I was talking with a prospect who happened to mention the movie The Big Short, and it reminded me just how well it captures the madness of financial markets. If you have not watched it, you are missing out on one of the best finance movies ever made.
Based on Michael Lewis’s book of the same name, the film turns complex financial instruments into something even a non-investor can grasp. Featuring stars like Steve Carell, Christian Bale, Ryan Gosling, and Brad Pitt, the film takes a sharp look at the 2008 financial crisis, one of the biggest economic meltdowns in modern history.
The Big Short does a great job of showing just how isolating and frustrating it can be to be right when everyone else is wrong and when they also think you are crazy. The movie also serves as a reminder that markets are not always rational and crises often build up in plain sight while the majority remains blissfully unaware, kind of like ignoring that funny noise your car has been making until it breaks down in the middle of the highway.
As someone who navigates markets daily, the lessons from The Big Short resonate deeply. It is about questioning consensus thinking, doing the work and being willing to take a stand when the data does not align with the prevailing narrative or when things just smell fishy.
Interestingly, Michael Burry the same investor portrayed by Christian Bale in The Big Short made headlines for shorting what he sees as an overvalued AI sector, taking large bearish positions against high-flying names like Nvidia and Palantir.
Coincidentally, both stocks are part of my own tech allocation though my view remains long-term and strategic rather than speculative. Whether Burry’s move turns out to be another visionary call or simply a case of being early remains to be seen.
While we may not be on the verge of another financial crisis of the same magnitude anytime soon, the importance of not blindly following the crowd remains crucial. So, if you have not seen The Big Short, do yourself a favor and watch it.
If you have? Maybe it is time for a rewatch. After all, history may not repeat, but it sure does rhyme and sometimes, it even throws in a plot twist or two.