STOCKS& BOND

What’s hot? What’s not? The movies of 2006 ex­em­plify core eco­nomic prin­ci­ples, writes Don­ald Clarke

The Irish Times - Friday - The Ticket - - FILM2006 -

ASA per­son who some­times takes on the per­sona of a fi­nan­cial ad­vi­sor while as­sem­bling a face­tious, po­ten­tially in­se­cure metaphor to flesh out an endof-year movie re­view, I am of­ten asked what genre stocks look like sound in­vest­ments for the up­com­ing 12 months. Af­ter clar­i­fy­ing that the face­tious, al­ready dan­ger­ously un­sound metaphor equates fi­nan­cial value with cin­e­matic qual­ity, rather than box- of­fice tak­ings, I tend to warn my clients away from cer­tain stocks that once seemed cop­per-bot­tomed.

For ex­am­ple, French Film In­dus­tries, for years a cer­ti­fied win­ner with its nou­velle vague line, con­tin­ued its undis­tin­guished run in 2006. Is­sues such as Hid­den and L’En­fant were im­pres­sive, yes, but, on in­spec­tion, proved to de­pend heav­ily on the con­tri­bu­tions of Aus­trian and Bel­gian strate­gists. The slump seems set to con­tinue.

Hor­ror In­cor­po­rated, though favoured by this an­a­lyst, re­mains in a state of flux. A swathe of truly atro­cious prod­ucts aimed at the younger buyer – Stay Alive, The Cove- nant, The Fog – failed to set more ma­ture hearts aflut­ter in 2006. Mean­while, the un­de­ni­able ex­cel­lence of Pan’s Labyrinth and The Host did not do as much to im­press port­fo­lio man­agers as might have been ex­pected. Those prod­ucts re­lied too strongly on the in­volve­ment of Art Film Con­sul­tan­cies and Strange Un­cat­e­goris­able Korean Lu­nacy to re-es­tab­lish Hor­ror as a blue-chip op­tion. Take care, in­vestors.

and were rarely ro­man­tic and al­most never prop­erly comic. The com­pany will have to re­turn to old-fash­ioned stan­dards es­tab­lished by ear­lier crafts­man if it is to re­gain the con­fi­dence of in­vestors.

Such up­turns are pos­si­ble even with more mod­ern tech stocks. Just ask any canny pun­ter­who bought Dig­i­tal An­i­ma­tion Tech­nolo­gies when, re­spond­ing to the rel­a­tive dis­ap­point­ment that was Pixar’s Cars and the more grue­some pha­lanx com­pris­ing Ice Age 2,

More of­ten than not, my imag­i­nary clients want to know what’s to be­come of the once great Ro­man­tic Com­edy PLC. Sad to re­late, 2006 saw this an­cient firm, cre­ator of ex­cel­lent mer­chan­dise through­out the 1940s and 1950s, fol­low a down­ward path par­al­lel to that of spats man­u­fac­tur­ers and snuff im­porters. Trust the Man, The Hol­i­day, The Last Kiss The Break Up Barn­yard, The Ant Bully and Open Sea­son, that firm’s shares slumped to an all time low. The re­lease of Flushed Away and Happy Feet, nei­ther clas­sics but both amus­ing, saw wise in­vestors’ port­fo­lios re­cov­er­ing very nicely in­deed.

The most sin­gu­lar resur­gence of 2006 was, how­ever, that ex­pe­ri­enced by the long dor­man­tGreat West­ern In­cor­po­rated. The com­pany’s prod­ucts have, it is true, been mod­ernised to such an ex­tent they would barely be recog­nised by founders such as Mr John Ford. Broke­back Moun­tain fea­tured less gun­play and more same-sex rumpy-pumpy than you would find in, say, My Dar­ling Clemen­tine. Tommy Lee Jones’s su­perb The Three Buri­als of Melquiades Estrada had more ex­is­ten­tial angst to it than even The Searchers. The Propo­si­tion was, well, Aus­tralian.

Th­ese suc­cesses noted, in­vestors should be aware that Great West­ern has showed signs of re­cov­ery many times since its de­cline in the 1950s. Sadly, the green shoots have never suc­cess­fully swollen into ver­dant crops. The fail­ure of Down in the Val­ley, an­other rein­ven­tion of the cow­boy film, should stand as a som­bre warn­ing.

So, is there any stock op­por­tu­nity that seems im­mune to shifts in the crit­i­cal mar­ket? Not Comic Book Di­ver­si­fied. Su­per­man Re­turns was in­ter­est­ing enough, but the third X-Men was dread­ful. Pun­ters could be for­given for look­ing to­wards 2007, not­ing the im­mi­nence of Ni­co­las Cage in Ghost Rider and a sec­ond Fan­tas­tic Four and plac­ing their money else­where. The promis­ing Spi­der-Man 3 may not do enough to sup­port the firm as a whole.

No. There seems to be only one in­vest­ment prod­uct that main­tains a steady – if only in­ter­mit­tently spec­tac­u­lar – per­for­mance on the cin­e­matic share floor. Now back to its high­est level since its ini­tial flota­tion in the 1960s, this op­tion has oc­ca­sion­ally dis­ap­pointed but never ex­pe­ri­enced a se­ri­ous col­lapse.

Yes in­deed. The care­ful in­vestor should, per­haps, place his sav­ings in the solidly re­li­able Bond bond.

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