Investment Analyst Explains: Dumb Money 

"I know I come off as a buzzkill" that's exactly why we're here Richard. No sensationalism, no ridiculous claims, no stock picks or clickbait. Just good, honest, educated looks at finance

Normally, making a story like this where hedge fund managers are explicitly bad guys and retail investors as good guys would be a fine idea for a movie, but the fact that an actual investment cult spawned from this situation and they now essentially have a big budget film validating their sentiments worries me immensely.

Just as Jared Vennett said in the Big Short, you should never glorify or advertise a position. This movie does the opposite lol.

Richard, I was able to earn CPE towards my CPA license in Illinois by listening to your podcast on LimiQ. Was a whiplash to see the plane bagel at work. haha

The problem is the film tried to create a story of good guys and bad guys. Of course there's nothing wrong with showing hedge fund managers as villains, but trying to show the retail investors as heroes is just not accurate. For all their blather about politics and sticking it to the hedge funds, they were ultimately just trying to make cheap money on speculative trading, exactly like the hedge funds do. And most of them got burned, because buying in to gamestop as it flying past $20 was just the dumbest of dumb money. There is definitely a movie in the gamestop and greater memestock shenanigans of 2021. But it isn't a story of heroes and villains. The events really need to be best told through a black comedy or a farce. A story of a fairly normal situation, a hedge fund shorting a small company based on a possibly over-pessimistic view, some small players speculating that position is too negative, and then it just grows and grows, as dumber and dumber money piles in, forcing everyone involved to have to address this craziness in their own crazy ways. It might be a harder film to make, and not as crowdpleasing for the populist set, but it would likely be a lot funnier, and more accurate.

Why watch this movie when you could watch This Is Financial Advice for free, which also gets all the information correct and is probably more entertaining too

I remember watching a movie called "Eat the Rich: The GameStop Saga" on Netflix which is an episodic documentary that talks about the same thing, except in more detail compared to "Dumb Money". I only knew about what happened with GameStop after watching the news at the time, so I had no idea what was really happening before I watched it.

Please keep putting things in perspective, as party-crashing it might be! I think you can‘t emphasize too many times that there is no „magic“ or „secret“ in investing. Nothing can change that at first you ALWAYS have to earn the money and usually keep earning your money by work all of your life - and that‘s fine!

Thank you for posting this, and in such a sensible and responsible tone too. Thank you for doing the right thing.

I remember buying some puts (like $1k) in the middle of the squeeze thinking this is absurd and then it kept going up and was like ok maybe I should sell, but then made a small profit even though the price of the stock was even higher 😅. That's very rare to see in options btw, but was due to "implied volatility" (the price paid for the options in general) offsetting the increase in stock price.

So kinda fun fact, the actress who plays Riri (Harmony's partner) is the main character in Industry on HBO. Completely flipping her role and working for a large bank in London as a trader.

What annoys me the most with notion that the GameStop ordeal was some kind of "social movement" was that they weren't trying to fix any of the massive flaws or inequities in our economic system -- the ones we basically all agree exist -- they just wanted to be the ones cashing in on them.

"... to be an annoying stickler, ..." I like the stickling. It's one of my favourite parts! I hadn't heard of this movie; thanks for bringing to my attention.

Thanks for reviewing this, Richard. I wasn't sure if I wanted to see it but you made it sound kinda entertaining. Might give it a chance now. :)

14:00 I think there is an important distinction to be make between "pausing trading on a stock" and "only pausing "buy-to-open" trading on a stock. The former is relatively common for volatile stocks, while the latter is perishing rare. Not only that, but the former is effectively trade-neutral, while the latter puts express downward pressure on the stock price.

The Main shady thing during the Gamestop shortsqueeze was when trading was shut down. You never see trading shut down when the small guy loses and the big investor wins. Only the other way around, that felt a lot like a 'the casino always wins' moment where the games were stopped because someone unintended started to win. 11:00 Yeah this

I remember watching this last month, and I was surprised to find out the real Keith Gill is better looking than the actor.😂

Isn't the hold "hodl" thing pretty obviously something people say so they can be the first to sell when the price gets high enough? It's something a conman would tell their marks.

Yo, what's up everyone? It's your favorite commenter here with another video feedback. Today, I'm going to be reviewing out this video by the talented creator. Let me tell you, this video is absolutely amazing. I'm not even kidding. It's so good that I'm actually starting to feel a little empowered. I mean, how can someone be so talented? Seriously, though, this video is a must-watch. It's informative, entertaining, and just plain good. So what are you waiting for? Go check it out right now!

I think if your going to be emotionally attached to a company it better be your own

I haven’t seen the movie, so take my opinion for what you will - based on what I’m hearing it sounds like this is one of those movies that’s not necessarily for people that are interested in the financial and political underpinnings of the game stop fiasco, but people who are angry at rich people in this country in general. The GameStop fiasco is just sort of their medium with which they’re painting. If that’s the purpose, I kind of wish they had just made a fictional story up entirely instead of trying to twist an actual and extremely complicated story into what they wanted. I include myself in the people that are extremely fed up with greedflation and and just a general tyranny of billionaires in this country, but I wish they wouldn’t use it as an excuse to gloss over, important factual and historical details. It really just further is the narrative that the poor people that are angry at the rich people just want revenge and don’t actually understand economics and finance nor care to.

Others have said it, but Folding Ideas' video on the matter is spectacularly good.

I like the thumbnail, had a good chuckle.

Basically, if you got a robinhood ad before the video, the video is about you. Also if the robinhood ad worked on you.... Stop

You’re the best Richard! Keep up the great work. On the way to 1mm subs

Its still a huge problem when an exchange removes a buy button. Thats not a free market.

sounds like a good movie .

Have you seen "Other People's Money"? It's an early 90s movie with Danny DeVito. I don't know that it would warrant a movie review. It isn't that complicated. It is a fun movie though. DeVito gives a good speech in it.

I divide into three categories what people can do with securities. They can invest. They could trade. And they could gamble. The gme story is one of gambling. Perhaps the hedge fund side were trading not gambling. But retail money was just gambling.

Doesn’t kill the company unless the company is valiant.

Glad you're helping us walk through these nuances. Thanks.

Pete Davidson was on point at least. The casting in general was great.

Folding Ideas told this WAY better, with the actual story not the movie, plus a real deep dive into the ape culture. It was clearly a pump and dump though.

Thank you Richard, this was a very valuable piece of public service you did - clearing things out and giving your sane and rational and professional opinion about the movie and its emotional message. I'm sorry you had to say it like almost feeling guilty, but I'm glad you are doing this! I hope you don't get too much hate for being against the herd though. Keep it up, I really enjoy your balanced views and very informative videos.

Another great video as always, well done!

I'm curious...hedge funds lost a lot of money shorting at $13. Did anyone short it at $80 and make a ton when it dropped from the artificially high prices while it was being short squeezed?

i enjoy your videos, very educational.. all the way from South Africa

We are so back baby

Always a join to see a new video from you

I mean that entire "stick it to the man"-framing echos (unsurprisingly) and ironically the dominant spirit of the whole issue (involuntarily or with intent by the film makers,...you decide) . What was that line from The Big Short about truth and poetry and people hating it!? Imagine this movie being totally 100% reasonable and not taking the cheering side of,...well "dumb money" (there is another hint in that choice for a title), how successful would it be? People don't seem to care as much about facts as they care about how they like to feel. It's this self-righteous conviction that blinds you in learning how stuff like this works for real. Great commentary and analysis,...will give it a watch!

Its a great commentary on, among other things, how people in social media silos create their own narratives as "truth", regardless of what the real truth might be. And at the same time, how this can completely work for said people, leaving them happy, as long as they can adapt the narrative to whatever future actually emerges. As well as also completely lead someone down a rabbit hole of nonsense that ends in disaster (families broken apart by COVID politics, for example, that are still broken to this day). Sound familiar? Combine stocks (well, money and economics in general), crypto, and politics together and half of America (at a minimum) has already fallen into this trap. The result is a fragility in the social fabric of society that more or less is guaranteed to break catastrophically at some (unknown) point in the future when reality diverges enough that no silo-bound narrative can rationalize what is happening. Some think the breaking point is already upon us, driven by politics in particular. -Matt

Dumb Money, also called "Düsseldorf" in 2008.

Blinkist seems like an awesome idea, I might have to try it out

Why do you say options are more risky? The maximum risk is known. For put options vs shorts for example.

"We did it, reddit!" The movie

I will say, when I watched Dumb Money, I was surprised because it was better than I thought it would be at dealing with some of the more nuanced parts of what happened. I do think it would need more discussion on the fallout for it to be truly excellent, but all told it wasn't half-bad.

Playing game with marked cards on set up table where opponent use fake money, when you sacrifice money for which you had to give up your effort and time, is not the wisest strategy.

Here is a massive point of vexation for me about this movie: They split-adjust GameStop's price. It's fucking excruciating. It is as if filming a motion picture about the Occupy-Wall-Street movement against the back-drop of the Twin Towers.

Don't apologize for this! People believing that the markets are magically and impossible to understand is why people end up not saving enough for retirement, or assuming that they'll be able to lotto their way to success, etc.

My favorite scene was when MAYO BOY dropped mayo on his pants during his little breakfast when GME was going up.

Early squad! Thanks Richard! ♥ from Malaysia!

…funny, forgot about the pet pig scene. does that allude to the saying, “Bulls make money, bears make money, pigs get slaughtered”?

Like a wise guy tweeted today.. you always sell a position If you gonna tweet about it 😂

Question. Do you think Keith Gills spreadsheets is better than other hedge funds tools? I mean he doesn't have a Bloomberg terminal.

Not a buzzkill, just solid ass facts my man. Good video and well spoken.

😍 Love the reasonability!

I wish you'd explain the DTCC part a bit more. Why would disallowing buying solve any sort of margin problem that HOOD would have? If I recall correctly, GME was already not allowed to be traded on margin. So any purchase of the stock would have been with funds already in HOODs custody. What does volatility have to do with this at all? They'd have the funds to settle any buy orders.

I still like the stock 🚀 🚀 🚀

I see America Ferreira Seth Rogen or Nick Offerman in the cast, I watch... It's as simple as that.

Worth saying that usually these collusions take place in such a way that they are hard to prove or can't.

Can you do "finding the money" and or something on MMT?

Omg i need this

I didn’t understand anything you just said, but that’s a really nice t shirt👚 👍🏼

Richard, I have cancer. I'm too old for make a wish but my last dying wish is for you to make a serious video critiquing a absurd movie. Imagine providing context and in depth analysis into the business practices of Mr Krabs or reviewing the outcomes of everyones favourite finance cartoon, Jim Cramer.

Can you also do Wall Street and Wall Street money never sleep

Okay but are we all going to make it?

Why do you apologize for being a "buzzkill?" The entire point of this channel is level-headed and down-to-earth advice, IMO.

It's not a total loss until your investment goes down to 0 or the investors liquidate their portfolio investments, only based on the reacting to fearmongering tactics that are used against the retail investor. Retail investor can profit from a long term time horizon portfolio too. ✊

Okay, your citadel chart looks a lot like the ftx scandal. Can you explain how Citadel can feed itself, but ftx could not do that for alameda.

I watched your video and I don't think you mentioned "naked shorting"? Am I right?

"the stock price doesn't actually influence the day to day operations of the business it's trading for" this is wildly inaccurate

Because I don't waste my time investing in stocks period, not my problem

Just another "rich people bad" movie, wholly unmoving.

The movie glorifies gambling on stonks lol

AMC is next….

Nice

Ive currently lost 475 bucks on a 500usd buy of amc stock!

Nice job on the thumb nail it made me click

10:35 Another god damn bailout! Why won’t they let me bankrupt the company so I can get rich. 🙄

I get you’re trying to clarify the bit about Robin Hood closing trade but I feel with the added information it further drives home the point that the rich and powerful are on some bullshit. That when shit hits the fan they just go “well let’s bail ourselves out” instead of taking the loss like the “little guy” always does. Also the fact that it was more widespread that just Robin Hood and game stop further shows the blatant corruption and failure of a system that seems to poorly exist the further prop up those in positions of power

And other people money

9:49 asking price is $0.01 higher than the bid price. How does the broker make money in this case? He will buy at $13.43 and sell for $13.42? I must’ve mistaken something

The message "We are all going to make it" is inherently dumb. The market is a market of winners and losers. If you sell a stock at what you think is going to be the highest price (which why would you sell a stock for any other reason) you are selling it to someone who now is going to lose money on their investment.

Did you see folding ideas video about the whole situation? It’s like 2 hours. Was really good.

Was DCA in GME at $3.10. Looked one day it was $2500, the next it was $33k. 😂😂😂 What a time to be alive.

Thumbs up from Ottawa!

If anything the retail traders here are the dumb ones. Once they lost that 6 billion and the bailout was public they should've cashed in and changed their lives. Not hold then double down ffs.

From the man who sold you cdos

At the end of the day its Hollywood, but I find your positioning biased.

I was a part of the AMC subreddit back in mid 2021 and it was a lot of fun at the time but a terrible way to get started investing. Now i'm making money buying puts on AMC so full circle I suppose

Whether you're an investor or a consumer, don't become a blind fan of one company. Never involve your emotions. It's just a product/investment. If it doesn't benefit your life, walk away. Words to live by. It would be so wholesome if they at least taught this in schools.

The Plain Bagel has friends? Had to stop the video from the laughingbecause all financial nerds have no friends and their spouses have boyfriends.

PARTY POOOPER BOOOOOOOO. With all your big brain common sense investing advice. I say GOOD DAY SIR....I SAID GOOD DAY :D.

I did not care for the movie. I gave it 4 stars on imdb. I found it was poorly done. Not an enjoyable watch as i found the big short to be. Id prefer more a documwntary version rather than movie version. Pete Davidson was ok in this ..but i can't stand him. America ferrara may be the worst thing...ok top 10 worst thing to happen to tv and movies in last 10 years or so. Music was annoying. Scenes were short and choppy. 2 minute scene. New scene, 2 minutes, annoying music. They did that about 6 times or so. Enjoyavle when Dano and megan mullalys husband were on screen. Edit this down to about 40 minutes, and it would have been better.

Good movie. Basically the equivalent of financial porn.

Are these "friends" in the room with us now, PB?

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Bump

This movie was trying so hard to be the big short

Ah, woke progressives making an anti-capitalism movie while making money in the stock market. 😂😂😂