‘Dumb Money’ for Dummies: Finance Expert Breaks Down Movie in Simple, Taylor Swift-Related Terms

Warning: The following contains light spoilers about Dumb Money.

Craig Gillespie's new film Dumb Money is a little bit of a miracle. I was somehow able to follow the plot even though, deep down, I had no idea what the hell was going on. (I also thought it was funny and engaging, as I wrote in my review after the Toronto International Film Festival premiere.)

But this won't be the case for everyone. Indeed, the story about how, in late 2020 and early 2021, a weirdo in his basement led a kind of revolution of "retail investors" that boosted, of all things, GameStop, is already an old saw for financial experts. Hedge fund reporter Thornton McEnery covered this roller coaster ride extensively at MarketWatch and the New York Post before he joined The Messenger in its earliest days. Over a cup of coffee in our downtown Manhattan offices (a mere stone's throw from the Wall Street Bull!), he patiently answered all my burning questions in terms we can all understand, like hypotheticals involving Taylor Swift.

Jordan Hoffman: Before anything else, did you like this movie?

Thornton McEnery: Loved the movie. Very funny. Even my PTSD from covering this story was overcome. 

JH: That was my next question. People who work at NASA always complain about movies — that's not how rockets work! Did this movie get it right?

TM: Largely right. And then had fun with the material that no one fully understands. Quite frankly, if they delved too deep, the movie would have suffered. Where it really succeeded was exploring the personalities of the hedge fund guys.

JH: Now, you really know some of these wealthy investor characters.

TM: I've covered Steve Cohen (Vincent D'Onofrio) for a decade, and I've covered Ken Griffin (Nick Offerman). When [trading app] Robinhood launched, I was fascinated with it, and Vlad Tenev is someone I've watched from afar for quite some time — and the best portrayal in the film was probably Sebastian Stan as Tenev. Blown away, he was great.

JH: Was he the more rational of the two developers of Robinhood?

TM: No, no. The party guy. And Dumb Money, through fiction, has answered a question many of us have been asking for a long time: what is the relationship between Tenev and Baiju Bhatt (Rushi Kota) in real life? As Robinhood has become more controversial, Bhatt has hung back a bit.

Seth Rogen also does a solid job as Gabe Plotkin. Rogen is such a likable guy, and Plotkin is a bit of a straight arrow. He's down the middle and very religious, I believe. Cohen and Griffin really do hate one another deeply. But Cohen actually likes Gabe Plotkin, which is pretty rare. 

I can only fathom how furious this movie makes Ken Griffin. He doesn't like being talked about at all. But Nick Offerman playing him as a villain was wild. Steve Cohen, with the Mets hat and the scene with the pig, I bet he thinks it's all very funny. Even though Vincent D'Onofrio is way too tall to play him. Gabe Plotkin probably just doesn't want anyone thinking about him ever again. And Sebastian Stan is very handsome, so Vlad is probably okay with it. 

JH: Let's back way way up now. I know I sound like a moron, but what is a hedge fund?

TM: Do you know what a mutual fund is?

JH: Kinda. That's instead of investing in one stock, you invest in a basket of stocks to minimize your risk.

TM: Right and it is actively managed by someone else that you trust, and there are lots of rules involved. Hedge funds are essentially that, but run by someone who thinks of themselves as an artist. They have higher fees, can be riskier, and are more for wealthier investors.

JH: As a normal person, I can't call up a hedge fund and say, "I have $3,000; please make this grow."

TM: Usually not, no. That's not going to interest them. But, you'd be surprised, some people — like a teacher's pension, for example — the money can be invested in a hedge fund.

JH: So the gimmick is the personality driving it? Like it's an "auteur film" by a known director instead of a direct-to-streaming movie?

TM: Yes, and some in the market are turning away from that now. Investing more in a philosophy rather than a person — maybe going back to the studio system to further that analogy. 

JH: Okay, super dumb question about stocks. Someone invents a product — let's say Pepsi Cola — and I think it's a great drink. I buy stock in this company because I think it is of high quality and the company will do well. That's the theory, right?

TM: Sure.

JH: But it seems to me that a lot of the actual stock market is, "Well, I don't really care about Pepsi as a product one way or another, but I think everybody else will like it, so I am betting that so many investors will throw in that the stock will rise." It has nothing to do with the product itself. Isn't this a little dishonest?

TM: The hedge funds we're talking about, yes, there are algorithms, and there's predictive math that plays the flow. It does get into the vagary of "what is fair" by simply moving enough money around to make things look like they are happening — which can actually make things happen. Others will say, "Wow, what's happening here?" and they will jump in.  

JH: Smoke and mirrors!

TM: Well … look, having covered the GameStop story, which has the element of retail investors [i.e., everyday people] rebelling a little bit … the stock market has never been inherently fair. The idea that very large funds can make things happen? We're never going to get around that; that's the nature of markets. But the GameStop story did pull back the curtain on this a little bit. 

JH: One more basic question: selling short. How is this legal? It's a side bet that a company will fail. It just seems so nasty.

TM: Well, not exactly. What a short sell is supposed to do is for an investor who has researched a stock to say, "Wait, these people are full of crap." If something is super inflated, it will bring it down to Earth. They borrow against the stock and put their money on the line to where they think the stock should be. Which is what Gabe Plotkin does, and then he goes bust. 

Short selling, at its most pure, can actually push bad actors out of the market. What this movie does well is show the bastardization of short selling, the manipulation of it. During the GameStop story, there were some investors who actually stopped shorting for a while to reevaluate how they were doing it. 

JH: Okay, Paul Dano's character Keith Gill, who is portrayed as kind've a nutty guy, his mantra about GameStop is "I like the stock."

Now, I don't know anything, but I know that GameStop, which sells physical video games in dead malls, seems like a bad bet. So, was he just a weirdo, and this all caught on for lulz?

TM: I can't really speak to Keith Gill's thinking, but I did read his investment thesis at the time, and he did interesting work. He wasn't from out of nowhere — he worked for Mass Mutual, his videos had the necessary CYA on there. And he made a good point, which was that GameStop was certainly a troubled company — he never said it was the next Amazon — but the market was shorting it too much. It was clearly synthetic shorts at over 100%, so people weren't actually borrowing; there was chicanery there. It was artificially depressed. And maybe the company could have moved to e-commerce and get out from under a little bit.

JH: Yeah, before Blockbuster fully died, they survived for a little while doing some streaming alongside Netflix.

TM: Exactly.

JH: But Keith did nothing illegal, right? He just encouraged people to buy a wacky stock.

TM: No. And this all happened at the perfect time — it was the pandemic when there were no sports, no one could go to the movies, everybody was a little nuts, plus the government kept interest rates down really low, so money was really cheap. Then you had this new app, Robinhood, which was practically designed as a game where people could invest for free — a perfect storm.  

JH: I have an insane question. The most influential person on Planet Earth right now, easily, is Taylor Swift, right?

TM: Sure.

JH: Okay, let's say on a Monday, Taylor Swift calls her financial team and says, "Slip a whole boatload of my money into Pepsi stock," and then on a Tuesday, she goes on Instagram and says, "All my fans ought to buy Pepsi stock." The price would skyrocket, and she'd make a fortune. Is that illegal?

TM: We are now in a gray area and I am not a securities lawyer. But I think some of it would depend on what she did afterward. She'd have to say, "I am not a financial advisor."

JH: But she can say, "Oh, this Pepsi drink is so good, you should invest in this …" I mean, I can do that right now on social media.

TM: Not illegal. But if she then cashes out at the high, lawyers would start poking. She's allowed to bet, but the SEC would then work out some new rules, probably. 

I never understood why Congress brought Keith Gill in. There were no concerns, for me anyway, that he broke the law. 

JH: It's interesting that he's kinda faded away after all this.

TM: I get the impression he had his 15 minutes, and he's good now. I would assume it's fun to be famous until you are hauled before Congress.

If there's one thing about the movie I didn't like, it was how it suggests at the end that the retail traders won. That's not really true. If you hung on to GameStop stock, you are back at zero. Steve Cohen is still rich. Ken Griffin is even richer. Gabe Plotkin has a different career now, but he's fine. 

JH: I like how, during the hearing, Gill admits that he doesn't fully understand the market but then says no one does. This is like in A Serious Man when math professor Larry Gopnick says the whole point of Schrödinger's cat is that no one understands Schrödinger's cat.

But is there one brainiac out there who really does understand all of this?

TM: Whoever says they understand the market best at any given moment, there's something around the corner coming to surprise them. That, in a way, is what keeps the market somewhat fair. No one saw this coming.

But it is true that the people who are most clued-in are not regular Joes with their 401K. The financial columnist Matt Levine likes to say, "All trading is insider trading."

JH: The movie suggests that there are new regulations in place preventing something like this from happening again.

TM: And there aren't. There's been talk about it. Payment for Order Flow, which, if this movie really got into would really have derailed it as a story, is still a problem. That's the next movie.

JH: Good, you can explain to me what the heck that is at that time. 

Dumb Money hits theaters nationwide on Sept. 29.

This conversation has been edited for clarity.