Full-Tilt Poker: an Opportunity
I’ve always enjoyed looking at online gaming and Full-Tilte Poker: I used to follow Gambling Supplies industry because I always thought there might be an investment opportunity there. gambling supplies put me on the path to research the Gambling Supplies profession. AGEM, The Association of Gaming Equipment Manufacturers has been complaing that Gambling Supplies is being mistreated by the stock market. The Nevada-based, AGEM,who represents casino suppliesand game room productsin the global market, released Monday its monthly 2011 index report and concluded that the market pushed the stocks price down by 7.2%. The bench-mark index they use ended the month of September at 105. September has been the worst month for the AGEM’s index in 2011.
The question for investors and players alike is how the performance of these companies is going to be impacted by Full-Tilt Poker’s meltdown.
For a brief summary of the analysis, please see this video,
For conveniene sake, I asked the good people at gambling supplies to post the video.
In brief, the company had $400 million on deposit–this includes players’ money–while management paid themselves $440 million. You do not have to be a financial wizard, a clever accountant, or understand any math beyond addition and subtraction to see that these numbers don’t add up. As I write this, player’s—some of whom I know have literally thousands of dollars they thought was safe in their account, as long as they weren’t gambling—are going to recover nothing. If you had a thousand dollars on deposit with Full-Tilt poker, you are going to receive nothing.
All of the parties involved, including the big names in poker as well as management, should go to jail and lose everything because of this. At gambling supplies, they have been talking about this for awhile.
I wrote this essay as a way to figure out what was going to happen to KEYWORDCAP1% and the Game Tables For Sale industry. And, in short, the conclusion of this essay is that the Full-Tilt poker meltdown will only help investors who buy into companies that manufacturer Gambling Supplies and Game Tables For Sale because, frankly speaking, I don’t know a rational human who will risk their money by playing online anymore.
A former co-worker approached me about this story and asked for my thoughts. I had heard for years that people were concerned about what was going on with the money they had won and deposited into Full-Tilt Poker. Many analyst who were promoting online Gambling Supplies assumed that the money was being kept on deposit under the care of an escrow account and administered by a in-partial third party. They thought, basically, they could earn interest on the money that the players’ had on deposit and that would be good enough for them. The problem is, and was, is that nobody really had access to the books and they couldn’t do a thorough analysis.
This is false.
They had enough information, but a twenty-something analyst doesn’t have the experience to recognize what is going on with a company and when the number don’t make sense. People, usually players, were questioning this as early as 2008. But, they assumed that the people in charge, the founders and investors, were too smart to fall into this trap (see Chris Ferguson’s much lauded Phd in Computer Science).
There are always winners and losers in any situation, and even though what happened to Full-Title is a disaster for every player, there will still be some companies and industries that come out ahead.
Anecdotal evidence indicates that more people are moving away from playing online and instead investing in Gambling Supplies and their Game Tables For Sale. Thursday night poker seems to be making a comeback as sales for Gambling Supplies and Game Tables For Sale are increasing. People now only want to play against people they know with money they can see: bring the cash and you settle up at the end with a person rather than a vague individual. As long as the currency has value, you can settle up at the end of the evening: end of story.
A friend of mine, a shrink, who has multiple clients who claim they are addicted to gambling, told me that many of them won’t play online anymore. The most disturbed people gambling therapist treat are the people who don’t care if they win or lose, only if they get a rush, so thinking that they might lose their money if another Full-Tilt Poker happens only makes them excited. The important thing to remember is that these people don’t gamble to win money, but they gamble for the excitement. However, these are the minority.
When things go hay-wire in an industry, I start to follow it; and, Gambling Supplies is a part of that pattern.
On the flip side, there is always the contrarian belief that the perfect time to invest in something is when it appears the industry is falling apart. As someone who once sold their soul to an investment banking firm for years and only, at the end, concluded I just learned some fancy tricks in Excel (I was one of those characters who didn’t have to take their hands off the keyboard to work; that is, until Microsoft 2007 came along and, magically, none of them worked anymore. I think this is one of Bill Gates’ practical jokes on the world. He is also gambler who is insanely good at poker.
I like being able to know what a company’s assets are. Software and marketing efforts are not tangible assets, in my opinion, so I always liked manufacturing companies because I could read a balance sheet or drive by the factory to get an idea of value; but I’m bitter and jaded about this because I once worked in distressed debt. Another reason I don’t trust those companies is that for years it was said that certain programs could be written that could take advantage of certain patterns in the way hands are dealt. For instance, getting a pair of Aces seemed to happen more than it should under a random game. This has been counter-acted with significant investments in software for the online gaming companies. But, generating random numbers is impossible and people will dedicate a significant amount of time to beating the system. I don’t see this problem going away.
Online gaming is subject to the laws of the internet—their aren’t any—and the laws of a particular country, which are real, so it’s hard to predict what might happen to an online vice-industry (who would have thought prohibition would become a law of our land). But, people always host parties, bars, casinos, and other businesses will always buy gambling equipment, so I don’t think that anybody involved in the Gambling Supplies and Game Tables For Sale are going anywhere soon. Once again, it is worthwhile to take a look at this Gambling Supplies and Game Tables For Sale industry.
Or, you can follow what I do and just invest in index funds and not worry about individual companies. My investments are bet on the future well-being and prosperity of the economy, not on whether I trust a companies’ management to do what I hope they do.
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5-Second Digital Theodolite w Vertical Tilt Sensor $849.99 |
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Stellar Security Plug In BMW Alarm Shock Motion Tilt Sensor Made in the USA, NEW $320.00 |
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NEW Airmar DT800 Smart Sensor NMEA 2000 Bronze – 0 degree tilt $249.99 |
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StratoLift 1168 Tilt Level Sensor $199.99 |
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SNORKEL HIGH REACH AERIAL SENSOR OMNI DIRECTIONAL TILT $190.00 |
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01- 03 LEXUS LS430 TILT & TELESCOPIC COMPUTER SENSOR P/N 89227-50100 110710-0111 $199.99 |
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ZTE Infrared Sensor 3G WCDMA Video Tilt Pan Zoom Camera TF Memory Spotlight $173.99 |
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new 2 DOF Pan and Tilt With MG995 Servos Sensor Mount kit for Robot Arduino 5set $146.88 |
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2010 LEXUS IS350 IS250 TILT ANGLE SENSOR LINK OEM SWAY $149.00 |
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2010 LEXUS IS350 IS250 TILT ANGLE SENSOR LINK OEM SWAY $149.00 |
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Stellar Security Electronic Tilt Sensor, Hub Cap Protection Works with any alarm $164.99 |
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GENIE AERIAL SENSOR – OMNI DIRECTIONAL TILT – TILT 4.5 DEGREE DELAY 1.5 SECOND $151.00 |
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FACTORY OEM ISUZU GMC TILT CAB MASS AIR FLOW SENSOR MAF 8976019670 $159.00 |
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Electronic Tilt Sensor for Car Rims by Stellar Security NEW $150.00 |
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Electronic Tilt Sensor – Stellar Security – TL1000! New! Free Shipping! $156.99 |
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TL1000 Electronic Tilt Sensor $149.02 |
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10 x ADXL335 module angle sensor module tilt angle module code $148.88 |
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Vtech InnoTab 5″ Color Touch Screen & Tilt-Sensor Interactive Learning Tablet $118.20 |
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1985 Johnson Evinrude 70 Tilt Trim Relay Junction Box Sensor with Wiring $117.00 |
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NXT Acceleration/Tilt Sensor for LEGO Mindstorms NXT $113.39 |
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XX34A Airsight IP WiFi Camera w/ Pan and Tilt, IR Night Vision, Motion Sensor $99.99 |
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honda cbr 1000 rr Tilt sensor switch oem 06 07 SC57 $70.55 |
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Siemens Tilt Switch Probe High Temp Sensor 7MH7143, new $99.00 |
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98-00 LEXUS LS400 WIPER/HEAD LIGHT/TILT SWITCHES STEERING WHEEL SENSOR OEM $89.00 |
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07-11 GMC yukon sierra security tilt inclination sensor $89.00 |
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AM-J543W 36 LED IR lights, CMOS sensor,support WiFi, built-in Pan/Tilt $94.99 |
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1/4 cmos sensor IP wifi wireless camera night vision network camera pan tilt $68.00 |
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NEW OEM TOYOTA LEXUS sc300 sc400 ls400 89233‑50010 (SENSOR, TILT POSITION) $83.95 |
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CAR ALARM SECURITY DIGITAL TILT SENSOR $79.95 |
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HAWK X-50 MOTORCYCLE ALARMS & BIKE IMMOBILISER WITH TILT SENSOR (PRO SERIES) $65.85 |
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HAWK X-50 MOTORCYCLE ALARMS & BIKE IMMOBILISER WITH TILT SENSOR (PRO SERIES) {U} $65.85 |
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HAWK X-50 MOTORCYCLE ALARMS & BIKE IMMOBILISER WITH TILT SENSOR (PRO SERIES) {S} $65.85 |
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SUZUKI GSX1400-5 GSX 1400 CRASH TILT SENSOR FUEL CUTOUT $54.87 |
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CBR600 RR5 RR6 05 Tilt Sensor #6554 $54.87 |
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5 x ADXL335 module angle sensor module tilt angle module code $79.88 |
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1984 HONDA ELITE CH125 CH-125 HANDLEBARS AND TILT/ BANK ANGLE SENSOR 84 85 86 87 $75.00 |
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AM-J541W 1/4″ CMOS sensor,built-in Pan/Tilt and IR lights and wifi, PTZ camera $74.99 |
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Yamaha 07-08 R1 4C8 Fuel Pump Main Relay & Lean Angle Tilt Sensor Relay Switch $58.01 |
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★★★★★ Car Alarm Tilt Sensor ★★★★★ $38.11 |
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YAMAHA FJR1300 FJR 1300 FUEL CUTOUT TILT SENSOR 2007 $47.03 |
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KAWASAKI ZX6R ZX-6R R9F CRASH TILT SENSOR FUEL CUTOUT $47.03 |
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WANSVIEW NCH541W Full Function Security CMOS Sensor Pan/Tilt IP Network Camera B $69.95 |
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HONDA ST1100 ABS STOP SENSOR ASSM. TILT SENSOR $59.99 |
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YAMAHA FZS1000 FAZER FZS 1000 TILT SENSOR $47.03 |
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WANSVIEW NCH541W Full Function Security CMOS Sensor Pan/Tilt IP Network Camera B $66.45 |
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new 2 DOF Pan and Tilt With MG995 Servos Sensor Mount kit for Robot Arduino 2set $56.00 |
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SUZUKI GSXR600-K1 GSXR 600 FUEL CUTOUT TILT DROP SENSOR $39.19 |
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YAMAHA FZS1000 FZS 1000 FAZER TILT SENSOR FUEL CUTOUT $39.19 |
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Lego/HT- NXT Accelerometer / Tilt Sensor (Mindstorms) $59.99 |
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Lego/HT- NXT Accelerometer / Tilt Sensor (Mindstorms) $59.95 |
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TRIUMPH SPEED TRIPLE 1050 TILT SENSOR FUEL CUTOUT 2010 $39.19 |
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HONDA XL125V XL 125-V VARADERO CRASH TILT SENSOR FUEL CUT OUT SWITCH 2008-2011 $39.19 |
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V4 Sensor Shield CDS TILT Magnetic DS18B20 LED Buzzer PBVR KIT Arduino Freeduino $60.00 |
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Mercedes 208 202 CLK430 CLK320 ALARM CONTROL MODULE $59.99 |
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Wireless WiFi 2-Audio IR Night Vision IP Camera Security CMOS Sensor Pan/Tilt $59.99 |
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NICE SAAB 9-5 SE AUTO (1998 – S REG) TILT SENSOR 45 88 232 $49.99 |
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Honda CBR1000RR RR4 RR5 Fireblade 04 – 05 Tilt Switch Sensor Cut Off #23664 $36.05 |
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yamaha yzf r1 Tilt sensor switch oem 04 05 06 RN12 $23.51 |
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Honda ST1100 Pan European Tilt Sensor #9295 $31.35 |
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SUZUKI GSXR1000-K1/K2 GSXR 1000 CRASH TILT SENSOR FUEL CUTOUT 2001-2002 $31.35 |
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APRILIA RSV1000 RSV 1000 MILLE CRASH TILT SENSOR CUTOUT $31.35 |
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Toyota Sensor 89230-20011 JDM tilt steering control $49.99 |
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HONDA CBR600RR CBR 600RR 600 RR 07 08 09 10 TILT SENSOR $44.95 |
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Honda CBR929 Fireblade RRY RR2 00-01 Tilt Sensor #22292 $31.35 |
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TRIUMPH THRUXTON 900 T100 CRASH TILT DROP CUTOUT SENSOR $31.35 |
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TRIUMPH SPRINT RS 2003 FUEL CUTOUT CRASH TILT SENSOR SWITCH $31.35 |
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TRIUMPH SPRINT ST 1050 TRIPLE FUEL CUTOUT CRASH TILT SENSOR SWITCH 2005-2009 $31.35 |
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KTM RC8 1190 CRASH TILT SENSOR FUEL CUTOUT SWITCH *LOW MILEAGE* 2008-2011 $31.35 |
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yamaha yzf r6 Tilt switch sensor fuel cut off oem 06 07 $20.37 |
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yamaha yzf r6 Tilt switch sensor fuel cut off oem stock 06 07 $20.37 |
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Suzuki GSXR1000 K1 K2 01-02 Tilt Sensor #15025 $31.35 |
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2006 Honda CBR 1000RR OEM Tilt Switch Sensor $51.33 |
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HONDA CBR600RR CBR 600RR 600 RR 07 08 09 10 TILT SENSOR *WORKING* $50.99 |
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5pc x The ADXL345 modules axis digital gravity angle sensor tilt angle of module $39.99 |
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Digital Tilt Sensor $38.11 |
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Digital Tilt Motion Sensor – DEI 507M $33.82 |
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GSXR750 SRAD tilt sensor #9139 $23.51 |
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GSXR750 SRAD & others tilt sensor #9145 $23.51 |
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kawasaki zx 6r 636 Tilt sensor engine cut 05 06 oem $15.67 |
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Suzuki GSXR1000 03 K3 K4 Tilt Sensor #9699 $31.35 |
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Honda CBR929RR 929 CBR tilt sensor and bracket 95265 $35.00 |
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KAWASAKI VN900B VN 900 CLASSIC TILT SENSOR $38.99 |
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SUZUKI GSXR600-K2 GSXR 600 2002 FUEL PETROL TILT SENSOR $23.51 |
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DF ROBOT SENSOR SET FOR ARDUINO LIGHT TOUCH TEMP VIB TILT MAG BUTTON $39.95 |
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SUZUKI GSXR750-RY GSXR750 RY SRAD 2000 FUEL PETROL TILT SENSOR $23.51 |
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99 CBR 1100XX Stop Sensor, Tilt Sensor, Tip Sensor $40.00 |
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SAAB 9-3 Alarm Tilt Sensor Anti-Theft TWICE 1998 – 2003 5037767 400110516 $19.60 |
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Suzuki SV650 K7 K8 07 – 08 Tilt Sensor Cut out #22994 $23.51 |
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00 01 02 03 04 05 Cadillac Deville Tilt Wheel Position Sensor $45.00 |
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09 10 11 Kawasaki Ninja ZX6-R ZX6R Tilt Tip Lean Switch Angle Bank Sensor BAS $44.99 |
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Pan and Tilt Kit with Hitec HS-311 Servos Sensor Mount $39.99 |
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SUZUKI SV650 SV650S TILT SENSOR FUEL CUTOFF RELAY $36.99 |
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DEI 507M CAR ALARM DIGITAL MOTION TILT JACKING SENSOR $44.95 |
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Directed 507M-TILT SENSOR – Kit $44.39 |
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NEW DIRECTED 507M DIGITAL TILT SENSOR $44.12 |
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SUZUKI GSX1400-K1 GSX 1400 CRASH CUT OUT TILT SENSOR SWITCH 2001 $20.37 |
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Honda CBR1100XX Blackbird 1999 Onwards Tilt Sensor #22085 $23.51 |
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DIRECTED ELECTRONICS 507M DIGITAL TILT SENSOR $29.05 |
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SUZUKI AN400 BURGMAN FUEL CUT OFF TILT SENSOR AN650 ALSO $34.99 |
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SUZUKI VLR1800 VLR 1800 C109R FUEL CUT OFF SENSOR TILT $34.99 |
