POPCORN PREDICTIONS

June 22, 2010

Talk about a horror movie.  This week’s Strategy of the Week comes from the movie business.  Last week regulators in Washington, D.C. approved the establishment of a Hollywood futures exchange.  Now you can buy derivatives for movies.  Like the A-Team?  Bet on it.  Like the new Tom Cruise movie?  Bet on it.  Don’t like the new Toy Story 3?  Bet against it.  The idea is that betting on the movies lowers the risk for the movie studios and  offsets the risk of putting money into big productions.  The Motion Picture Association of America  hates the idea.  Others call it popcorn predictions.  But they lost the battle.  Pretty soon you’ll be able to bet on the box office and make a little money if your horse – I mean movie – comes in.