Follow the money? Kinda lemming-like thinking, but never a bad idea. Better, hey – Follow the nefarious, that’s what the big kids do. Example one has already been discussed here in the Bank of America thing. Somebody told me that illegal market is worth some $100 billion a year, but I betcha that’s low. Anyhow, I believe the really cagey money is a step ahead by following the crooks – after all, that’s where all the real money is.
Take a look at The GEO Group, Inc., listed on the NYSE. You will see they are in the security and protection services sector/business. What this means is they are in the “hospitality” buz, operating jails all over the place, and their customers are not the cons they cater (for the most part, anyway) rather, Uncle Sam, and possibly your state, contracts with them. GEO has 28% of the market by bed, cot, bunk – depending on your plan of stay. Good old government contracts. Always easy money in the bank. Anyhow, the banks think so.
Somebody left a copy of GEO’s financial statement on my desk, and I just couldn’t help but notice among others, Wells Fargo owns 7.16% of the outstanding shares institutionally, and controls another 5.32% through mutual funds. Morgan Stanley is not far behind at 6.14% and 1.86% respectively. The list goes on, impressively. Chump change? Not to me. GEO has a market cap (stock price x shares outstanding) north of $900 MM, and Wells and Morgan have more than a third of it. Wow.
Think what you will about the peeps in Washington, DC, it really doesn’t matter to me anymore. Whoever emcees that show is going to make securing our borders and detaining illegal aliens job #1. Add that to our growing federal inmate population (think Enron, HP, ad nauseam), and, well, there goes one out of the park. It’s just like those really bad TV ads for that Head-On stuff. “I hate your commercial, but love your product.” It is impossible to go through an awake day without some mention of Homeland security. I mean think about it for a sec. Two choices here; dead or safe. Ouch. Everybody hates hearing about it, and if we throw enough money at it, it will go away, right? Right.
Anyhow, it seems the banks and government(s) are doing their part here via easy credit to illegals and investments in the future of criminals, but everyone in the hospitality business knows it’s crucial to watch your expenses. If jail is on your horizon, I’m betting the “free” shower caps and sewing kits will be hard as to find as your nail clippers on a plane.