From the famous “Greed is good” line in 1987’s “Wall Street” to the outlandish language in “The Wolf of Wall Street,” the film industry is no stranger to showcasing stocks, bonds, investments, and more in some of the biggest blockbusters of our time.
Between big-budget Hollywood movies and indie documentaries, stock trading has been a hot topic for movies. Of course, movies are designed to make money too, which has led to some flicks that were “inspired by true events” in the loosest sense of the phrase. How can you be sure the movie you’re watching is an accurate depiction of what actually happens on the stock market?
Some movie plots blur that line more obviously than others. How many of these movies are accurate, and how many take typical Hollywood liberties for entertainment value? Let’s take a closer look at how well some of these famous films actually connect with true stock market themes.
What Are the Basics of Stock Trading?
To understand whether or not a film depiction of the stock market is accurate, it’s important to know as much about stocks and bonds as possible. The stock market might seem complicated, but its concepts are simple.
You’ve probably heard of the New York Stock Exchange or the Nasdaq. These exchanges are where investors buy shares of companies, which use those funds to further grow their business. Investors buy and sell different stocks at different times. The exchange keeps track of the supply and demand of each stock in order to determine a price. Investors can’t just pick up a stock off a shelf, though. They have to make a “bid,” which is typically lower than the price the stock is listed for. The listing company can meet the investor's bid or ask them to bid more.
Because stocks aren’t traditional “products,” purchasing them isn’t as easy as pulling out your credit card. In fact, you can’t typically buy stocks with a credit card. While there are a few exceptions to this rule, purchasing stocks with a card can be a risk if you won’t be able to make your payments. Because there are so many options to consider, it’s important for investors to have a trading strategy. If you’re thinking of buying stocks, ask yourself things like:
Are you interested in penny stocks or something larger?
Where will you enter your trades?
What are your goals?
How will you measure your success?
Once you know the answers to these questions, you can make your decisions regarding investments much more easily.
What Does the Future of the Stock Market Look Like?
The stock market changes all the time. Trades used to be made solely in actual physical locations. While that still happens, now the world of virtual trading has become more popular.
One of the more popular advances in recent years is the growth of cryptocurrency. While that word may have been foreign just a few years ago, cryptocurrencies like Bitcoin have taken the financial industry by storm in recent years. Bitcoin is like digital cash. There is no physical form of it. When you’re using it in the stock market, it’s better to consider it an asset rather than an amount of money you have in your pocket. But, the price fluctuation in the market works the same as any other stock.
Cryptocurrency markets have become known for having high rewards. But, that’s mostly because they are high risk. If you have money to spend, investing in cryptocurrencies like Bitcoin or investing in blockchain stock can make you very successful. These are the buzzwords of the future when it comes to the stock market and the financial units we use to make investments.
Undoubtedly, as technology continues to shift, movies made in the future will reflect how things like cryptocurrency has changed the shape of the stock market forever. Learning as much as you can about these changes can make it easier to understand the differences between fantasy and finances.
How Accurate Are Film Depictions of the Stock Market?
Many times, the stock market is portrayed on film as something sinister and greedy. Other times, it’s portrayed as comical. Some movies even make a mockery of Wall Street, promoting scripts that talk about scandal and switching places with the rich and famous.
The stock market can be confusing for people who aren’t actively invested in it. But movies that take bits and pieces of Wall Street to develop a more interesting plot are usually very popular with audiences, whether they have an interest in the market or not.
So, what are some of the best films about stock trading? And how accurate are they?
The Wolf of Wall Street
2013’s “The Wolf of Wall Street,” told the story of Jordan Belfort — a real stockbroker who became involved in corruption and crime. Belfort initially takes a small role at a brokerage firm selling penny stocks, where he quickly realizes he has a knack for getting people to invest. It doesn’t take long for him to branch out and create his own firm with a band of other brokers. He becomes exceedingly rich quickly by defrauding investors. Though his life seems glamorous and almost untouchable at times, eventually the FBI closes in on Belfort’s corruption.
While the filmmakers take some liberties with small details, the broad strokes of the story presented here are true. There is a long history of criminals attempting to con stock market investors, and Belfort’s demise is an unfortunately common story.
“Wall Street” has many realistic undertones, especially for the era. Charlie Sheen’s character, Bud Fox, starts out working for a brokerage firm, but he wants to get rich quick. It doesn’t take long for an investment tycoon takes him under his wing and show him some of the “rule bending” that takes place in the stock market. By the end, Fox isn’t exactly a billionaire; in fact, he’s more interested in bargaining for a lighter sentence for his fraudulent actions.
There’s a lot to take away from this story. Since this movie came out in the 1980s, the public has seen plenty of corruption and problems in the world of Wall Street. Director Oliver Stone spoke about his inspiration for the film, stating that, “‘Wall Street’ started when I was researching ‘Scarface’ in Miami in 1980 and running into this phenomenon of the ‘get rich quick’ schemes.” Bud Fox’s story was a reality for many misguided workers and investors in the ‘80s.
The Big Short
The Great Recession in 2008 was the result of deregulation within the financial industry. 2015’s “The Big Short” depicted this financial crisis and how the housing bubble triggered it. The film may be one of the most complex financial movies ever made, and it requires a lot of explanation.
However, the film presents a solidly researched depiction of the situation. There is a lot of great financial knowledge in the film itself — as well as a lot of cameos by A-list actors! For those looking to understand the causes of the Great Recession, this film is a great primer and a dramatic (and oddly humorous) take on events from the not-too-distant past.
If you’re looking for a more comical look at Wall Street, 1983’s “Trading Places” with Eddie Murphy and Dan Aykroyd. It’s the story of a successful executive and a hustler down on his luck who essentially switch lives, thanks to the executive getting falsely framed by his employers.
It’s a movie centered more on the comedic talent of its two major stars, rather than a plot that centers accurately around Wall Street, but it’s a light-hearted take on the stock market that remains a cult classic to this day.
The Hollywood Touch
The stock market will likely continue to be a popular subject for films in the future. Thanks to new technology and an ever-growing interest in investing, filmmakers are sure to find new ways to make Wall Street entertaining to the masses. In the meantime, you can enjoy some of these classic films about stock trading and learn a little bit more about what’s going down each day on Wall Street.
Image Source: Unsplash