Steve Wynn

My new hero.

Of the many things I like in it those that I like the most;

1. He's essentially shorting America by investing in its vices. Spend money you don't have, sex, live for the moment. He'll be the one with the cash after it's all said and done.

2. He finds it easier to deal with the Chinese government than the US government.

3. His quip on EBITDA. EBITDA, for those of you without the benefit of an accounting degree is your "Earnings Before Interest, Taxes, Depreciation and Amortization."

This measure is basically the most liberal and handicapped measure of a company's profits because (as far as lenders are concerned) this is the amount a company has to pay any loans that are made to it - the money you have before you pay out interest, taxes and account for depreciation and amortization.

I've never liked the concept of depreciation and amortization. I do understand the "matching" principle of accounting in that you spread out the cost of long term fixed assets to match the overall expense with the revenue it helps generate over the years, but for larger companies that are always buying fixed assets to replace the old ones, would simply expensing your purchases outright really make any difference between your cash flow and net income.

I also have a distaste for EBITDA because it was always used by bankers as the measure to see how much debt a company could afford. LITERALLY ignoring the fact the company would have to spend some money SOMETIME in order to keep its operations going. So if you based your loan on the amount EBITDA showed, you were pretty much guaranteed to be lending beyond the payback capacity of the borrower.

Alas, it was these sort of "rocking the boat" observations that attracted the criticism of my now insolvent previous employers, but as Steve Wynn has pointed out the "City Center" project which was financed by the likes of my previous employers, is belly up and bankrupt.