Million Dollar Traders

[Marek]

I'm watching Million Dollar Traders, a BBC series in which a group of ordinary people from different walks of life are given a million dollars and two months to run their own hedge fund. If you are in the UK, you can see it on iPlayer. It's pretty interesting/entertaining.

Almost every participant in this series refers to stock trading as a game, and of course it blatantly is. It really is hard to come up with aspects that are NOT gamelike about it. Basically when I watch this series I can't look at the people other than a bunch of gamers having a LAN. (A horrible nightmarish LAN.)

Anyway, it's a 'reality' type show that you may enjoy watching.

It's also a bit depressing as it really exposes you to the horrible cancerous financial trading metagame sitting on top of our society. It's got very little to do with the actual production of goods and services or long-term investment in ideas or companies or the true value of things. It all comes across as a big virtual gambling game where shares are sold and bought based on little theories about where the market will go depending on short-term news or mostly superficial perceptions. It's a game that I really wish would be stopped. (Also the graphics are a bit shit to be honest.)

Edited January 24, 2009 by Marek

[Spaff]

mind blowing - IGN ?

[SignorSuperdouche]

I think this is just as much a legitimate look at the inner workings of the stock market as Big Brother is a legitimate psychological experiment. No effort has been made to actually explain what short or long selling is or how it works, it's all about the human interest angle.

Or at least that's how it seems from watching the first episode. They may go into more depth as the series progresses, we'll have to wait and see, but I doubt it.

[gdf]

"This will blow you, your job, car and home away!" - IGN.com

[Marek]

Yeah no it's NOT a documentary at all clearly, but it does offer some kind of (entertaining but not completely unrealistic) view of what it would take to be a stock trader... like, it's not a complete fluff show like Big Brother where people just dick around... but also not a pulitzer prize winning expose on the inner workings of stock trading. I hope that was clear.

[SignorSuperdouche]

Yeah the comparison to Big Brother wasn't fair, it's not nearly that bad. I was just a little disappointed by how all the detail was glossed over.

[Nachimir]

I think virtual is the right word though. Investment and wealth have been totally divorced from production and real work.

[SignorSuperdouche]

Not really, I think it's just the show has simplified the what is happening to the point of being misleading.

When you buy a share in a company what you are getting is a share of the dividends that that company will pay out at the end of the year. The more efficient and profitable a company is the higher the dividends are likely to be and therefore the higher the share price.

What these people are doing is rather than making money from the dividends, they are making money purely on the buying and selling shares themselves - but the price of the shares still has a direct correlation to the expected end of year profits.

[Cigol]

So why did they ban short-selling? According to some Guardian article, I read off the cuff - simply because it involved my bank, some guys made something like 12m from short-selling on Barclays and there's some people unhappy that the ban was lifted because of that.

[Nachimir]

Not really

Ah, sorry. Wasn't referring specifically to the show, but to the bubble that just burst. CDS, subprime, securities, hedge fund performance... 50bn ponzi scheme, etc.

[Marek]

So why did they ban short-selling? According to some Guardian article, I read off the cuff - simply because it involved my bank, some guys made something like 12m from short-selling on Barclays and there's some people unhappy that the ban was lifted because of that.

Some people argue that short-selling is good, because short-sellers help keep an eye on companies for any bad stuff. But I don't know, short-selling always seemed completely absurd and cynical to me, like strapping little financial bombs to the legs of a company.

[SignorSuperdouche]

I watched the rest of this series last night and it was quite entertaining. I'm not sure what it says about m,e but I sympathised a lot more with

the miserable bastards who didn't give a fuck about ethics than the moaning cunts that walked out.

If anyone is interested in more of the inner workings of the financial industry I can recommend The City Uncovered. It does simplify things to cater for the idiots and is full of irritating editing that kept distracting me, but it gives a good overview of the current financial crisis.

[Banks]

wow, this sounds really good. I'll have to watch it

[blackboxme]

If you want to see how the sausage is made, I recommend Michael Lewis's book Liar's Poker. It's a memoir about becoming a promising young bond salesman inside Solomon Brothers, the firm that pioneered mortgage backed securities during the late 1980s.