Press On — Is it investing or gambling?
When I sat down at the computer to write this I noticed that the stock market updater on my home page was reminding me that the Dow was down 122 points. Overall it has actually climbed quite a bit lately, for some reason. With what is going on around the country I have to wonder how the market could be moving upward at all. There are days when I see the stock market as kind of a Wizard of Oz-like creation. There must be someone behind a curtain somewhere pulling the strings, at his or her whimsy, to make it climb or fall.
I have to chuckle about how, through the last 100 years or so, until quite recently mainstream America has been anti-gambling, yet it has always been a badge of prestige if a citizen had money invested in the stock market. Personally, I just view the stock market as a form of legalized gambling. I have certainly won and lost on my choices of companies to invest in over the years.
Recently, I read with much interest that we may soon have the opportunity to invest in something that has always been near and dear to me; movies. Why not, it can”t be any worse than putting my money into mutual funds that lost about half of their value when this economic recession hit. At least if the movie I put my money on bombs, I would understand why it went down the drain.
This month the U.S. Commodity Futures Trading Commission is supposed to decide whether or not to allow “movie fans, industry executives and speculators to bet on expected box office receipts.” I hope they say yes, because I think I can pick movies that are going to do well, a lot better than I can pick stocks or race horses, for that matter.
If the commissioners do grant approval, then online trading forums would be created that will be similar to the commodities markets that have been in existence for many years. People have long been able to plunk their money down on the futures of hog bellies, corn, beef, natural gas and numerous other products. Why should entertainment commodities be left out? If the movie market gets approval, then down the line I can envision investment markets for goods such as Broadway plays, music albums (in whatever format they are distributed), video games and books.
The way it is planned by Cantor Fitzgerald, the company making the proposal to the trading commission, is to create movie futures contracts, which will be called Domestic Box Office Receipts (DBORs), and they will be offered to the general public about six months before a project is scheduled to be released. Four weeks after the movie opens settlements will be made based upon box office results. Trading accounts are to be “automatically cash-settled in the contract holder”s account.” Since trading will all occur online, the market will be open 24/7. Account holders will be charged a $2 monthly maintenance fee and 25 cents per contract commission fee.
At the moment, the big Hollywood studio moguls and the Motion Picture Association of America are actually fighting the proposal. Their argument is that the action will blemish the industry by allowing “legalized gambling on movie receipts.”
I read that in 1983 when the New York Mercantile Exchange began to trade crude oil futures, the big oil companies wanted no part of that either. But, as time passed, they became “major participants.”
I”ve spent a fortune on movie tickets in my life. I”m looking forward to the opportunity to get some of that money back by picking some winners.
Gary Dickson is the editor and publisher of the Record-Bee. Call him at 263-5636, ext. 24. E-mail him at gdickson@record-bee.com.
