Sunday, November 10, 2013

The Sopranos, "Pump and Dump" schemes and my personal process on "How to watch a TV Series"

When I say "Sell", you "Sell". You got me?

After years of avoiding the late night binge-watching that would inevitably come with deciding to take on The Sopranos TV series, I bowed to sibling pressure, subsequently relented, and as expected, I am now hopelessly addicted. I recently finished watching Season 1.

My particular way of watching TV series could be labeled as unconventional: subtitles are paramount to understanding every piece of dialogue (to miss a word or nuance is to miss the whole narration), I pause regularly (to understand the different person, place or thing that is mentioned that I do not know) and I sometimes rewind to rewatch particular scenes that are key to character development.

While I don't publicize this way of viewing or even suggest it as "the better way" when it comes to watching critically acclaimed series (i.e., I don't pause much when watching "Suits"), this particular method has worked very well for me.

I'll summarize the benefits related to following my TV-Series watching process:

1) User-friendlinessEverything (characters, settings, scenes and subtext) becomes fully understandable, comprehensible and intelligible. Which means: you enjoy the series even more. Or at least beyond the enjoyment that comes with the simplistic self-gratification some viewers get with just watching "people get shot" or "things blow up".

2) Perspicaciousness via Autodidactism: I am a firm believer that intelligent conversations with intelligent people stimulate intelligence, or at the very least, promote a clearer understanding of the non-obvious. In a series, witnessing intelligent dialogue between intelligent characters in a well thought out scene, can lead to "learning triggers", which in turn, promotes autodidactism, and as such, encourages further understanding and enjoyment.

3) Boredom is never an option: With the brain in a constant state of discernment, there are no boring episodes. Ever. If there are, the viewer can safely assume that the series has pretty much, jumped the shark. HBO will most likely never sacrifice content quality, so series like The Sopranos will always be boredom-free.

In practice, when applying this formulaic process to The Sopranos, I was pausing more than usual to define every Italian word and phrase that was being mentioned. The Italian-American culture and sub-culture represented on screen became easier to understand, and as a consequence, more compelling.

If I've lost you because this has nothing to do with Economics or Finance, I will kindly ask you, Dear Reader, to keep on reading...there is a point to all of this.

Pay attention or gedoudahee

The first episode of the second season of The Sopranos showcases, amongst other things, the evolution of Christopher Moltisanti (Anthony Soprano's nephew), who initially started out as small-time thug leader, and is now positioned as a high-functioning career criminal, with his own business-based crew. His present team, now working out of an office, is helping him foray into the more sophisticated world of white-collar crime.

Soon enough, a new term is mentioned, concerning the illegal trading scam Moltisanti is heading - one of the office henchmen mentions it after having sent a dissenting stock broker to the hospital: pump and dump.

Pause.

5 minutes later - 

A "pump and dump" scheme is basically a small-cap (penny stocks, basically) fraud where brokers misguide investors by pumping up a stock they own, and then dumping it for a hefty profit when the fraud becomes unsustainable, leaving investors with a worthless investment.

The film "Boiler Room" also made a point of the scam in the year 2000. It must be no coincidence that The Soprano's second season aired in 2000.

This must mean that the scam was predominant during those years, as TV Series tend to reflect popular culture. It's no secret that the dot-com bubble, which occurred during the late 1990's, until bursting in 2000, was exacerbated by illegal and legal versions that followed the basic principles behind the pump and dump. Investors were duped into considering clicks and eyeballs as legitimate revenue-drivers, as much as other would-be investors were flat out lied to when it came to the businesses they were supposedly investing in.

The subject gets even more interesting when you start thinking about pump and dump schemes in the 21st century.

An automatic thought: in this post Bernie Madoff day and age, with a tougher SEC, how can people still do this?

Maybe not through old-school cold-calling anymore, but criminals can certainly hook the ignorant and inattentive masses through fake analysis, social media outlets, spam and even hacking. Click the links in the previous sentence for articles that describe such actions, all recent. 

The impending and progressive worldwide regulation of the Internet is beyond the scope of the article, but denoting the importance inherent in recognizing fraud as a pervasive and persistent crime in the cyber realm should be taught to every investor out there.

In the end, everyone is responsible for the risk they decide to take, as is very entertainingly manifested in the series The Sopranos - but maybe not everyone is astute enough to recognize the risk inherent in a seemingly risk-free investment.

I'd like to think that maybe someone out there, watched The Sopranos, or some other show, and somehow steered clear of danger.

No wonder governments and institutions banned books before television existed.

Content matters.