FOOL'S EYE VIEW
Top Five Financial Films

By James Carlisle
November 18, 2002

Books are meat and drink for people interested in finance and investment, but there a few decent films as well. One or two even make decent points about the subject too. Here's our top five...

5. Rogue Trader

First on the list is Rogue Trader, with Ewan McGregor starring as Nick Leeson, who famously bankrupts Barings Bank while attempting to trade his way out of some (initially) small losses on Nikkei futures. Leeson becomes increasingly desperate, betting larger sums as the losses escalate. He was into the hundreds of millions of dollars before anyone in the London head office noticed that some money was missing, although apparently half of Singapore knew that something was up.

Must see moment

Ewan McGregor staring at himself in the mirror saying "I've just lost fifty million quid".

What's the point?

The point is pretty much the same as from the real life Nick Leeson debacle -- when you get yourself in hole, stop digging. Doubling up to recoup losses is the road to ruin for gamblers, speculators and investors alike. Financial decisions should be made on a cold assessment of risk against reward, looking forward, without the emotional baggage that comes from trying to get yourself out of a hole. The best way to recover a situation is to accept the losses and start making decent individual decisions.

4. The Million Pound Note

Next on the list is the 1953 production of Mark Twain's short story: The £1,000,000 Bank Note. Two brothers are in dispute as to whether a man could live in London for thirty days purely on the strength of a £1,000,000 note, with no explanation for where it came from (so that he couldn't exchange it for smaller notes for fear of being arrested). Gregory Peck stars as the poor man picked for the experiment.

Must see moment

Gregory Peck producing his note to a tailor that had claimed, sarcastically, to be able to change any note that he might produce.

What's the point?

Money breeds more money. For the hero of Mark Twain's story things came a relatively easily, but the rest of us must rely on the 'miracle' of compound interest. As we save more money, so that money makes more money for us. Of course the same goes for debts: the bigger they get the more they cost and the harder they are to shift (just ask Nick Leeson).

3. Trading Places

Sticking with the idea of evil brothers making silly bets and exploiting others, at number 3 is Trading Places. Eddie Murphy stars as the beggar selected by Randolph and Mortimer Duke to 'trade places' with the preppy protégé (Dan Ackroyd) at their blue-chip broking firm. The experiment is to settle a dispute over 'nature and nurture', to see whether Murphy and Ackroyd will slip seamlessly into eachother's role. They do, but they also uncover the plot and set out to retrieve the situation and exact revenge.

Must see moment

Various scenes involving Jamie Lee Curtis are well worth watching, but the key moment has to be the look on the Dukes' faces when they realise the game is up and they've lost their seats on the stock exchange.

What's the point?

The film makes general points about greed and about not exploiting others, but the most important financial lesson is that you can't add value in the world of trading. Eddie Murphy slips comfortably into his role of trying to second-guess the market for pork bellies and frozen orange juice and is no better or worse at it than the Harvard-educated Ackroyd. Their revenge is only secured with the help of insider knowledge.

2. Boiler Room

At number 2, Giovanni Ribisi plays college drop-out Seth Davis, recruited to work in the 'boiler room' of a dodgy firm of New York brokers. The daily grind is to make cold calls to anyone and everyone that looks like they might have some life savings and talk them into buying some of their hot stocks. Seth discovers that not only are they ripping the 'customers' off with excessive commissions, but that the 'hot stocks' they're selling are part of a money laundering scam and have no substance whatsoever.

Must see moment

Vin Diesel, as star broker Chris Varick, responding to a cry of 'recco' with a demonstration of how his hard sell never fails to hook a customer.

What's the point?

Much of the financial world is founded on greed and self-interest. If someone is giving you the hard sell, it's because they really want you to buy something. Always stop and think why that is. Invariably it won't be out of the goodness of their heart.

1. Wall Street

The number one financial film of all time is surely Oliver Stone's 1987 classic, Wall Street. Released just weeks after the 1987 stock market crash, the film features corporate raider Gordon Gekko (played by Michael Douglas) taking the youthful broker Bud Fox (Charlie Sheen) on a magical mystery tour through the financial excesses of the 1980's. Fox is increasingly sucked into Gekko's web, but finally pulls the rug when his own father is exploited.

Must see moment

Gordon Gekko's speech at the AGM of the dysfunctional corporation, 'Teldar Paper':

"The point is, ladies and gentleman, is that Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit."

All good stuff, but he neglects to add that greed can also be corrupting.

What's the point?

There are no short cuts to riches. At least any 'reliable' short cuts that do exist are liable to wind you up in jail. Long-term wealth accumlation is about a hard day's graft, saving hard, not being too greedy and being patient, as demonstrated throughout the film by Bud Fox's dad.

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