Parasite’s Oscar Win Also Good News For Investors

Parasite’s Oscar Win Also Good News For Investors

about 4 years ago2 mins

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A Korean fund backing Oscar-winning movie Parasite hit the jackpot this week – illustrating investors' increasing invention in the hunt for market-beating returns 🔍

What does this mean?

The private hedge fund, run by Seoul’s Ryukyung PSG, contributed $500,000 towards the $11 million cost of making and distributing the surprise Best Picture winner. And with Parasite’s box office take $165 million and counting, Ryukyung's fund stands to improve further on the 72% profit it’s made since launching in mid-2018.

Shares of Parasite production company Barunson Entertainment & Arts***,* meanwhile, rose 90% this week, and noodle maker Nongshim** – whose products feature prominently in the movie – saw its stock slurp up 11%. Film investment is nothing new, but investor betting on even tangentially related companies demonstrates just how desperate some are for returns in a world of falling interest rates 😅

It’s not just films: profit-hunting investment managers are increasingly turning to big data and machine learning in a bid to hang on to backers attracted by simple passive investment. According to Standard & Poor’s, however, just 12% of US stock funds have beaten their benchmark over the past decade.

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Why should I care?

The chief investment officer at investment bank Morgan Stanley this week said stock market rises remained dependent on low interest rates, rather than increasing earnings – and that investors’ preference for big “defensive” companies over smaller “cyclical” stocks exposed to economic growth was unlikely to change anytime soon.

A survey of big investment managers from Boston Consulting Group on Wednesday, meanwhile, showed ongoing concern that companies’ “price-to-earnings” ratios remain high – and that US stocks’ longest run without a “bear market” could soon change 🐻

But despite investors' expectations for stock market returns this year hitting a record low of 5.6%, maintaining a balanced, market-tracking portfolio remains probably the best approach for the average investor. Movie investment, after all, is risky business – and, as this year’s Oscars showed, picking the next big thing is no mean feat.

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