The US created the Mountain Training Center at Camp Carson, Colorado, but a national search for a suitable location for winter / mountain training led to the development of a site in the Rocky Mountains close to Leadville, Colorado. That became Camp Hale, and the 10th Mountain Division became the alpine combat arm of the US military.
These soldiers learned to fight on snow and were a part of the Infantry in World War II. These soldiers trained to fight and survive under the most brutal mountain conditions, fighting with skis and snowshoes, and sleeping in the snow without tents. After the war, many of these outdoor types returned to Colorado and the Ft. Hale area. The returning soldiers and skiers were instrumental in the development of the ski industry in the former mining towns of Aspen and Vail and elsewhere in Colorado.
Times were different back then. Skis were long and made of wood. Skiing was not the industry it is today, and the Denver airport was not clogged with winter ski enthusiasts from the first snowfall to the last.
Also, in the past, there were very rich people. In those days they were called “Millionaires,” but in today’s inflated economy they are better referred to as “Billionaires.” After all, it isn’t that hard to gather up over a million in assets in our inflated economy. Most upper-middle class members have that much in their homes and retirement plans.
But something else has changed in this rich class. You see the old time rich were very conservative. They typically got their money from businesses that created, built, mined, or manufactured something – or else they inherited it from parents who did that. Today’s rich are different. First they are more likely to have amassed their fortune in the financial markets, wheeling and dealing, but not really producing anything. Second, they are far from conservative. Now I’m not referring to their politics, but rather their spending habits.
In his book, “The High-Beta Rich,” Robert Frank, he explains that the term “beta” is a measurement used in stock investing. It is a measure of a stock’s price volatility relative to the market as a whole. That can be a good thing when the market goes up. But it is a bad thing when the market goes down. Investing in high beta stocks is risky. The rewards can be high, but the losses can be pretty high too.
For those who want to learn more about beta and other metrics used in wise investing, I recommend you check out “Value Line.” That is the stock market information source I use. By the way, the last two big downturns in stock values, when others were reporting losses of 20-40%, I did much better than that because my investment strategy is to go with low beta stocks. I did loose money at times, but typically made it back in a short time due to my conservative investment strategy. That greatly improved the long-term performance of my investments even during the last ten years of declining stocks, but that is another story for another day. Today I am using the concept in the same way Mr. Frank used it in his book. Modern day Billionaires, at least a lot of them, ride a roller coaster of risk.
Which brings me to Aspen. This tiny tony town tucked up in the Colorado Rockies is a favorite destination resort for the rich. Many of these beta billionaires have invested in Aspen purchasing large homes (although mansions is a much more descriptive name than the humble term “home”). We’re talking houses with swimming pools, movie theaters, even bowling alleys – and ten bedrooms and 14 baths!
This purchasing drove house prices in Aspen to stratospheric levels. The median price of a house in Aspen was around $6 million before the recent collapse in home values. Now remember what the term median means; half of the houses in Aspen cost over $6 million prior to 2008. Also realize that most of those homes were only occupied two to four weeks out of the year. These weren’t second homes; they were fourth or sixth or tenth homes!
This created an unusual dynamic in Aspen. Fur stores were as common as t-shirt stores in most resort communities. Imported wines and world-class chefs were found in a myriad of eateries. And the people that worked in those stores and restaurants? They had to live 50 to 100 miles away in Glenwood Springs or Rifle because they couldn’t afford rents in Aspen. On the positive side, there was considerable support for charities and non-profits from these rich visitors, and the local tax base was substantial. That paid for snowplows and libraries and concerts and more.
But all that changed when the housing market collapsed. The current median price for houses in Aspen is around $1 million, still pretty pricey; but a tremendous drop in home value, a much larger decline than what the rest of the US experienced. Maybe the billionaires can afford it, but the local shops and restaurants as well as non-profits and tax base have all suffered greatly due to this precipitous loss in value.
I like Aspen. I go there on occasion, and I’ve been involved with the Aspen Institute since the early ‘80’s when I was the chairman of the local library board and attended meetings on literacy. The annual International Design Conference attracted everyone from Eliot Noyes, design director at IBM to George Nelson, lead designer at Herman Miller to Apple founder Steve Jobs.
I’ve even skied there, but – truth be told – it is not my favorite ski resort. I much prefer Vail as a destination resort, or Copper or Breckenridge, or even Winter Park. And I’m much more likely to be found skiing at the non-resort Loveland or Eldora or, when it was around, the old Hidden Valley (later renamed Ski Estes Park) in RMNP.
It is fun to go to Aspen because it is good skiing, and you never know whom you might run into on the slopes. (In the case of my skiing ability, I mean “run into” literally.) But when the hamburgers went over $15 each at my favorite watering hole, I said the heck with Aspen. Besides, it was about the farthest to go ski, and I started skiing closer and closer to home. In fact, these days, I typically limit my skiing to sliding down our driveway while attempting to shovel it.
I am not crying for the poor billionaires who lost their shirt and extra pair of pants in the Aspen real estate market, but I think this little story is just another sign of our times. I don’t know for sure if the rich keep getting richer, but I guarantee that the poor are getting poorer. Trust me, a million dollars just doesn’t go as far today as it used to. Why, at this rate, I’m going to be forced to buy a USED Mercedes.
No comments:
Post a Comment