‘Dumb Money’ on Netflix is worth a watch this winter.
Memorable Wall Street films often serve as reflective mirrors of prevailing sentiments about finance. At the heart of “Wall Street,” Gordon Gekko’s blind greed encapsulated the ethos of the late ’80s. “Margin Call,” featuring analysts pulling a desperate all-nighter to save their bank, reflected the somber mood post the Great Financial Crisis. Fast-forward to the pandemic era, and “Dumb Money” delves into the frenzy that ensued in the first half of 2021, when financial news was dominated by GameStop. As you may recall, that stock increased over 1000% when hedge funds were forced to cover their short positions while retail traders enthusiastically chased it higher. The film explores themes of populism, meritocracy, and behavioral economics, and illustrates the influence of millennial culture on investment trends to weave its narrative.
Central to the storyline is the exploration of populism and investing, with Keith Gill, aka Dark Kitty, a retail investor, emerging as the hero challenging Wall Street’s exclusive ownership of winning ideas. His value investment thesis in GameStop, a struggling retailer, gained a following online after he posted videos and shared his portfolio (and cat pictures). His popularity soared with the remarkable returns GameStop experienced in a short period. This story underscores how online platforms and social media empower a new wave of individual investors to actively engage in the stock market.
“Dumb Money” also questions the perceived meritocracy in investing. The movie highlights how individual investors, rejecting conventional norms, are contrasted with a financial elite portrayed as out of touch, aloof, and willing to exploit regulatory grey areas to protect their own fortunes.
The emotional rollercoaster of the “meme stock” frenzy is vividly portrayed, capturing the euphoria of ‘life-changing’ trades and the anxiety over when to secure profits. The question of when to sell is always part of the discussion for these young investors. What the movie doesn’t delve into are the very real dangers of treating investing like gambling and/or ignoring the impact of taxes. After all, it is a movie, not a finance class.
For Xers and Boomers, “Dumb Money” spotlights the pivotal role of millennial culture and how important it may be to comprehend and adjust to (if not embrace) the tech-driven lessons of this age group. The collective and collaborative nature of millennial investors is showcased, demonstrating how they effectively leverage technology to share insights and strategies, and to challenge established financial norms. Discussion boards become spaces to reassure one another and share memes about “hodling” and “diamond hands.” Contrastingly, bad actors posting offensive content are downplayed as not truly reflective of the spirit of these chat boards and with limited impact.
Whether “Dumb Money” will earn a spot on the Mount Rushmore of financial movies remains uncertain (with “Trading Places” retaining its number one position, in my opinion). However, it is certainly worth viewing, especially for younger individuals interested in investing. The film could prompt conversations about markets and offer a perspective on the evolving nature of information flow and financial markets, a phenomenon that continues today. (Viewer discretion advised for salty language, mostly from Pete Davidson.)
By Nick Bundy