Economic Rigor

Always tough to predict a box office before the opening weekend. However, given the hype, I think it will be in the same range as Jurassic World. Probably around $200 million. Based on my formula that incorporates box office, IMDB review score (currently at 9.2...I would expect that to go down) and whether it is part of a franchise, I predict the movie will earn around $1.7 billion or so at the box office.  Not bad for a 200 million budget movie.

Going to be a disappointing result for Warner Brothers. Based on my formula (which incorporates the opening weekend and IMDB rating) I predict that this movie will only make $111 million. Based on the budget of 100 million, which you usually double to include marketing costs, it looks like the movie will end up as a loss of $88 million. Not great.

Been having a look over Atlassian and whether it is worth investing in. Not a big fan to be honest. The Return on Equity is not great, at a very lowly 3%. Yet, if it has a Beta of say 1.3 (like ServiceNow, a competitor), that would imply a cost of capital of 7.5%. I just don't see the company being able to increase the ROE to that level (especially as they lost money last year and were saved by a tax credit) On the plus side, Leadership looks ok...fairly diverse board with plenty of IT experience. Going deeper into the fundamentals; based on the FCFF formula, I calculate the price being around $9.61 a share, which is way lower than the $26.26 on offer at the moment, especially when it is a fairly competitive area. I don't see the growth potential. And for those who think I am unpatriotic, well, the company is domiciled in the UK!  Note: Not a recommendation to invest or not invest in Atlassian. If pain persists, see your financial advisor.

Weakness in the housing prices are starting to feed into auctions....finally. Stats below House Type Sample Average Min Max Change Average 2 Bedroom House 811      1,143,728.32           1,114,930.06    1,172,526.58 -0.28% 3 Bedroom House 3100      1,248,805.42           1,231,280.90    1,266,329.95 -0.27% 4 Bedroom House 2501      1,468,177.91           1,442,052.19    1,494,303.63 0.00% Unit Type Average Min Max 2 Bedroom Unit 2083          835,199.10              822,039.09 ...

Been looking at one of my favourite sites, www.boxofficemojo.com . Gives a bit of a snapshot into the world of movie revenues and the like. As a big fan of movies and data, I was wondering if there was any way to predict how much a movie would make using regression techniques. My theory is that the final world wide box office is dependent on two main criteria; firstly, the weekend opening (if it opens huge, it is more likely to have a big run) and also, how good the movie is (if it is well accepted, it is more likely to have a good run) So I have taken the top 60 movies on boxofficemojo, based on domestic US revenue(as a sample), and ran a regression with the dependent variable being World Wide Gross, and two independent variables; the opening weekend box office, the second being the movies IMDB rating, less the average IMDB rating (which is around 6.6) Performing the regression gives the following formula World Wide Box office = 8.3*(Op...

Bit of weakness now starting to flow through house prices...finally House Type Sample Average Min Max Change Average 2 Bedroom House 785      1,146,920.15           1,117,604.53    1,176,235.77 -0.20% 3 Bedroom House 3013      1,252,154.77           1,234,310.28    1,269,999.25 -0.02% 4 Bedroom House 2441      1,468,148.69           1,441,927.85    1,494,369.53 -0.17% Unit Type Average Min Max 2 Bedroom Unit 2044          835,989.84              822,630.96     ...

Based on my weighted index (more weight put on the quantity of houses and apartments sold), my Sydney based index is up 0.53% in November, which is an annual price rise of 6%. So Sydney House and Apartment prices are still going up at a pretty healthy clip.

Nothing doing on the House Prices. Pretty flat. Stats as per usual. Will do a new post with the monthly total House Type Sample Average Min Max Change Average 2 Bedroom House 769      1,149,235.65           1,119,712.73    1,178,758.56 0.14% 3 Bedroom House 2924      1,252,414.78           1,234,276.16    1,270,553.39 0.01% 4 Bedroom House 2358      1,470,701.42           1,443,949.97    1,497,452.87 0.01% Unit Type Average Min Max 2 Bedroom Unit 1988          834,547.93              8...

Stats as per usual House Type Sample Average Min Max Change Average 2 Bedroom House 738      1,147,608.03           1,117,262.34    1,177,953.73 0.19% 3 Bedroom House 2840      1,252,280.39           1,233,962.27    1,270,598.51 -0.11% 4 Bedroom House 2262      1,470,608.29           1,443,060.39    1,498,156.19 -0.01% Unit Type Average Min Max 2 Bedroom Unit 1930          835,186.42              821,323.99        849,048.84 0.17% 3 Bedroom ...

Did my weighted Average growth of House Prices from 1st of August to 31st October Stats are House Prices are up by 1.2%, a healthy 4.8% annually. So there has been a slow down in growth from the crazy ranges, but still growing.

Increases across the board. Still no sign of a lull in the market House Type Sample Average Min Max Change Average 2 Bedroom House 711      1,145,465.35           1,115,015.47    1,175,915.22 0.29% 3 Bedroom House 2758      1,253,721.83           1,235,058.45    1,272,385.21 0.15% 4 Bedroom House 2194      1,470,803.99           1,442,810.38    1,498,797.60 0.05% Unit Type Average Min Max 2 Bedroom Unit 1873          833,747.19              819,607.98      ...

Saw "Spectre" last night. Great Movie! Real throwback to the early bonds. Love a good backstory and a villain from Bond's past. I was wondering how it would rank amongst the rest of the bonds, according to IMDB. Well so far, it's at No 6. Movie                                              IMDB Casino Royale 8 Goldfinger 7.8 Skyfall 7.8 From Russia with love 7.5 DrNo 7.3 Spectre 7.3 GoldenEye 7.2 The Spy Who Loved Me   7.1 Thunderball 7 You Only live twice 6.9 On Her Majesty's Secret Service   6.8 Live and Let Die   6.8 The Man with the Golden Gun 6.8 For Your Eyes Only 6.8 Diamonds Are Forever ...

House Prices keep roaring up. Clearance rates are down, but I think that might just mean people Passing In rather than dropping prices. Stats as per usual. House Type Sample Average Min Max Change Average 2 Bedroom House 681      1,142,097.88           1,111,558.23    1,172,637.53 0.29% 3 Bedroom House 2669      1,251,833.76           1,232,969.75    1,270,697.77 0.14% 4 Bedroom House 2109      1,470,002.35           1,441,375.32    1,498,629.37 0.35% Unit Type Average Min Max 2 Bedroom Unit 1801          831,640.97     ...

 Back on the rise with the house prices. Stats as per usual. House Type Sample Average Min Max Change Average 2 Bedroom House 647      1,138,851.12           1,107,371.35    1,170,330.89 -0.24% 3 Bedroom House 2567      1,250,094.39           1,230,752.26    1,269,436.53 0.27% 4 Bedroom House 1999      1,464,907.63           1,435,600.58    1,494,214.68 0.11% Unit Type Average Min Max 2 Bedroom Unit 1737          829,459.92              814,814.71      ...

Apple watch sales have increased, according to my estimated formula (see previous post) On the 3 year trend, Apple "Other Products" should have earned $1,289 billion in Q4 2015. However, according to the financial report, the earnings of this division was in fact $3,048 billion. Doing the basic math, Apple Watch sales have increased in Q4 from the $1.32 billion to $1.75 billion (an increase of 32.5%)

Starting to see a little bit of weakness in the house market. Will see whether it flows through. House Type Sample Average Min Max Change Confidence Change Average 2 Bedroom House 619      1,141,635.51           1,109,262.64    1,174,008.38 -0.29% 32372.87181 -0.29% 3 Bedroom House 2434      1,246,776.63           1,226,980.79    1,266,572.47 -0.13% 19795.84104 -0.13% 4 Bedroom House 1903      1,463,343.59           1,433,152.30    1,493,534.88 0.21% 30191.29122 0.21% Unit Type Average Min Max Confidence 2 Bedroom Unit 1660    ...