Sep

15

The contagious and pervasive influence of video on our popular culture and markets is highlighted each year by the Video Music Awards held for the 31st consecutive time on Sunday, August 24.

The influence runs the gamut from the extensive time our kids spend with video compared to other pursuits to the spate of billion dollar deals and hundred million user apps that are reported daily these days.

Considering that the demographics and spread of video are ripe for epidemic growth, it seems like an appropriate time to consider how our market activities can be influenced by video.

A good place to start might be the following 10 interactions with markets that the recent awards ceremony elicits.

1. The VMA video of the year was won by Miley Cyrus and accepted by a homeless man who is wanted by the police.

The investment implications are that we should buy the grains to feed the homeless, buy the brics that are in troubles, buy fixed income of Spain and Italy and Greece and Portugal, and other weak EC countries.

Redistribution is the meme for the next year.

2. A cursory look at the video game and video music industry shows that the customers are young and growing and diffusing to all countries. All the major internet platforms are seeing more traffic to these applications. The customers are young and have a life expectancy of say 40 years more than the average customer for a product. This means that repeat business which is always more profitable should be feasible. The spate of acquistions in this space, the latest being Amazon's buying of Twitch and the emphasis that all the device makers and search engines are placing on making their equipment compatible for videos shows that the most knowledgeable and most successful companies in the world see this trend continuing.

The obvious implication from the VMA's is to buy the video stocks. Regrettably they're all up a google this year, but the growth rate trumps value any time. The top video stocks are Electronic Arts, Activision Blizzard, Take Two Interactive, Vevo, and Game Stop. The weather gauge is so good that I believe I'll buy them myself.

3. The most useful words… are small. All the big stars of the Video world and other world have one word names. There's Bey, Iggy, Sia, Miley, Eminem, Lorde, Avicil, Ariana, Kesha, Usher. Does the same dynamic hold for companies? Are the best companies, the ones that are most exciting, most useful, perhaps most profitable, one word companies.

I found 124 companies on the S&P 500 with one word names. Corp, LLC, and Inc were not considered as words. The average performance of the 124 companies was 9.1% in the first 8 months of the year, a hair above the average of 8.0%. For the rest of the 176 companies with two word and more names. A suggestive difference but not a significant one as the average deviation is 5 percentage points. Hats off to the best one word S&P 500 performers: Alco, up 60%, Nabors, up 60%, Mallinckrodty, up 59%, Micron up 56%, Allegran, up 52%, Delta, up 51%, and Harmn, up 44%. 

4. There is a stampede of interest in video music. Vevo, a joint venture of Sony and Viacom, for example, has 6 billion downloads a month, up 50% from last year. Interest in video is spreading like wildfire. Who will profit from this? Most of the videos are being watched on Mobile. Who will profit from it? During the gold rush, the popular wisdom with some truth in it is that the suppliers of materials and apparel like Levi Strauss were the ones that profited, not the gold miners themselves. Who are the platforms, the suppliers, that will profit here. Perhaps Facebook, and Google, and the distributors of the music will be the best buys. 

5. The more one learns about the video music field, the more respect one has for the movers and shakers at MTV. They are not only at the hub of all that 's going on in the field, but they make the trends. Each year, they have another innovation, some of them quite revolutionary. The latest was that they had multiple screens, and multiple feeds going for the VMA. Now, everyone will have to have two or more mobiles and TVs going at all times including the shower. Their latest trick was to have a team of translators on hand to make all the messages about the VMAs fit for mobile.

One looks back on previous VMAs and notes the prescient way that they showed same sex kissing, nudity, and many other aspects that became the be all and end all of popular culture. Their latest VMA's spread the meme of the importance of family with Bey holding the child and kissing the husband, and of course the idea that has the world in its grip that the purpose of life is to take care of those who have less, and to redistribute the wealth and trophies to the homeless, and to make policing less violent and more in tune with the neighborhoods they cover.vIt's no accident that Angelina and Brad announced their marriage right after the VMA. As always the trends were set and popular culture follows.

Okay, we know that popular culture is set here. How does it affect our market activities. Let us buy family friendly stocks, like Bed Bath and Beyond and Disney for starters.

6. Why is it that video of all kinds is up 50% year to year with a typical statistic being that interactive streaming logs 35.5 billion streams in a current quarter versus 25 billion last year, or Vevo being up 50% to 40 billion downloads a quarter versus 25 billion? The ease of communication from mobile as opposed to a fixed location in a home or a car is the difference. Also, the ability to download contributions from everyone in the world versus a few producers who are responsible for the fixed communiques. We're living in a mobile world, with the know hows and ideas of each individual available for the masses. It's a communications revolution in the new millennium comparable to the industrial revolution in the 19th century.

7. If you can't beat them, join them. The populace demands video. The DailySpec is a meal for a life time that is not with it. We need video here. We are looking for a attractive video personality that knows enough about markets to encap one of the daily spec contributions or Brett's each day in a 2 minute focused and interesting fashion. We'll pay a reasonable amount, and the personality and we will become relevant and modern and diffuse through the masses. Note: One would like to thank a Director of Marketing at MTV, Ms. Joyce Kwon, for alerting me to the importance of video, and the excitement and influence generated by the VMAs.

8. We only respond to video these days. Until the tape of Rice beating the wife surfaced, or the beheading of the reporters was aired, there was no outrage. We're wired to respond to images of things. With all the video apps, the only way to spread a meme these days is through clicks and forwards. All bid individual moves in companies can be accelerated by videos as in the recent Apple announcements of the new Ipods and countless others. 


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2 Comments so far

  1. Richard Barsom on September 5, 2014 2:23 pm

    HIMAX Tech HIMX it’s a stock I like here. $9

  2. chair on September 16, 2014 7:27 pm

    9. I made a study in the 1990’s of the profits from buying NYSE or 9Nasdaq companies with the name GENE in it.It was a goood indicator of sentiment and had some good years. With the 40$ a year growth in games and video, one should do the same thing with companies that have games or video in it. regrettably I was only able to find 3 companies with such names now. shanda games ( games), Gamestop corp ( gme) and Video Displalay oorp ( vide ). {Perhaps along with Electronic Arts, Activision Blizard, and Take Two Interactive, and Himax Tech, ( Himx) , one could create an index and predict it will do better in the coming year than the market. what other companies should be added

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