Could You Be Doing More With Your Hobby?

Written by Karen Bryan

alcoholHobbies are incredibly popular in the UK, with the majority of the population having at least one pastime they turn to as an escape from the pressures of the world. That popularity has made them into a big business: a study in 2013 revealed that Brits collectively spend £18 billion on hobbies every year.

But can your expertise in a particular pastime translate into expertise on the stock markets, and successful investment? There are plenty of hobbies that have a clear impact on the markets, and where major occurrences have led to major stock fluctuations.

Films

Cinephiles have a hard time of it nowadays, as multiplex ticket costs rise alongside extra expenses like 3D and IMAX. There may be good news though, as paying close attention to the film charts and predicting the next big blockbuster (or, indeed flop) can lead to some good investment insight.

This year’s biggest box office so far has come from X-Men: Days of Future Past, the latest in the long running series of comic book movies from 21st Century Fox. Released on May 23, the stock price of Fox rallied as the film dominated the charts, rising 4.4% in the two weeks after the film was released.

Longer term success can be seen as well. A strong first half of the year for Walt Disney – with Captain America: The Winter Soldier and Maleficent currently sitting at 2 and 4 in the charts respectively – has resulted in their share price rising 12%.

Fashion

Another pastime that can often easily translate onto the markets is fashion, where a successful brand will tend to see their stock price rise as more people find out about and buy their clothing. The most notable example of this in recent years is probably Burberry.

Burberry’s rise from a ‘chavvy’ brand to a fashion giant under CEO Angela Ahrendts and Creative Officer Christopher Bailey has been remarkable, leading to Ahrendts being named as the UK’s highest paid CEO in 2012: the first time a woman has held that title.

burberry

Burberry’s rise from 2009 to 2014. data based on IG’s spread betting website index.

And deservedly so – Burberry’s share price at the beginning of 2014 was almost 600% higher than it was five years previously, a stunning achievement from Ahrendts and Bailey as both investors and consumers got behind their vision for the brand.

Always remember that spread bets and CFDs are leveraged products. Spread betting and CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

Gaming

Video games can certainly no longer be called a niche product, as GTA V last year became the fastest selling entertainment product ever – surpassing a billion dollars in sales in just three days. Unsurprisingly, that caused the game’s publisher, Take-Two Interactive, to announce impressive profits for Q4 2013 when the game was released.

Traditionally, traders haven’t paid too much attention to the video game charts, so it was only several months after release – when Take-Two made it clear that their record game had driven revenue – that the impact was played out on its stock price. Gamers who could’ve predicted the repercussions from the spectacular sales of the game and bought shares at the beginning of the year would now be seeing a healthy increase of 30% on their investment.

Drinking

It’s a bad habit, but one that the British as a nation appear to be obsessed with, and one that features heavily on the stock market.

As the World Cup reaches a climax and England’s calamitous exit becomes a painful memory, spare a thought for JD Wetherspoons. Investors expected a bumper period for the chain of pubs as England fans flocked to their local to support the team in Brazil. England’s early departure – playing just two matches where the result mattered – caused a tumble in the company’s share listing.

Plenty of alcohol manufacturers list on the stock market, including brewers like Carlsberg and Heineken, wine makers such as Australian Vintage and even LVMH, makers of Moet & Chandon, Hennessy and Glenmorangie. So whatever your tipple, there’s a good chance you can find a way to invest.