As principal for Applied Analysis, a company he formed in 1997, Jeremy Aguero is responsible for collecting, processing and analyzing economic and fiscal data, then turning those results into recommendations for his clients. That’s a fancy way of saying Aguero is a numbers guy who’s in the speculating business.
That means Aguero very well might have the most stressful job in town right now. Think about it: One day we’re in “economic recovery” happy land and the stock market is soaring; the next day we’re buying gold in bunches and fretting about a double-dip recession.
It’s been an uncomfortable roller-coaster ride to be sure, with Las Vegas witnessing it from a front-row seat. And while Aguero—a 37-year-old, fourth-generation Las Vegan—remains profoundly confident in his hometown’s resiliency, he cautions citizens to brace themselves for a few more dramatic twists and turns ahead. Such as the most recent Dow Jones plunge, an event that provided an opportunity to obtain a state-of-our-economy report from the oft-quoted expert.
What do you make of the recent stock-market volatility?
I think some of the things we’re seeing now [stem from] a degree of over-optimism that we had in the economy during the first six months [of the year] and sort of this return to realism about how robust this recovery really is. Here in Las Vegas, it’s a little bit of the opposite. We were certainly hit worse than almost anywhere else in the nation, and the recession lasted much longer here. But over the past few months, we’ve actually seen progressive improvement, particularly in the tourism industry. So where the nation as a whole is slowing from the recovery, we’re plateauing from the recession.
We’re just very hopeful that those two things don’t intersect and cause our tourism industry to start to slow and send the balance of our economy into what threatens to be a very serious double-dip recession.
What would you invest in right now?
I’ll tell you what I bought this morning [Aug. 9]: Las Vegas Sands [stock]. It dropped substantially yesterday and I see a lot of upside potential there. There’s also opportunity in apartments, particularly as people are transitioning out of housing units; they have jobs but they don’t have equity, they don’t have credit. I also think there is some opportunity in land that is well positioned in the Las Vegas Valley. And if I was in the housing market or had a family member who was, it’s a tremendous time to buy a house.
What’s the most encouraging sign that the Las Vegas economy is on the mend?
Well, not only do we have improvements in visitor volume, which is the key metric, but you also have [increases in] occupancy rates, traffic on I-15, traffic through McCarran International Airport, gross gaming revenue is up, average daily room rate is up. You combine that with pretty strong earning reports by companies like Wynn and MGM [Resorts International] beating expectations, those are things we haven’t been hearing for the past three years. You add to that the fact that we’ve added thousands of hospitality jobs over the past 12 months. Pretty darn encouraging.
So, how much longer is this thing going to last?
I don’t think the question is where exactly the bottom is; the question is, how long are we going to hang out at that bottom? How long is it going to be choppy where one day it’s good news and the next day it’s bad news? That could persist for several years to come. … It’s interesting because I’ve got a group of clients that are still in that mode of, ‘”I’ve got to survive the recession.” And then I’ve got a group of clients that are telling me, “It’s time take advantage of this recovery. Let’s go!”
In your opinion, what’s the best way we can dig out of this mess?
Jobs, jobs, jobs and more jobs. And [better] education, because that’s tied to jobs. Also, we have to look long and hard at our infrastructure, and we need to look long and hard at our higher-education system. There really are a lot of moving parts. … Diversification within our tourism industry is remarkably important, too. You know, people like to say we need to diversify away from gaming; I think we need to diversify within gaming and tourism. The UFC is the best example. Five, seven years ago, that didn’t exist at all in its current form, but last year 90,000 people got in a car or got on a plane and came to a UFC event that was held in Las Vegas. It’s that type of diversification that will ultimately help prop us up.
How has this recession personally impacted you?
Like everyone else, I take a lot closer look at the things I’m spending my money on. And I am almost certain that I bought my house at the absolute peak of the market. I fancy myself a fairly good analyst, so the question is, “Why would you buy your house when you did?” My wife wanted to buy the house that my parents lived in, and my parents gouged me like there’s no tomorrow. So much like a lot of homeowners, I’m upside-down on my mortgage—though not so much anymore because we’ve tried to take steps to pay that down.
But I also think in some ways there’s a psychology to the economic downturn. I’ve found that my interpersonal relationships, particularly with my wife and my children, going through what we’ve gone through, has brought us closer as a family. We’ve been lucky enough that I haven’t been laid off and my wife hasn’t been laid off, so I don’t want to put myself in the same position with folks that have dealt with those types of things. But I’ve felt it professionally and I’ve felt it personally. We live it every day.
You’re a fourth-generation Las Vegan. Is it safe to say you’d never bet against Las Vegas recovering?
I am an absolute believer in what Las Vegas is selling, and that doesn’t just mean the tourism industry. That means we have the ability to pick ourselves up by our bootstraps and fix the education system and do those types of things. I think this community has a unique spirit about it and a unique ability to transition itself. So, no, I would never bet against this town.