(originally
published in The Outreach Connection
in April 1997)
(A crummy early article featuring a wildly
overextended metaphor and an absurd dismissal of Lost Highway, but presented here for posterity)
A riddle: when is
the stock market like the movies? Well, pretty much all the time actually…
Things will probably
have moved on by the time this article appears in print, but as I type these
words on March 28, 1997, it appears that Bre-X Minerals – the company that had
perhaps created more fast millionaires than any other in history – was far less
special than it appeared to be. Due to astonishing and widespread error, fraud
or a combination of both, the results of the company’s exploratory drilling
seem to have been wildly misrepresented; when it all blew up, the stock price
fell from around $15 (which was already way below it all-time high, and that’s
taking into account a 10-for-1 stock split) to $2.50 or so. Those who took the
money at those higher price may feel a sympathetic flutter of anxiety but
otherwise will remain unscathed. Those who still own the stock may – if they’re
lucky – have the resources to shake their heads and move on to the next thing;
others who’d loaned money against it may have been ruined.
Bre-X was worthless
when it started out in the not so distant past, and may end its life worthless
again, in the not so distant future, which would make it a grimly interesting
microcosm of the market: a case where, in the absence of any new wealth being
created, the profits made by some people must be more or less exactly matched
by the losses incurred by others (after taking into account the commission
skimmed off at every stage). We might hope that the redistribution of wealth
will have had some beneficial aspects to it, but more likely the map of winners
and losers will be utterly chaotic – which was really inherent in the situation
from the start.
There are many
things that might earn you rewards of various magnitudes: working an honest
day’s work, using a unique talent, contributing something wonderful to the
world – but the really big rewards are nearly always a payoff for having been
prepared to take a risk. And although everyone claims to understand that, it
always seems to create shock waves when fate provides a handy reminder of how
the principle works.
You recall that when
the Lloyds insurance market collapsed, investors who’d been raking in lucrative
returns for years got all uppity, and in some cases had the audacity to demand
that the government (i.e. the normal people) bail them out. Where did they
think those cheques had been coming from, given that they hadn’t been doing
anything tangible to earn them? More generally, the economy only grows at 2 or
3% a year, if that, so for how long can
you expect your mutual funds to grow at 12 or 15% a year (better understanding
of which, in the foreseeable future, might be forced upon our own crazed mutual
fund environment).
You could likely
find a metaphor there for the success or failures of emotional relationships,
for job satisfaction and for much more besides, but I’m not that ambitious. So,
to the movies. Pictures that try to innovate, which take big risks, lose big as
often as they win big, but when they pay off, you can live off them – spiritual
sustenance-wise - for a year. The safest, most calculated pictures provide a
sliver of entertainment but seldom pay huge dividends. As always, a sample of
films presently on release provides a comprehensive overview of the principle
in action. There’s not a current example of a film that reaps big rewards from
taking big risks, but then you’d expect that to be the rarest combination. The
other permutations are well covered though.
In Lost Highway, David Lynch certainly
takes a chance by creating a narrative that is deliberately and inherently
incoherent. Given that even the most fervent of movie buffs still find the
cinematic pill easier to swallow if it’s got a rattling good yarn wrapped
around it, this is quite brave in its own way.
Result? Well, let’s
say the return underperforms the market. Lynch’s wacky sleaziness keeps things
rolling along, but the fact that it all makes no sense turns out to be a
constant annoyance that sabotages the movie’s minor virtues, and a sign that
Lynch is in a real creative crisis.
Donnie Brasco, to my mind, takes no real chances. Some
critics have praised it for giving a daringly downbeat view of the mob, but
this is basically just a modest spin on familiar movie territory. Casting Al
Pacino as a gangster isn’t exactly going out on a limb, either. But then,
Pacino is the greatest actor of his age, and the movie is made by real
professionals, so the result is like buying blue chip stocks – you don’t expect
to hit the jackpot, but you know you won’t lose your shirt either. A highly
satisfactory addition to your viewing portfolio (someone stop me before I
overload this metaphor).
Finally, I don’t
know what the book was like, but Billie August’s Smilla’s Sense of Snow looks to me like a movie that tries to hedge
all its bets by throwing in something for everyone. The early scenes have a
moderately idiosyncratic frostiness about them, but the movie soon starts
devoting itself to the kind of action set-pieces we’ve seen a thousand times
before. It’s true that such movies still succeed, but nowadays usually only
when they’re really expensive (which is taking a risk of another kind). I don’t
know about Billie August’s sense of snow, but if he thinks he can strike gold
with this kind of stuff…well, there’s a little site in Indonesia he might want
to buy into.