You can find investing wisdom in the most unexpected places -- including on the silver screen. A two-fisted samurai classic, now streaming online for Netflix subscribers, offers surprising lessons for automakers and oil companies alike.
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In director Akira Kurosawa's 1961 Yojimbo, Toshiro Mifune plays a nameless drifter who wanders into a country village plagued by two feuding gang bosses. Like a sword-slinging Han Solo, Mifune cunningly plays each side against the other, ultimately tricking the criminals into destroying themselves -- and wrecking the town in the process. Big-time Kurosawa fan George Lucas paid homage to Yojimbo with Obi-Wan Kenobi's bar fight in Star Wars, and Sergio Leone stole the whole dang movie for his Western A Fistful of Dollars, the first big-screen star turn for a young punk named Clint Eastwood.
Market forces and the pursuit of money are big themes in Yojimbo. Here are just a few of the film's takeaways for investors.
One man's disaster is another's profit. The local undertaker is the only citizen happy about the ongoing gang war; it ensures steady customers for his coffins. When he hears that a cease-fire has been declared, he's devastated. Nearly every disaster has an upside for someone, and investing in those who profit when others lose can be a smart contrarian play. Toyota's (NYSE: TM ) recent mechanical defects dealt a nasty blow to its brand, but it gave the resurgent Ford (NYSE: F ) a big boost by burnishing its reputation for quality and safety by comparison.
Better technology doesn't guarantee you'll win. Mifune's main antagonist is a sneering gangster with an Elvis-esque pompadour and a foreign-made revolver, which gives him a big advantage over sword-wielding opponents. But in the end, his fancy tech is no match for Mifune's unexpected moves. Sony (NYSE: SNE ) and Microsoft (Nasdaq: MSFT ) thought their latest generation of technically superior video game consoles would wipe the floor with Nintendo's (Nasdaq: NTDOY.PK ) underpowered Wii. But the Wii's low price and innovative control scheme made it a sales juggernaut, at least temporarily, and now Sony and Microsoft are scrambling to duplicate the Wii's success. Judge a prospective investment not only on the quality of its technology, but also on how that tech fits into its overall strategy.
Always prepare for the worst-case scenario. Neither of Yojimbo's dueling crime lords could imagine that a fleabitten bum with a sword would leave both of them dead and their disputed empire in burnt-out ruins. BP (NYSE: BP ) , which reportedly flouted safety regulations at its offshore oil rigs with alarming regularity, probably never thought it'd deal with a calamity on the scale of the Deepwater Horizon. If it had planned for catastrophe, the oil spill now staining the Gulf of Mexico and the company's reputation might have been less of a disaster. Make sure your investments are fully aware of the risks they face, and are taking smart steps to prepare for them -- and apply the same caution to your own buy or sell decisions.
Wickedly funny and hair-raisingly violent, Yojimbo offers an excellent parable about the dangers of greed run rampant. It's all fun and games until somebody loses an arm …
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