Star bonds are the best way to make money on HSX. They are predictable because they adjust after a film’s run is over and its box office is known. A Trailing Average Gross (TAG) is calculated for each starbond by dividing the total of their last five film’s box office (in millions $) by 5. For example, if a starbond’s last five films had the box office $100m, $50m, $30m, $250m and $2m their TAG would be $86.4 (100+50+30+250+2)/5. A starbond TAG is only made up of 5 movies so when a new movie is added an old one drops off. This is done in date order of the films adjust (i.e. 4 weeks after release date for wide release movies, and 12 weeks after release date for limited release movies). Basically when a new movie is added to a TAG the oldest movie drops off. So, continuing with our hypothetical example, if the star had a $250m movie about to adjust, they would drop the $2m movie from their TAG and add the new one. Their new TAG would be $136 (250+100+50+30+250)/5. So the difference before and after adjust is 136-86.4 = 49.6. You can make $H49.6 on every share! You can buy 20,000 shares in starbonds, so assuming you bought the max of this bond at the right time you’d be making $992,000 profit!
The quickest and easiest way I’ve found to quickly calculate whether a starbond is worth buying without having to look up the gross of each film is to simply multiply the TAG by 5, minus the box office of the film it’s dropping and add the box office of the film it’s adding, then divide by 5. Again, using the above example, the TAG is $86.4, multiply it by 5 which gives $432, minus the movie being dropped ($2) = $430. Add $250 for the movie being added ($430+$250 = $680) and divide by 5 for the TAG after adjust ($680/5 = $136).
There are normally quite a lot of stabonds attached to adjusting films so it’s useful to get into the habit of doing these calculations roughly in your head.
It is also important to remember that a starbond’s TAG is calculated using the movie’s gross takings, not the delist price on HSX. There can often be a significant difference because wide release movies delist on HSX after 4 weeks from release date. For example if a film made an extra $20m in its 5th week of release, the HSX delist price does not reflect this and so your calculations will be off. Make sure you use the gross takings figure.
Starbonds of course, like all stocks, are subject to market forces. If someone ‘buys max’ of a starbond, it’s current price will adjust accordingly. So for the big movers you need to get in as early as you can to take full advantage. Keep an eye out for RazorHawk’s Post Adjust Bond Show which is normally posted on the Starbonds forum on the evening of an adjust (nearly always Tuesday evenings).
I generally buy starbonds the weekend their movie is released. From the opening weekend figures you can quickly calculate the likely total box office of a movie and therefore work out whether the attached starbonds are decent investments. Any further into the future than that and you can’t be certain your calculations will be based on anything concrete.
The exception to that of course are the blockbuster movies, particularly around summer and Christmas. A H$250m cap is put onto any movie involved in a starbonds TAG. Even if the movie makes $500m at the US box office, for the purposes of calculating a TAG, only $250 is considered. The benefit of that is you can already predict which film, and therefore which starbonds, will have that cap enforced and make money from it. For example, if you have a star whose next adjust isn’t for 3 months, but it’s going to be a massive summer blockbuster you can work out the adjusted TAG by using $250 for the summer film. Chances are everyone else will be doing the same so you should see the share value start to creep up day by day for weeks leading up to the adjust. Of course it works the other way too. If a starbonds next movie is a limited release and it’s dropping a wide release, short the stock instead of buying long, then as it goes down you make money!
