6 Comments

Great scene in Margin Call, "speak to me like a golden retreiver" LOLz.

Was it "unhindered by prior errors" to sell before the crash or was made easier in that they never believed in the worthless liar loans they created then misrepresented to pension funds as AAA rated? As you allude to in (2).

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Yeah so I think the fact that they understood the garbage they were selling is noted as understood by all characters, with the only disagreement being whether they could safely do it. The risk people had offered earlier warnings, and had been silenced (and probably told to destroy any evidence they'd offered any warning). But it's still a big leap to go from there to "let's sell everything at 60 cents on the dollar." My experience is that people tend to anchor to values and are very slow to change them. So that's the part where I'm saying that having that nimble mind is very helpful.

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Absolutely agree with that it's a great example of neuralplasticity essential for a good investor and the scene is a great illustration - you explained it well.

I'm hijacking with discussion around the GFC because it's relevant to understanding of this process of changing your mind.

Your interview with Marc was the best one he's done, he's great because he checks the skips for mattresses, goes to the arcade for coin drop, pulls the cord out of the fake talkie robot.

The narrative of the GFC was, they made a mistake, confidence, risk management that's partly true.

But fundamentally they gave billions of dollars of loans to people who couldn't afford them.

It's not complicated, it was always going to end in ruin - the formulas and risk analytics were just a smokescreen.

I'm arguing the reason they could flip in real life is because they never believed, it was real easy for them.

Consider a Tesla shareholder who bought the stock in 2014 and believes the mission, they will likely hold all the way down if the skeptics prove right on the stock. Meanwhile Elon will relentlessly dump stock on them on the way down.

The really impressive feat is making a bunch of money by being an idiot, reading the other side's opinions and going holy cow I need to change my opinion because I am the sucker at the poker table.

I think that's wildly improbable that kind of mental agility demonstrated as you explain in the movie is found in any of the big wall st institutions because of how they're structured.

It's just one of many edges you get managing your own money, no shame, no people to convince, no anchoring by previously debating your thesis with colleagues and bosses, no delays in changing your mind but still extremely difficult to do.

Anyways have a nice day, thanks for your ideas and I hope you find some nice edges so you can pick the low hanging fruit and live the life you want.

😀

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Nothing comes close to Rounders. Best representation (and most entertaining!) by far.

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Immediately watched Margin Call on the basis of your comments. It did not disappoint

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Awesome. Love to hear it.

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