Samurai Swords and Superior Stocks

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 …

Got more movies you'd like to see mined for investing wisdom? Share your favorite titles in the comments box below.

Ford and Nintendo are Motley Fool Stock Advisor picks. Motley Fool Options has recommended a diagonal call recommendation on Microsoft, which is a Motley Fool Inside Value selection. Try any of our Foolish newsletter services free for 30 days.

Fool online editor Nathan Alderman can only dream of being one-tenth as cool as Toshiro Mifune in his prime. He holds no financial position in any company mentioned above. The Fool's disclosure policy ordered two coffins … better make that three.


Read/Post Comments (4) | Recommend This Article (4)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 07, 2010, at 7:10 PM, Varchild2008 wrote:

    Any stock tips for investing in Samuraii Swords?

  • Report this Comment On June 07, 2010, at 11:55 PM, TMFNato wrote:

    I suspect that's one case where the old "never try to catch a falling knife" adage is especially true.

  • Report this Comment On June 08, 2010, at 12:08 AM, goalie37 wrote:

    I'm hoping Japan's new PM takes a samurai sword to the yen. I think that would help their economy and ours.

  • Report this Comment On June 08, 2010, at 11:45 PM, xuincherguixe wrote:

    As their creation is steeped in tradition, buying stocks in Samurai Swordmakers would be difficult.

    The alternative, is that you could buy an actual sword. If it's historically significant it's likely the value will only increase.

    But I'm pretty sure you weren't serious.

    Would it shame my ancestor's to set up a Katana fund, and offer derivatives on it?

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