Summer is here! At least in the movies. Blockbuster season is about to start! Get your Summer 2009 Blockbuster Warrants!
But first, the weekend. Let's get the small stuff out of the way first, shall we? An indie animated movie called Battle for Terra (TERRA) is being released, and someone's going to lose money. Probably the people who financed it: "indie" and "animation" is usually not a good combination. It's about cute aliens facing evil humans, who are trying to take over their planet. How low are the expectations? HSX didn't even float options. It reached a high this year of H$8.83, and is down today to H$6.49. Oh that's not good. There are some recognizable names in the voice cast, which is not surprising. This is a no-lose deal for someone like Brian Cox or Amanda Peet. They can do the work in just a couple of days, get paid maybe $100,000, and then walk away. Since you can't see them, no one will associate them with it if it's a flop. Not a bad deal. For whoever is making the movie, you can get a decent number of names for a fraction of what Brad Pitt's agent would make on a live action movie. Critics are actually somewhat favorable, with a 58% rating on rottentomatoes.com. So maybe there's hope. But maybe not. It is coming out on 3-D, but even kids can see through a gimmick.
Stock: Short
Matthew McConaughney in a romantic comedy - sound familiar? Yes, but: toss in the classic Dickens tale about three ghosts haunting someone to get them to change their ways, and you have "Ghosts of Girlfriends Past" (GHOGP), about one of those guys who loves and leaves 'em and his inability to commit. Quite the high concept we have going here. Maybe not. Stock is at H$48.34. about a buck and a half off the high. Movement has been moderately upward. Jennifer Garner brings some adult sensibility and a touch of class. But she is - quite literally - in the "girlfriend" role. Of course, so are several other actresses, all of whom get to wreak some havoc on Mr. McConaughney. For this movie to work, it has to attract a fair share of women. I'm not so sure on that score. The reviews are not bad - they're terrible. 10% on rottentomatoes? Haven't seen that in a while. The strike price is H$15, which it could crack easily if the stock price is accurate. It needs to make about $18 million to hit the stock. Call is H$4.47, but down. Put is around H$1, also down. The options are clearly following the stock. For this movie to work, it has to attract a certain percentage of professional women, who tend to have a certain degree of sophistication. I think this is the moment when Matthew McConaughney becomes a parody of himself. My guess is that he has jumped the shark.
Stock: Short
Call: Short
Put: Long
And then, of course, we have the movie millions have been waiting for, the chance for so many people to have fun with the X-Men movies again, after the disaster that was X-Men 3. Shudder. Wolverine (WOLVE) tells the story of how the guy with the funky fingers got the way he is. Woo hoo! Sign me up! The stock is trading at $H225, mostly up in recent weeks. Strike price is $H80, right about where it should be. Call is actually down today, but that's because it was above H$9. The put, interestingly enough, is not underwater, but is at H$2.52. Someone's taking some risks. The strike price predicts a stock price of $H216, so they're fairly close. The call predicts a price of about $H240. So, let's see, what does this movie have going for it? A huge fan base from the first movie, a wildly popular movie star, and the first big action blockbuster of the summer. Other than that, not much. One of the main villains is Liev Schreiber, who used to be cast as the sensitive Jewish guy. We're a long way from the days of Woody Allen meeting cute with Diane Keaton. Of course, we're also a long way from the days of Moshe Dayan, so maybe the movies are catching up with the reality of the Middle East. As for the details of this movie: it's at 42% on rottentomatoes.com (as if that matters). How wide is it being released? How wide can you get? Try 4,000+ screens.
Stock: Long
Call: Long
Put: Short
Update Sunday night: It was a good weekend for predictions here at TEQP. I just about nailed everything, except the Put on GHOGP. TERRA was, in fact, a bomb, Matthew McConaughey survived, but not by much, and WOLVE did, in fact, bust wide open. WOLVE dropped by about H$8 on Friday morning, which I usually take as a sign that the stock is going to adjust downwards. This time I stuck with it, and boy am I glad I did - it adjusted up by H$17. Feels good.
And for your viewing pleasure, ladies and gentlemen, the mascot of the University of Michigan:
X-MEN ORIGINS: WOLVERINE HD
Thursday, April 30, 2009
Obama's first 100 days
Yesterday was President Obama's 100th day in office. It's a nice milestone, but sort of arbitrary. There were lots of articles about it. DailyKos choose some good pictures.
What's important to note about Obama's first 100 days is that he has put in place lots of pieces of a puzzle. The pieces are changes in policy, laws, new people. The puzzle is the new direction America will be going in, the new foundations of our country. Very few of the pieces are fully formed, and they don't fit together yet. But they will. As we reform health care, our economy will get better, which will increase taxes, which will help us balance the budget. As we reduce pollution, we will reduce health care costs. As the economy gets better, crime goes down, which means health costs, again, go down. Allowing over-the-counter sales of the morning-after pill to girls 17 and up will, hopefully, reduce abortion, which will reduce the intensity of the culture wars. Spending more money on public transportation reduces pollution, reduces our dependency on foreign oil, and gives people much cheaper transportation options. Which saves them money, which they can use for more productive uses.
On the foreign policy front, the issues are even more intertwined, sometimes very delicately. Obama went to Turkey. That has implications for our relations with Europe, Iraq, Iran, Israel, Armenia, and Syria. Turkey wants to be part of the EU, but France and Germany object; Turkey shares a border with Iraq, as well as Iran and Syria; Turkey has served as a broker for the Israeli-Palestinian peace process; Turkey disagrees with Armenia about the Armenian genocide. So improving our relations with Turkey has positive implications for all of those parts of our foreign policy. The same is true of Iran, which borders Iraq, Afghanistan, and Pakistan, and is on the verge of developing nuclear weapons.
What makes Obama's agenda great is that the pieces really do fit together. This is in contrast to Reagan. The pieces of the Gipper's ideology did not fit together. He believed in cutting taxes, reducing the size of government, and increasing defense spending. The key difference between Obama and Reagan is that Obama, ironically, is a better capitalist. Obama believes in making society more efficient; Reagan just believed in making money by giving more of it to rich people. There were a couple of key parts of Reagan's agenda that were actually highly inefficient, notably increasing defense spending and increasing the size of the debt. Spending money on defense is inefficient, because most of the money spent doesn't actually do anything. If you spend money on a hospital or a school, you get a return on your investment. If you spend money on a bomber, you don't get an immediate return on your investment, because the bomber doesn't produce anything. Conservatives will argue that the return on your investment from defense spending is the fact of your freedom. We spent billions in WWII, and we got some amazing dividends. We spent trillions of dollars on the Cold War, and the dividend that we got was that we were not annihilated. That's a pretty good dividend. But that kind of infinite return on investment is also a terrible way to judge said investment, because it's infinitely fungible. Which is why there is a huge amount of waste in the Pentagon. Another highly inefficient part of Reagan's agenda was tolerating deficit spending, because that is an inefficient use of capital.
But the most inefficient part of Reagan's agenda, the part that did the most damage, was his conviction that "government is the problem." Reagan restored some of the American people's faith in themselves, with his notion of the "shining city on a hill." But he did the exact opposite with their faith in their government. So problems that could have been solved weren't, and they linger. Talk about inefficiency.
Obama's belief in the ability of government to actually solve problems stands in start contrast to Reagan's cynicism about government. Reagan, ironically, didn't have to worry about his policies delivering on domestic spending delivering a good return on investment, because he didn't think they were going to. As far as he was concerned, government spending on welfare and health care and education were mostly wasteful, so if they didn't deliver a good return, it proved him right. That's one reason he could get away with a less-than-stellar work ethic - he wasn't working to prove that government could work. It was like he had an ideological justification for being lazy. Reagan of course was not the sharpest tool in the shed, even if he wasn't quite as stupid as liberals thot he was at the time. But he laid the ground for the ultimate in intellectually sloppy governance, otherwise known as the George W. Bush administration. There is nothing as inefficient as inept management. Particularly management that is incapable of acknowledging, let alone solving, its own mistakes.
Obama is ideologically committed to working both hard and smart. He has the great advantage of being president in an era when it is actually possible to make government work. He also has the great advantage of following Bush, because all he has to do to make government work better than it did under Bush is to make it work at all. Which means that it will be more efficient. Which creates a virtual circle - as government works better, as the pieces start to fit together, people's faith in their government improves. Which means they will provide it with the resources to work even better.
Not bad for 100 days.
What's important to note about Obama's first 100 days is that he has put in place lots of pieces of a puzzle. The pieces are changes in policy, laws, new people. The puzzle is the new direction America will be going in, the new foundations of our country. Very few of the pieces are fully formed, and they don't fit together yet. But they will. As we reform health care, our economy will get better, which will increase taxes, which will help us balance the budget. As we reduce pollution, we will reduce health care costs. As the economy gets better, crime goes down, which means health costs, again, go down. Allowing over-the-counter sales of the morning-after pill to girls 17 and up will, hopefully, reduce abortion, which will reduce the intensity of the culture wars. Spending more money on public transportation reduces pollution, reduces our dependency on foreign oil, and gives people much cheaper transportation options. Which saves them money, which they can use for more productive uses.
On the foreign policy front, the issues are even more intertwined, sometimes very delicately. Obama went to Turkey. That has implications for our relations with Europe, Iraq, Iran, Israel, Armenia, and Syria. Turkey wants to be part of the EU, but France and Germany object; Turkey shares a border with Iraq, as well as Iran and Syria; Turkey has served as a broker for the Israeli-Palestinian peace process; Turkey disagrees with Armenia about the Armenian genocide. So improving our relations with Turkey has positive implications for all of those parts of our foreign policy. The same is true of Iran, which borders Iraq, Afghanistan, and Pakistan, and is on the verge of developing nuclear weapons.
What makes Obama's agenda great is that the pieces really do fit together. This is in contrast to Reagan. The pieces of the Gipper's ideology did not fit together. He believed in cutting taxes, reducing the size of government, and increasing defense spending. The key difference between Obama and Reagan is that Obama, ironically, is a better capitalist. Obama believes in making society more efficient; Reagan just believed in making money by giving more of it to rich people. There were a couple of key parts of Reagan's agenda that were actually highly inefficient, notably increasing defense spending and increasing the size of the debt. Spending money on defense is inefficient, because most of the money spent doesn't actually do anything. If you spend money on a hospital or a school, you get a return on your investment. If you spend money on a bomber, you don't get an immediate return on your investment, because the bomber doesn't produce anything. Conservatives will argue that the return on your investment from defense spending is the fact of your freedom. We spent billions in WWII, and we got some amazing dividends. We spent trillions of dollars on the Cold War, and the dividend that we got was that we were not annihilated. That's a pretty good dividend. But that kind of infinite return on investment is also a terrible way to judge said investment, because it's infinitely fungible. Which is why there is a huge amount of waste in the Pentagon. Another highly inefficient part of Reagan's agenda was tolerating deficit spending, because that is an inefficient use of capital.
But the most inefficient part of Reagan's agenda, the part that did the most damage, was his conviction that "government is the problem." Reagan restored some of the American people's faith in themselves, with his notion of the "shining city on a hill." But he did the exact opposite with their faith in their government. So problems that could have been solved weren't, and they linger. Talk about inefficiency.
Obama's belief in the ability of government to actually solve problems stands in start contrast to Reagan's cynicism about government. Reagan, ironically, didn't have to worry about his policies delivering on domestic spending delivering a good return on investment, because he didn't think they were going to. As far as he was concerned, government spending on welfare and health care and education were mostly wasteful, so if they didn't deliver a good return, it proved him right. That's one reason he could get away with a less-than-stellar work ethic - he wasn't working to prove that government could work. It was like he had an ideological justification for being lazy. Reagan of course was not the sharpest tool in the shed, even if he wasn't quite as stupid as liberals thot he was at the time. But he laid the ground for the ultimate in intellectually sloppy governance, otherwise known as the George W. Bush administration. There is nothing as inefficient as inept management. Particularly management that is incapable of acknowledging, let alone solving, its own mistakes.
Obama is ideologically committed to working both hard and smart. He has the great advantage of being president in an era when it is actually possible to make government work. He also has the great advantage of following Bush, because all he has to do to make government work better than it did under Bush is to make it work at all. Which means that it will be more efficient. Which creates a virtual circle - as government works better, as the pieces start to fit together, people's faith in their government improves. Which means they will provide it with the resources to work even better.
Not bad for 100 days.
Wednesday, April 29, 2009
Welcome to the party, Arlen!
So Arlen Specter is now a Democrat. Who woulda thunk it. Well, lots of people, actually. Rumors have been swirling for months about how he was going to handle the 2010 election. He was facing a primary challenge from Stephen Toomey, of the Club for Growth, and there was every indication that Specter was going to lose. Lots and lots and lots of people left the Pennsylvania GOP over the last year or so, about 200,000. That leaves a hard core of seriously right-wing people, most of whom don't like Specter. His other options were to retire, run as an independent, and become a Democrat. Apparently he didn't want to retire, which makes a certain amount of sense, since there are several senators older than him (he's 79). There are a couple of independents in the Senate, Bernie Sanders of Vermont, who calls himself a socialist, and Joe Lieberman of Connecticut, who calls himself an "independent Democrat." Sanders can afford to be independent because he was a Representative from Vermont for years, so he's a known quantity there, and apparently Vermonters don't take offense when someone calls himself a socialist. Joe Lieberman, of course, is a special case even among special cases.
If Specter had run as an independent, that would have freed up the Democrats to run against him, and he may very well have lost. Becoming a Democrat means he just about locks up that primary.
I have known of Arlen Specter for most of his Senate career, since I went to school in Pennsylvania in the 80's. I once invited him and Carl Levin to a debate at Swarthmore. I invited Specter because he's a former prosecutor and the Senator from Pennsylvania, and I invited Levin because he graduated from Swarthmore. They both declined, but that was mostly because my invitation was not that well put together. I basically just called each of their offices and invited them - I had no idea of the protocol involved.
I agree with Specter on some things, and I'm not a huge fan of his; he seems to waffle on some things. But his heart is occasionally in the right place, and he has been known to stand up for principle.
He'll be in good company in the Northeast; most of the states that border Pennsylvania have Democrat Senators, and I'm sure he has many friends among Democrats in the Senate.
Once Al Franken is seated, Democrats will have 60 seats, enough to prevent filibusters. This is somewhat symbolic; I don't think Specter will actually change too many votes. But his allegiance is now with Obama, and that counts for something.
Welcome to the party of the future, Senator Specter!
If Specter had run as an independent, that would have freed up the Democrats to run against him, and he may very well have lost. Becoming a Democrat means he just about locks up that primary.
I have known of Arlen Specter for most of his Senate career, since I went to school in Pennsylvania in the 80's. I once invited him and Carl Levin to a debate at Swarthmore. I invited Specter because he's a former prosecutor and the Senator from Pennsylvania, and I invited Levin because he graduated from Swarthmore. They both declined, but that was mostly because my invitation was not that well put together. I basically just called each of their offices and invited them - I had no idea of the protocol involved.
I agree with Specter on some things, and I'm not a huge fan of his; he seems to waffle on some things. But his heart is occasionally in the right place, and he has been known to stand up for principle.
He'll be in good company in the Northeast; most of the states that border Pennsylvania have Democrat Senators, and I'm sure he has many friends among Democrats in the Senate.
Once Al Franken is seated, Democrats will have 60 seats, enough to prevent filibusters. This is somewhat symbolic; I don't think Specter will actually change too many votes. But his allegiance is now with Obama, and that counts for something.
Welcome to the party of the future, Senator Specter!
Saturday, April 25, 2009
Investment bankers and educational reform
Some good commentary from Megan McArdle on why we shouldn't hate investment bankers. She also throws in some good advice to investment bankers: don't whine. You are not entitled to being paid millions of dollars a year. And it's not just the people on Wall Street who have to come to terms with reality.
I am very familiar with this problem. I graduated from Swarthmore with a degree in philosophy, and was expecting to be able to just get a job. I have a degree in a very intellectually sophisticated and demanding subject from one of the best schools in the country. Shouldn't I just be able to snap my fingers and presto! get a well-paying, intellectually engaging, emotionally satisfying job? Shouldn't I be able to just send my resume out to a bunch of places and then wait for the job offers to roll in?
Uh, no. I grew up spoiled. Not by my parents, who were very fair and moderate, but by my situation. I'm a heterosexual white male in contemporary America. I took for granted that I would have the nice house and great vacations and all the consumer goods I could want and all that, because that's normal.
Uh, no. It's not normal. It's the product of hard work. Part of my mistake was thinking that education is the key to success. Because that's what we're told: work hard in high school so you can go to a good college, and then you're set. That's the most important thing in being successful: going to a good college.
For many people, maybe it is. And it doesn't hurt. But I think we have confused cause and effect. Many successful people have gone to good schools, so that must be the key to being successful, right? Except that those people got into those schools for the same reason that they were successful. They were smart, competent, hard-working and creative in high school, they were smart, competent, hard-working and creative in college, and then they were smart, competent, hard-working and creative in the real world.
But going to a good school does not guarantee that you will be successful. It just makes it a little easier to get started on being successful. That's it. I have known flaky people with degrees from Harvard and Stanford.
This is something that we as a society have not yet come to terms with. For previous generations, higher education was something that was available to very few people. So people with college degrees were a scarce resource. That made them valuable.
That is no longer the case. Higher education is now much more widely available, so the value of a college degree is now less, as a function of greater availability.
I fell into the trap of thinking that my college education made me special, because I was thinking of it in the terms that had been defined by previous generations. This is not surprising, because the people running the college when I was there were the people from those previous generations. For the people on the Board of Managers when I was in college, Swarthmore was a very special place, because it gave them an education like no one else in their generation had.
So I thot the same would be true for me. I was getting an education that made me unique and special. Except that it didn't. Almost everybody in my high school graduating class went to college and got at least a Bachelor's degree. The one who didn't end up with a BA actually has the coolest job of almost anyone I know - he's a brewmaster at a brewpub, and is doing much better professionally than I am. And he has no student loan debt.
Not everyone in my high school class went on to an elite liberal arts college, but even the ones who went to state schools did really well. Three of my friends went to the University of Michigan. All three have Ph.d.'s (one from Harvard), and all three are successfully pursuing careers in academia.
Megan's friends in investment banking are discovering something that many of us in Generation X have discovered: your college education does not guarantee that you will be successful. All it does is guarantee that you will be able to go to reunions every five or ten years.
The real problem with investment bankers goes deeper, and is the problem of the entire upper middle class: we have come to believe that complying with the rules produces excellent results as by some natural law. In school, if you do your work, teacher gives you an A. It comes to seem like a sort of a natural law: if you have a good education and work hard, the universe is supposed to reward you. After school, the upper middle class gravitates towards careers with very well defined advancement hierarchies: medicine, law, finance, consulting, where this subtle belief is constantly reinforced.
I am very familiar with this problem. I graduated from Swarthmore with a degree in philosophy, and was expecting to be able to just get a job. I have a degree in a very intellectually sophisticated and demanding subject from one of the best schools in the country. Shouldn't I just be able to snap my fingers and presto! get a well-paying, intellectually engaging, emotionally satisfying job? Shouldn't I be able to just send my resume out to a bunch of places and then wait for the job offers to roll in?
Uh, no. I grew up spoiled. Not by my parents, who were very fair and moderate, but by my situation. I'm a heterosexual white male in contemporary America. I took for granted that I would have the nice house and great vacations and all the consumer goods I could want and all that, because that's normal.
Uh, no. It's not normal. It's the product of hard work. Part of my mistake was thinking that education is the key to success. Because that's what we're told: work hard in high school so you can go to a good college, and then you're set. That's the most important thing in being successful: going to a good college.
For many people, maybe it is. And it doesn't hurt. But I think we have confused cause and effect. Many successful people have gone to good schools, so that must be the key to being successful, right? Except that those people got into those schools for the same reason that they were successful. They were smart, competent, hard-working and creative in high school, they were smart, competent, hard-working and creative in college, and then they were smart, competent, hard-working and creative in the real world.
But going to a good school does not guarantee that you will be successful. It just makes it a little easier to get started on being successful. That's it. I have known flaky people with degrees from Harvard and Stanford.
This is something that we as a society have not yet come to terms with. For previous generations, higher education was something that was available to very few people. So people with college degrees were a scarce resource. That made them valuable.
That is no longer the case. Higher education is now much more widely available, so the value of a college degree is now less, as a function of greater availability.
I fell into the trap of thinking that my college education made me special, because I was thinking of it in the terms that had been defined by previous generations. This is not surprising, because the people running the college when I was there were the people from those previous generations. For the people on the Board of Managers when I was in college, Swarthmore was a very special place, because it gave them an education like no one else in their generation had.
So I thot the same would be true for me. I was getting an education that made me unique and special. Except that it didn't. Almost everybody in my high school graduating class went to college and got at least a Bachelor's degree. The one who didn't end up with a BA actually has the coolest job of almost anyone I know - he's a brewmaster at a brewpub, and is doing much better professionally than I am. And he has no student loan debt.
Not everyone in my high school class went on to an elite liberal arts college, but even the ones who went to state schools did really well. Three of my friends went to the University of Michigan. All three have Ph.d.'s (one from Harvard), and all three are successfully pursuing careers in academia.
Megan's friends in investment banking are discovering something that many of us in Generation X have discovered: your college education does not guarantee that you will be successful. All it does is guarantee that you will be able to go to reunions every five or ten years.
Quote of the day (from yesterday)
"It's sad what's happened to the Republicans. They used to be the party of the big tent; now they're the party of the sideshow attraction, a socially awkward group of mostly white people who speak a language only they understand. Like Trekkies, but paranoid."Bill Maher, in the LA Times. Maher publishes an Op-Ed piece in the LA Times about every six months. They're always good. Love that guy. It's a very good piece, and I could quote more from it, but I will just post one more:
"The thing that you people out of power have to remember is that the people in power are not secretly plotting against you. They don't need to. They already beat you in public."Except, of course, that Republicans don't think this way because they DID plot in secret, because they knew that what they were doing - warrantless wiretapping, torturing people, abusing the Constitution - were wrong.
Quote of the week
"It is easier to be critical than to be correct."
-From a Chinese fortune cookie I got this week. Love those ancient Chinese sayings!
-From a Chinese fortune cookie I got this week. Love those ancient Chinese sayings!
Obama's First 100 Days coming up!
President Obama will be in office for 100 days very soon. Next Wednesday! Woo hoo! Get ready to party!
Why? Why not? Any excuse for a party is a good excuse in these times. The NY Times outlines the Obama administration's strategy: pretend that it's not a big deal, but feed the press lots of pictures and quotes.
Why? Why not? Any excuse for a party is a good excuse in these times. The NY Times outlines the Obama administration's strategy: pretend that it's not a big deal, but feed the press lots of pictures and quotes.
Thursday, April 23, 2009
HSX: Week of April 24, 2009
We are currently in a lull before summer and its attendant blockbusters arrive. It's not exactly a great time for cinema. This week we have three movies with low to middling expectations.
First up is "Fighting," (FGHTN) Channing Tatum and Terence Howard starring in a movie that violates about the ninth or tenth rule of Fight Club: thou shalt not make a bad imitation of Fight Club. It's trading at H$25, just slightly off its high, and up more than H$4 today. That's an interesting sign. The strike price is H$10, which feels on the low side, although not totally unrealistic. The call is at H$1.61, but up 5/8 today. The put is at H$2.91, but down 5/8 today. So we are definitely seeing movement towards the high side of expectations. Critics, no surprise, are not enthralled; it's at 34% on rottentomatoes.com, not that that matters much in a movie like this. It's opening on 2,310 screens, not a bad launch. Mixed signals all the way around, although trending positive today. My bet is that it will come close to the bullseye of the strike price, right around a $10 million opening. Which means I am shorting both options.
Stock: Long
Call: Short
Put: Short
Note: Stock changed to Short on Friday morning.
Next up is a movie about another kind of fighting, this one between women, over a man. No topless fighting here! Beyonce and some other people star in Obsessed (OBSES). Ms. Knowles is a beautiful woman and a fine singer, and, I guess, a decent actress. Not really sure about that last part, but I'm sure she has great screen presence. This one is in roughly the same position as FGHTN; it's up today, to H$51 and change, just barely off its high. It has a solid upward trend. The strike price is H$20, double that for Terence and Channing, but the price issues are similar: the call is under a buck, but slightly up today, while the put is at almost H$5. So we're not feeling quite the same kind of optimism. There are no reviews posted on rottentomatoes.com, which is NOT A GOOD SIGN, because it means that it was not screened for critics. Which means that the studio does not have a lot of faith in it. This is not all that uncommon with cheesy horror movies, but you would expect the studio to show a little more respect and love to Beyonce. It's opening on 2,500 screens, just a few more than FGHTN. The prediction at boxofficemojo's Derby is that Beyonce and Co. will clear $15 million. Movies with African-American stars are often underestimated, but not always. Let's go with $15 million.
Stock: Short
Call: Short
Put: Long
Last, and also with low expectations, is The Soloist (SOLOS), a serious drama (!) about a true story. I know the story, because I read about it while it was happening. It's based a on series of columns by an LA Times columnist named Steve Lopez. He's not my favorite LA Times columnist - I think he can get a little sentimental - but he's good, and he keeps in touch with the city. He's sort of the local color commentary guy. He met a homeless man named Nathaniel Ayers, who turned out to be a former musician at Julliard, rendered destitute and dysfunctional by schizophrenia. It's a semi-inspiring story (I don't know the ending), all the more so because it's cliches come to life. The stock has been dropping like a rock, from a high of H$41 to its current price of H$27. The strike price is H$15, which it very likely will not make. The call is H$1 and something, not terribly surprising, while the put is, also understandably, around H$4. I am actually somewhat optimistic about this movie, mostly because it has a great cast. I think Robert Downey Jr. is an inspired choice to play Lopez, and I think Jamie Foxx is perfect for Ayers. There has been a lot of talk recently about the sorry state of adult dramas, especially since State of Play - featuring three Oscar winners - was handily beaten by 17 Again last weekend. I think the problem with that and Duplicity and The International before it was that they all sounded terribly cliched - thrillers revolving around corporate malfeasance. Who hasn't heard enough about that recently? This, on the other hand, is a very human story. I don't think it will make its strike price, but I think it will surprise. It's at 54% on rottentomatoes.com, with reviews all over the place - some love it, some hate it. It's opening on just 2,000 screens. I think audiences are starved for something like this. I'm going to aim high, at $13 million.
Stock: Long
Call: Short
Put: Short
Lots of uncertainty tonight, so I am going to be sure and check in tomorrow morning.
Update Friday morning: FGHTN and SOLOS are both fairly stable, FGHTN is unchanged, SOLOS is down a half. OBSES, on the other hand, is down more than H$2. I changed my mind on FGHTN, partially because the prediction on boxofficemojo.com' The Derby is $8.5 million. Also, the score on rottentomatoes.com is down to 27%. I just don't see any hook for the audience. OBSES' downward drift confirms my Short. Any movement beyond about H$1 on Friday morning is an indication one way or the other (less than that is just normal trading).
Update Monday night: Boy, have I got to stop underestimating movies I am not interested in. OBSES blew out all predictions, particularly mine, opening at $28 million. I also have to start doing better research. FGHTN, on the other hand, came in pretty much right on target, opening at $11 million, although my short of the stock was slightly off. I aimed too high for SOLOS; it came on the low end of expectations, at $9 million. I got the stock and the put wrong, but at least I got the call right. Amazingly enough, I actually went up one in the rankings, despite losing H$1 million plus on Beyonce.
First up is "Fighting," (FGHTN) Channing Tatum and Terence Howard starring in a movie that violates about the ninth or tenth rule of Fight Club: thou shalt not make a bad imitation of Fight Club. It's trading at H$25, just slightly off its high, and up more than H$4 today. That's an interesting sign. The strike price is H$10, which feels on the low side, although not totally unrealistic. The call is at H$1.61, but up 5/8 today. The put is at H$2.91, but down 5/8 today. So we are definitely seeing movement towards the high side of expectations. Critics, no surprise, are not enthralled; it's at 34% on rottentomatoes.com, not that that matters much in a movie like this. It's opening on 2,310 screens, not a bad launch. Mixed signals all the way around, although trending positive today. My bet is that it will come close to the bullseye of the strike price, right around a $10 million opening. Which means I am shorting both options.
Stock: Long
Call: Short
Put: Short
Note: Stock changed to Short on Friday morning.
Next up is a movie about another kind of fighting, this one between women, over a man. No topless fighting here! Beyonce and some other people star in Obsessed (OBSES). Ms. Knowles is a beautiful woman and a fine singer, and, I guess, a decent actress. Not really sure about that last part, but I'm sure she has great screen presence. This one is in roughly the same position as FGHTN; it's up today, to H$51 and change, just barely off its high. It has a solid upward trend. The strike price is H$20, double that for Terence and Channing, but the price issues are similar: the call is under a buck, but slightly up today, while the put is at almost H$5. So we're not feeling quite the same kind of optimism. There are no reviews posted on rottentomatoes.com, which is NOT A GOOD SIGN, because it means that it was not screened for critics. Which means that the studio does not have a lot of faith in it. This is not all that uncommon with cheesy horror movies, but you would expect the studio to show a little more respect and love to Beyonce. It's opening on 2,500 screens, just a few more than FGHTN. The prediction at boxofficemojo's Derby is that Beyonce and Co. will clear $15 million. Movies with African-American stars are often underestimated, but not always. Let's go with $15 million.
Stock: Short
Call: Short
Put: Long
Last, and also with low expectations, is The Soloist (SOLOS), a serious drama (!) about a true story. I know the story, because I read about it while it was happening. It's based a on series of columns by an LA Times columnist named Steve Lopez. He's not my favorite LA Times columnist - I think he can get a little sentimental - but he's good, and he keeps in touch with the city. He's sort of the local color commentary guy. He met a homeless man named Nathaniel Ayers, who turned out to be a former musician at Julliard, rendered destitute and dysfunctional by schizophrenia. It's a semi-inspiring story (I don't know the ending), all the more so because it's cliches come to life. The stock has been dropping like a rock, from a high of H$41 to its current price of H$27. The strike price is H$15, which it very likely will not make. The call is H$1 and something, not terribly surprising, while the put is, also understandably, around H$4. I am actually somewhat optimistic about this movie, mostly because it has a great cast. I think Robert Downey Jr. is an inspired choice to play Lopez, and I think Jamie Foxx is perfect for Ayers. There has been a lot of talk recently about the sorry state of adult dramas, especially since State of Play - featuring three Oscar winners - was handily beaten by 17 Again last weekend. I think the problem with that and Duplicity and The International before it was that they all sounded terribly cliched - thrillers revolving around corporate malfeasance. Who hasn't heard enough about that recently? This, on the other hand, is a very human story. I don't think it will make its strike price, but I think it will surprise. It's at 54% on rottentomatoes.com, with reviews all over the place - some love it, some hate it. It's opening on just 2,000 screens. I think audiences are starved for something like this. I'm going to aim high, at $13 million.
Stock: Long
Call: Short
Put: Short
Lots of uncertainty tonight, so I am going to be sure and check in tomorrow morning.
Update Friday morning: FGHTN and SOLOS are both fairly stable, FGHTN is unchanged, SOLOS is down a half. OBSES, on the other hand, is down more than H$2. I changed my mind on FGHTN, partially because the prediction on boxofficemojo.com' The Derby is $8.5 million. Also, the score on rottentomatoes.com is down to 27%. I just don't see any hook for the audience. OBSES' downward drift confirms my Short. Any movement beyond about H$1 on Friday morning is an indication one way or the other (less than that is just normal trading).
Update Monday night: Boy, have I got to stop underestimating movies I am not interested in. OBSES blew out all predictions, particularly mine, opening at $28 million. I also have to start doing better research. FGHTN, on the other hand, came in pretty much right on target, opening at $11 million, although my short of the stock was slightly off. I aimed too high for SOLOS; it came on the low end of expectations, at $9 million. I got the stock and the put wrong, but at least I got the call right. Amazingly enough, I actually went up one in the rankings, despite losing H$1 million plus on Beyonce.
Monday, April 20, 2009
Quote of the day
This is what happens when you cross over to the "dark side." When you embrace the tactics of those you decry. The law exists to curb the worst instincts of men. Why would anyone think that once those boundaries are crossed, newly erected boundaries will be respected? You can't regulate "the dark side." That's why they call it the dark side. (emphasis in original)
Ta-Nehisi Coates, one of Andrew Sullivan's fellow bloggers at The Atlantic.
Let me repeat that:
I remember when conservatives used to claim to be the party of "law and order." You don't hear that much these days. Whatever happened to that?You can't regulate "the dark side." That's why they call it the dark side.
Impeach Bybee
One of the authors of the OLC memos laying down the legal justification for torture was Jay Bybee, who is now on the Ninth Circuit Court of Appeals. He was confirmed by the Senate long before anyone had any idea that he had written these memos.
A movement has been building to impeach him. Jerrold Nadler, a Representative from New York (and my old Congressman), is one of the people leading the charge. Good for him. I strongly support this. Nadler is in a position to do something about this. He is chair of the Judiciary Committee's Constitution, Civil Rights, and Civil Liberties Subcommittee. This is one of those moments that I am supremely thankful that the Democrats control Congress. It is also one of those moments that I am thankful that there are Democrats in Congress who are willing to disagree with the Obama administration on this. Daily Kos has, as usual, an excellent post about this, including what is being done at the grassroots level in California.
I do not know whether or not Jay Bybee should be removed from office, because he is innocent until proven guilty. I am not in a position to pass that judgment. But I believe that Congress has an obligation to investigate this issue to the fullest extent possible. The NY Times agrees with me:
Impeach Bybee. It is the very least we can do.
A movement has been building to impeach him. Jerrold Nadler, a Representative from New York (and my old Congressman), is one of the people leading the charge. Good for him. I strongly support this. Nadler is in a position to do something about this. He is chair of the Judiciary Committee's Constitution, Civil Rights, and Civil Liberties Subcommittee. This is one of those moments that I am supremely thankful that the Democrats control Congress. It is also one of those moments that I am thankful that there are Democrats in Congress who are willing to disagree with the Obama administration on this. Daily Kos has, as usual, an excellent post about this, including what is being done at the grassroots level in California.
I do not know whether or not Jay Bybee should be removed from office, because he is innocent until proven guilty. I am not in a position to pass that judgment. But I believe that Congress has an obligation to investigate this issue to the fullest extent possible. The NY Times agrees with me:
After eight years without transparency or accountability, Mr. Obama promised the American people both. His decision to release these memos was another sign of his commitment to transparency. We are waiting to see an equal commitment to accountability.One of the best things that an impeachment will provide is an opportunity to force legislators to make their positions clear: do you or do you not support the use of torture? I sincerely welcome that debate and that opportunity. There are many good Republicans and conservatives who oppose the use of torture. It needs to be made clear who in the GOP stands where on this issue, so that those who believe in the humane treatment of prisoners can separate themselves from those who believe in vengeance and despicable, unnecessary violence as a legitimate purpose of the government.
Impeach Bybee. It is the very least we can do.
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