Saturday March 24, 2001 – The Rise & Fall of VEGABOne aspect of playing HSX which drives me up the wall is when I try to play intelligently and get burned for doing so.  You would think that by doing careful research, and making your investment decisions based on that data, one would do quite well.  If only this game were that easy.  A case in point is this week’s “wonder stock” Vega Brothers (VEGAB).

Here we have a stock that has quadrupled in price, in less than a week, based on an internet casting rumor.  What drives me crazy, is the fact that there was information available at the beginning of it’s climb, that should have immediately driven the price back down to where it started.  And, to add insult to injury, a column that came right out and said that there were NO plans to develop this anytime soon drove it up another 10 points.  It just makes one want to cast logic to the wind.

The trick though, is knowing when to play like a fool and when to use logic to get ahead of the curve.  Someday I might figure that out.  Let’s look at some of the information that was available to HSX traders this week to why this game is so unpredictable.

(1)  The following was reported on 3/20/01 in  Upcomingmovies.com just after  the casting rumors surfaced and the stock began to take off. Rush and Malloy, columnists for the New York Daily News report (with New York Magazine) that Tarantino’s Glorious Dogs will likely be next (after Kill Bill), followed by The Vega Brothers.  Of course a lot can change in the next few years.

(2)  This following statement comes directly from the Saturday’s (3/24/01) Hollywood Stock Exchange® Market Snapshot column:

Quentin Tarantino is currently focusing on his next project Kill Bill, (KILLB), starring Uma Thurman (UTHUR), and HAS NO PLANS to develop The Vega Brothers anytime soon.

Now let’s take a minute, combine this information, and come up with a logical conclusion. 
   (A)  Kill Bill isn’t due out till sometime during 2002
   (B)  He has at least one other project after KILLB before getting to Vega Brothers
   (C)  He doesn’t have plans to develop Vega anytime soon.
Based on those three points it doesn’t seem likely that Vega Brothers would hit the theaters until 2003 or 2004 . . . if at all.  Since VEGAB is no Matrix 2/3 or STAR2/STAR3 this should make it a perfect candidate to take profits on.  But, did the market act logically? No. . . the sheep were running.

Will sensibility return to the market causing the VEGAB bubble to break.  I’m sure it will, but timing is everything.   When the bubble breaks those with large portfolios won’t get hurt too badly, because they can afford to hold it hoping that it may go up again someday.  Those of you with smaller ports, who were lucky enough to have ridden the wave up to this unrealistic price point, may want to consider taking your profits and running.   Recent U.S. Stock Market activity provides us a good lesson to learn by.  Sooner or later an unrealistic market will correct itself.

I think that Dirty Harry’s famous line seems to apply here, “You’ve got to ask yourself one question, do I feel lucky.  Well, do ya punk?”

                        Aaron

Sunday March 11, 2001 – Enemy at the Box OfficeI just can’t find a reason for Enemy At The Gates having a significant opening weekend. The following is my reasoning.

(1) Star Power: A good way to define “star power” is by the average opening weekend box office of the actor’s movies. Let’s look at the four best known actors in this movie and their track records.
(a) Joseph Fiennes’ average is $1.6 million
(b) Jude Law’s average is $4.7 million
(c) Rachel Weisz’s average is $7.4 million. However, if we remove The Mummy from her list, the average drops down to $1.36 million.
(d) Ed Harris’ average is $13.8 million. However, it is very important to know that this high amount is more likely due to the other stars in these movies that went into this average. The names of those other stars reads like the “A” List’s who’s who (Julia Roberts, Jim Carrey, Tom Cruise, Gene Hackman, Tom Hanks, Sean Connery, Nicholas Cage, and Clint Eastwood). The average of his movies without the “A” List actors is around $4 million. I doubt that ENEMI can open at $14+ million based on star power.

(2) Target Audience: Date Movie? I don’t think so. It’s R rated so that leaves out the teen demographic for the most part. And, even if the rating was different, how many teens are interested in a World War II movie about Russians and Germans. Kids hate history. One reviewer’s comment that stuck in my mind was that this is “a thinking man’s war movie”. In my mind, that makes this an “art house” film. Art house films don’t open in the double digits. What’s left? Males 30 to 90 years old. One thing we know about the mature demographic is that they don’t usually run out to see a movie opening weekend. Consequently, there doesn’t seem to be a large enough target audience for a large opening weekend.

(3) I don’t know about other places around the country, but here in Chicago I can’t recall seeing any TV advertising for ENEMI yet. 15MIN and GTOVR commercials were all over the airwaves for several weeks before this weekend’s opening.

If 15MIN with all the advertising, publicity, and major star power could only open at around $10 million, what are the odds of a movie lacking these things can open for significantly more. If word of mouth turns out to be good, it may have good legs and delist nicely. But, as for opening weekend, I fear it is just to hard a sell for the average American moviegoer who makes up that weekend’s audience.

God knows, over the years, I have been wrong before. Sometimes the public’s tastes and actions defy logic. Will this be the case in this situation?

Aaron (aka Dr. J)