Playing & Trading Strategy

Before I start, big props to hyperzeitgeist, who's tearing it up as the Fund Manager for the Fox Studio Fund.  UNIVX is currently trading at $13.20, which is pretty damn good for a week and a half after launch, but as I write this, FOXX is at $16.76.  For a little comparison, last year UNIVX hit close to $200 before it cashed out, but it didn't cross the $13 range (where we are now) until October 17th, and it didn't pass $16.50 (where FOXX is) untll November 10th.  Hyperzeitgeist did a great job not sitting on a stagnant MAZE2 during the week, and then made the wise choice to short it as the weekend hit.  And hyperzeitgeist, if you're reading this, I know a previous FOXX portfolio manager told you he'd gotten the fund up around $150 before cashout several years ago, and you said that wasn't a bad initial target.  But I think your target should be at least $250, and based on how you're already doing, probably much higher than even that.  I'll just try to keep up with you, and not let you get so far ahead of me that you disappear out of my sights.

As for UNIVX, while we didn't have any mainstream releases this week, and our next big 3 mainstream releases; Everest, Crimson Peak, and Steve Jobs; were all sitting dormant and even bleeding out a little bit.  The reason I opened with the bit about hyperzeitgeist is that watching him making large gains off of news items made me realize that I can do better with the fund than to just sit there and hold things long.  I do want to ultimately be in long on those three, I think (more on that in a little bit), but once we get on the other side of them, there won't be as much to hold long in terms of near wide releases.  I don't have much faith in the long-term potential of either By the Sea or Sisters (anyone remember Baby Mama?), and will probably short them if and when I hold them, and will need other things besides Krampus to be trading in November and December.

That's led to me shuffling around various properties this past week, holding things like Mr. Right, Equals, and Ouija 2 for a day or two as news items have hit, and making more in the process than I would have off Everest or Crimson Peak just sitting on a plateau.  I also saw a screening of Everest this weekend in 3D, and I'm not sure how it will play to American audiences, so I'll be carefully monitoring it as it goes wide.  If you've read John Krakauer's Into Thin Air, you know the basic story... but it's not presented as a "Hollywood movie."  The story builds slowly, and fans of disaster movies may get bored with it.  It's not a Spielberg fantasy, and there are no moments of levity and humor that let the air out; Tom Cruise never runs up the mountain to save everyone at the last minute; and there's certainly no Michael Bay level of Armageddon-outrageousness.  At times it can be brutal in its depiction of the events, in a very non-movie way, which some may find unsatisfying.  It's still a very well-told tale with some great cinematography-- I just don't know how all of this will affect box office numbers, if at all.  The hype and the early limited release may very well continue to sell the film, at least through opening weekend.  But I could see it finishing post-release around where it currently sits, whereas with Steve Jobs I fully expect that to come in over $100.  So there may more trading off of news items early this week, but by the weekend we should be fully vested in both Everest and The Green Inferno, though which way, short or long, will depend on analysts' predictions and tracking.

And now let's look at a few more of the upcoming Universal releases.

Legend

I'm hitting these mostly in release order, but I mention Legend first because it was originally slated to come out on October 2nd.  It's now been pushed to November 6th, and I'm not aware of the reasoning.  The price has actually bumped up about a buck since, but limited releases, in general, aren't always the best places to make money.  And I know people seem to like Tom Hardy a lot, but his presence alone won't sell a film, as was the case with Child 44.  This story has been told on film before in Peter Medak's 1990 The Krays, but that version didn't really stick in the public consciousness, either.  Reviews seem to be lukewarm, with Hardy's performance singled out as a bit of a misfire.  I don't know if the release date was pushed to try to get a little distance from some of those early reviews, and it certainly doesn't seem to be the case of the opposite, where they're considering platforming it into an eventual wide release, although one never knows until it hits.  I don't anticipate this stock will move too much in either direction, but I'll keep staying aware of it.

Trash

Another limited release and likely a non-entity.  It's directed by Stephen Daldry (Billy Elliot, The Hours, The Reader, Extremely Loud and Incredibly Close), who's a pretty great director has never done a bad film, with a script from Richard Curtis (Four Weddings and a Funeral, Notting Hill, Bridget Jones, Love Actually, About Time), but this one doesn't have Tom Hanks in it.  Hell, it doesn't even have Kate Winslet.  Martin Sheen, Rooney Mara, and Wagner Moura are just not going to sell this thing on a large scale, and I feel like the international setting and intimate story won't really hit with American audiences.  I do not see this turning into the next Slumdog Millionaire, and I doubt it will surpass $5.

Steve Jobs

So I think The Martian will probably be the big runaway blockbuster of the fall season, and may even be at the top of the Oscar list, but I think Steve Jobs will be close behind.  Analysts are predicting this to do The Social Network numbers (another Sorkin script), and it should likely double its current trading price by the end of opening weekend.  I don't want to miss too much of that uptick, which I think will happen slowly and steadily over the next month, so I'll be looking to hold this one as much as possible around trading on news items.  Not much more to say about this one at this time, but I don't think more needs to be said.  I expect this to be the big Universal player for the remainder of 2015, and I'll make as much money as I can off of it while trading around it, and hopefully it will have a solid, outperforming opening weekend for us.