olympic Games, Just Like The Money Game, Have Winners And Losers

If an investment had no risk, no downside, no threat of loss, then success is meaningless. Such is the apparent case of the 2012 games in London as far as the assumptive shot-in-the-arm to the economy is concerned. This is according to economist, Nouriel Roubini in an MSN article entitled, London Olympics an Economic Failure.

“…London is totally empty: hotels, restaurants, streets,” Roubini tweeted. “…A zombie city.”

In many economic scenarios from a consumer confidence standpoint, perception can equal reality. Example: People perceive a bank is losing money and going broke. The result? People get scared, take their money out of the bank and the bank loses money and goes out of business. In some cases however, perception can equal the direct opposite effect. The positive economic predictions were also accompanied by a wave of apprehension. In this particular case, UK Policymakers warned that the expected extra million visitors a day would surely bring enormous pressure on the city’s public transport network and overcrowding in the city’s busiest districts. The result? Most Londoners left town or worked from home during the games while most of the tourists kept to the Olympic venues, villages and private parties; thereby avoiding the city’s biggest attractions located in London’s West End.

Almost exactly the same thing occurred 16 years ago at the Atlanta games. The weeks leading up to the Olympics were buzzing with rumors which saturated the city’s residents of the catastrophic traffic nightmares that would most assuredly gridlock their entire infrastructure. As a result, the brave folks that took the risk enjoyed a veritable highway heaven on the way to work because of the mass avoidance of the interstate system.

The bottom line is this: With as much preparation, research, and comparables you have at your disposal, there simply is no sure thing when it comes to investments. There’s always a risk, whether it be from the millions invested by a booming metropolis like London, to a five dollar bet at the Blackjack table. It’s not exactly Las Vegas. But it isn’t entirely unlike it either.