​Financial Myths: It’s Better to Light a Candle Than Curse the Darkness, Part II

Michael McTague  |

Last month, this myth opened an investigation of the vast expansion of leisure since the invention of the light bulb. Not that leisure was unknown in earlier centuries, but electric light allows people to enjoy their time off more fully.

Museums Get More Serious

Major museums offer evening hours at least once a week. Now the elite can admire the Impressionists while the staff raises funds. Not so many years ago, Italy suffered many art thefts. Security was minimal. Those of us who traveled to Italy years ago may remember the machines that required a coin to turn on the lights. Otherwise, tourists stood in the dark, holding their cameras, hoping a member of the staff would explain how to illuminate a masterpiece. The tourist industry has matured greatly and the world is beating a path to their door.

Light entertainment continues to expand. According to a Nielsen study, the average American watches five hours of television a day. Employers will be happy to know that this takes place largely after work. The increase in television watching as people age also highlights the close association of leisure and electricity. Even radio, that vast improvement over Morse code, eats up more and more hours. Productivity watchers will be pleased to know that even though Americans spend more time glued to radio and television, they are also working longer hours, according to a Labor Department study. All of this confirms the significance of leisure in contemporary society.

Business Opportunities Abound

Investors love opportunities. The leisure-wealth concoction has ramped up profits. In addition to cruise ships, which we discussed last month, leisure-oriented airlines are booming. Southwest Airlines (LUV) is turning out record profits and Ryanair (RYAAY) bought 200 Boeing 737’s for $22 billion two years ago. The Myth Buster has looked at the Boeing (BA) Airbus (EADSY) rivalry in previous entries. Boeing’s revenue has soared $10 billion in the last two years. Tourism provides a major stimulus to the industry’s success. This is particularly heartening to investors at a time when profits are hard to find.

In addition, travel websites are booming. According to travelweekly.com, the top five travel agencies raked in $200 billion in sales last year. Top-seeded Expedia took in $61 billion. Every place wants a piece of the action. According to The World Travel & Tourism Council (WTTC), travel and tourism accounted for over 10% of world GDP in 2014. In Ireland, WTTC reports tourism boosts GDP 23. Yes, this includes Guinness (DEO) on draft. According to the figures cited here, Icelandic tourism has grown from 5% of GDP in 2000 to 20% in 2012. Roughly 670,000 people visit annually. To show what happens when a beautiful site is difficult to get to, Dettifoss, Europe’s most powerful waterfall, is visited by at most 200,000 a year. Here is an opportunity certain to be developed in the coming years. Expect small planes, better roads and bus tours to open another beautiful site to tourists eager to spend money on beauty. Without the tourist industry on its toes, improving hotels and travel, people might stay home and play bingo or poker to candlelight.

Night Baseball

With the World Series coming up, baseball’s transformation is complete. The major leagues play about 2,400 games in the regular season. Checking the baseball schedule this summer, all games (on a particular Friday) take place at night. That means 2,000 games are under the lights. Television greatly expanded the number of people who can watch a game. For example, according to Forbes, Chicago Cubs games are watched by about 111,000 households, a rising number since the team is having a good year. This far exceeds the capacity of their stadium. Teams could not cover the contract costs of players without this revenue multiplier. Night baseball offers a huge revenue driver for cable television. The Dodgers alone have a well-known twenty-five year deal with Time Warner (TWX) worth $8 billion.

Since night baseball has been around a long time, statisticians – and the number in baseball rival on-line investors – search mightily for differences. Other than the personal preferences of individual players, significant differences between day and night are difficult to find. The transition from day to night does cause challenges – shadows over the mound, the effect of a pitch moving from shadow to sunlight and seeing a fly ball in twilight, where the dwindling light in the sky hides the baseball. An intriguing possibility is the wear and tear of playing day games in hot places, such as Texas. But this has not led to day-night platooning. Players may simply be night people or day people. So far, lighting a candle has not dampened the tenor of the game.

The myth holds up well. Its literal meaning pleases investors in utilities and energy. Antique collectors take comfort because candle holders are valuable. Blue chip investors are happy because candles have new life as aroma providers. The more figurative meaning of the myth is powerful as well. The human desire for leisure advances more rapidly thanks to electricity. Tourism, travel and leisure form quite a mixture, loaded with business opportunities. Increasing wealth makes the concoction boil. A peculiar mixture of the profound and the superficial occupy the hopes and dreams of travelers. Next month, the Myth Buster will pursue more insights into real business opportunities.

Michael McTague, Ph.D. is Executive Vice President at Able Global Partners in New York, a private equity firm.

(Photo 1 by Monica PC)

(Photo 2 by mirluc)

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


Symbol Name Price Change % Volume
RYAAY Ryanair Holdings plc American Depositary Shares each representing five Ordinary Shares 92.74 -0.35 -0.38 391,027 Trade
LUV Southwest Airlines Company 55.01 -0.29 -0.52 3,999,891 Trade
EADSY Airbus SE ADR 38.12 0.86 2.31 150,837
BA The Boeing Company 324.15 -7.85 -2.36 11,061,716 Trade



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