It's a celebration of people!
Among the most rewarding markets to model and trade are the highly inefficient young markets where the fundamentals are the main driver of value. An example is the Eurovision Song Contest which reaches the Semi Final stage this evening with the Final in Helsinki on Saturday. Though it is distinctly uncool to enjoy this extravaganza, I do. Some of the music is actually bearable (at least once), the modelling is complex, it is a celebration of pan-European culture however kitschy and market corruption is a major factor in any analysis which, when set against a background of sequins and histrionics, keeps me amused for a few hours.
The pricing of these markets is hilarious. The skilled can make a killing. Most bookmakers price up these events and, with the similarly analysable reality tv shows, are prime territory when approached with an open mind. You cannot believe how much we made on Bez winning Celebrity Big Brother, for example, just because we knew how well he would come across...
So what are the key overviews that one needs to be addressing. I offer a few angles below:
* Last year's appalling winner did not win because Eurovision had suddenly developed a heavy metal/rock audience. It won because it reminded large numbers of people of the type of dumbed down dross equivalent with that sad movie Spinal Tap. Consequently, the mimic brigade who think that moaning on in a semi-goth angst-ridden stylee is going to win any votes this year had better think again. Many of this year's entries are clear evidence that the unpleasant spectacle of rock lurks just below the surface across Europe.
* When virtually every artist I choose to listen to is Black, the presence of just two Black musicians on the Eurovision videos is a clear indication of how successful integration has been across the continent and how meritocratic the selection process is everywhere.
* The bookmakers cannot corrupt Eurovision markets. If the industry builds up unpleasant liabilities (as is happening with the Ukrainian entry), the prize will always be bigger than the corruptive bait from the aspect of the artist(s).
* This year's competition is surprisingly strong with a generally less formulaic approach leading to an open betting market. Usually, the bookmakers enjoy big runner fields but enhanced modelling can root out value.
* Diaspora counts... Be wary of the impact of immigrant groups and their redistributive impact on the vote - Poles in England and Eire; Turks in Germany; Romanians in Spain etc etc.
* Pan-European culture has homogenised our listening habits both directly and through the use of cultural imagery in the media. I-pods across Europe are shuffling the same tunes...
* National Feelgood Factor (NFF) is a major input to any solution and modelling such areas reveals complex structures in the interplay between different macro events on a nation's psyche. Ukraine - dysfunctional government/ Euro2012/ pseudo-revolution/ country effectively split in two/ "national pride" destroyed by choice of rural comedian as a portrayal of a modernising (sic) country/ extensive corruption...
* We believe that this year's winner will come from one of two schools - self-parody or pure musical talent. We would hope for the latter but Europe showed a desire for the zany last year and the continent feels no less highly strung this time around.
* Regional voting and nationalistic posturing is a key part of the modelling. Both the Semi Final and the Final must be approached independently and, indeed, fullsome analysis of the Final is only really valid after the full quota of finalists are known.
* Careful filtering of the finalists has ensured a more geographically neutral spread for the Final 24 with Eastern Europe having some domination and there are regional block weightings that need to be assessed. Geographical proximity may be many things - compare Albania/Turkey with Serbia/Montenegro, for example.
* Analysing Eurovision combines market analytical skills with A&R and musicological talents. The skill is to find value in the market but, in order to achieve this, one has to be able to assess the strengths, weaknesses and "it" factor for all the songs and also have to be able to address the cultural style that exists continentally which meant, for example, that everybody across Europe was ready for Dana International...
* Only bet with the Betting Exchanges (BXs) as the traditional bookmakers treat the overround with contempt with William Hill currently offering 156% book while Betfair are 104% and you can trade against a song winning with the BXs. Betfair additionally offer Top 4 and Top 10 markets that enable a subtle portfolio of positions to be developed on each act.
Ignore the nationalism. Enjoy the complete lack of Americanised muzak. It really doesn't matter who wins - we all win by sharing crap things about our respective cultures. This year's Israeli entry is pure Cynical Reality and, if it wins, so do we (and not only in a financial sense). I celebrate the global and continental village spectacular society portrayals of our reality even though I know, deep down, that I shouldn't...
Perhaps it is because I am a north west European with south and east European tendencies and the contest is nearer to a federal united states of Europe than any of the political structures in Brussels or Strasbourg. After much thought, that is the only viable explanation as to why I find that Eurovision is such a giggle and totally essential viewing! Even if it does mean recognising that we have become a continent full of goths...
And remember... Away middle eights count double :)
