GameStop Is Just the Beginning...
In today’s age of individualized entertainment and curated content, the likelihood of something becoming a monoculture moment are few and far between. The series finale of ‘Game of Thrones’ was probably the last time a significant part the world’s population sat down for a collective shared experience. With so many lives going in so many directions, it was increasingly impossible for a singular occurrence to capture the attention of an entire nation. COVID19 has served as something of a course-correction for that. Everything from the murder of George Floyd to the Capitol Building insurrection -- 2020 was earmarked by those which captured our attention and inspired many into action. And while the COVID vaccine has finally begun to help usher in whatever version our new normal will assume, the early months of 2021 have most certainly demonstrated that we are still very far from being immune. And perhaps the most dangerous aspect of this newly realized reality, is what the success of the GameStop stunt reveals about the threshold and tipping point of our collective turmoil.
Financial Illiteracy Is an Issue
Like many of you, my initial take-away from the GameStop fiasco was one of trending-on-twitter entertainment. I’ve always been more of a “Motley Fool” consumer, so while I had maybe heard of r/WallStreetBets in passing, I never really paid it much attention. And as is always the case when there is an all-encompassing culturalal phenomenon such as this, there were a lot of really great insights, think pieces, memes and take-aways that were readily available to provide context to the gluttonous consumption.
But one eye-opening level of realization that kept being echoed through every thought-piece I read, was just how many people in America did not have even a weekly-watcher-of-‘Billions’ level of financial literacy.
From The Ringer to The Washington Post, it seemed as though the editor at every outlet was requiring their writers to include a sidebar to their articles explaining everything from what a stock is, to what a hedge fund does. The explanation was so dumbed-down, I really began to wonder if the uninitiated may truly believe the stock market is based on nothing more than the emotional index of how a few thousand people on Wall Street are feeling on any given day.
But then again, if those real-world valuations can literally be undone by a few thousand people in an online forum who are sharing memes of chicken nuggets and collegially referring to their day-trade earnings as “tendies,” then perhaps our economy is much more in-line with that misinformed outlook than any of us would really prefer to believe.
From a protective strategy vantage point, this fiasco has shined a very bright light into a very dark corner on just how complacent so many of our safeguards really are -- not the least of which is the underpinnings of our confidence in what financial futures may hold.
Which of course makes me wonder if this was perhaps less of a fiasco and more of a shock as to why the hell this had not happened before? After all, when you create a game, a game has winners, and the game has losers. The only significant change-up in this particular scenario was that the traditional losers became winners. Just like Rocky knocking out Apollo Creed in the first movie ... he was not supposed to win. Not in a million years. But then he did ... and it turned out his story was just getting started.
Now, my personal opinion is that this only became a big deal simply because the script got flipped. And like the Rocky story, the underdog won. Except in this instance, it wasn’t so much about an amateur fighter and a world-champ boxer trading punches in a ring, but rather scrappy low-stake day-traders going up against the billion-dollar hedge funds of Wall Street.
And it was such an unprecedented move by the little guys, that the big boys never saw it coming. Smaller traders pooled their resources together (which is exactly what the largest traders also do) and they influenced the outcome of a market valuation to their own advantage.
Now, were these Redditors market disruptors? Yes they were. Was there collusion? Of course there was.Did anyone really think they’d be able to pull it off? Of course not.And is what they did illegal? Turns out, the answer is “no.”
They simply saw a vulnerability they could exploit, and then took advantage of the fact that no one would even notice until it was too late for them to be stopped.
Yet, great as it was these modern-day Robin Hoods were able to “steal from the rich and give back to the poor” -- and the irony cannot be underscored enough that the platform they used to initiate this endeavor was a stock-trading app of the very same name -- there are some much bigger concerns to consider. The least of these is an undeniable decay of trust, a key fundamental of our financial systems.
Truth is, this “money” thing only works because we all adhere to a social contract — an overarching collective agreement. We only believe that a dollar bill is worth one-hundred cents because we have agreed that on that understanding as a rule. Otherwise, it’s just a piece of paper, and not worth the money it is printed on.
And who’s to say that the next time a group of people get overly emotional about something they believe should be saved, they don’t inflate the valuation of a more stable commodity like aluminum or copper or zinc (the three primary commodities by which many of our communications rely)?
Or ... what if something happens like “The Big Short” movie warned us about? Our national security could very easily be put at risk if a bunch Russian trolls (who are already in the Reddit-sphere) begin to -- in a very slow, methodical, and QAnon-type fashion -- convince everyone to start messing with the one necessity we all can’t live without: water.
The Outsiders’ Perspective
The most important protective take-away from all of this, is that whenever you do decide to do your own audit, or conduct your own risk assessment – whether it’s of your home, your school, or your workplace, or even just taking stock of your own life, keep this in mind:
It doesn’t matter if you are red-teaming your organization for penetration testing or triaging your risk of being exploited by a social engineering concern, or even if you are just doing a table-top of a crisis management scenario with the usual suspects who most commonly serve as the decision makers for your team, it’s absolutely essential that you always bring on board at least one outsider into the fold.
Bring in someone with soft eyes and an unbiased world view. Find someone who does not see what you see: who doesn’t understand the culture, the ethos, the nuance and the norms of your organization. Identify someone who isn’t afraid to ask the questions that no one else ever thought to ask; who isn’t afraid to bring up some inherent vulnerability that may have previously gone unseen but, once realized, is too big to be ignored. This is particularly hard for leaders and executives to do. They often want to surround themselves with those who think like they do, providing them the assurance that they know all that they need to know to prevent risk or disaster. But the reality is, that desire to stake confidence in confirmation bias is ultimately something that leads to the delta between policy and practice growing into a deeper and wider divide.
Valuation vs. Emotion
Speaking of policy vs. practice, one of the most glaring realities brought to the forefront of concern during all of this was how many stock market rules are nothing more than “understood.” They are simply the agreed upon norms adhered to by those who live and work in a very finance-centric culture. Two months ago, no one would ever imagine someone making an investment on a stock based purely on emotion because it was believed to be understood that smart money would only be based on an expectation of legitimate valuation. But then someone did ... and they convinced their friends to do the same. From there, the social media phenomenon of FOMO took hold and it changed market susceptibility forever.
And from that day forward, getting ‘GameStopped’ will reverberate through every business class taught and every economics lecture ever told.
Don’t Get So Caught Up In The Improbable That You Lose Sight Of The Possible
This is not a one off. This will happen again. I don’t know if it will be with the stock market, or whether it will be with some other social enterprise, but rest assured, this is neither improbable nor impossible. In fact, it has now become likely. The precedent has been set – the fire lit.
There are a lot of smart, frustrated, emotionally fragile, and economically disenfranchised people out there who are struggling every day to survive. If their survival means exploiting your vulnerabilities to help them get through another day, they are going to do it. And if they can game a system by circumventing the rule book, they’ll call on their friends to help make it happen.
Too many people watched what happened with GameStop and saw the little guy getting what they felt was their due. Their stories are out there. They are real. They are emotionally resonant. They are relatable. They are damned impactful.
Some people got in early and got out quick and well-off enough to pay for their medical bills, afford that month’s prescriptions cost, or to afford that surgery their pet needed. Others were just happy to pay down their debt. These people weren’t running out and buying yachts or million-dollar mansions. Not in the slightest. They were just happy to be getting by ... able to survive another day.
The economic disparity in this country is real and over the past year it has only gotten worse, much worse.
The pandemic has devastated the lives and livelihoods of too many of our brothers and sisters -- our fellow Americans -- and it doesn’t matter how good of a neighbor you are, or how nice of a friend you have been, or how fair of an employer you believe yourself to be.
We each have our own tipping point – a threshold that, once breached makes each of us more likely to take risks we wouldn’t have in the past. And once a breach has occurred, it cannot be undone. After almost a year of feeling abandoned, betrayed, and undervalued, do not be surprised by the fact that there is a groundswell of people who are now willing to – and will do – what we would all do if we were in their very same shoes.
FALSE EQUIVALENCE
One of the more common responses I hear when I make security enhancement recommendations to clients — especially to public figures and public-facing clients — is their tendency to benchmark their risk as compared to the risks of others on a higher rung of hierarchy. Stars of television and movies will admit they are famous but will counter that they aren’t a world-wide phenomenon. Business magnates may mention their mansions on both coasts but will downplay their wealth by bemoaning their absence from the Forbes 400 list. However, my clients who are famous and wealthy are not the only ones who cling to this safety trap of false equivalence.
When we are evaluating our risks, we have a tendency to compare our own situation to that of other people in our social orbit. If we have a nice house, but we don’t have the nicest house on the street, we may incorrectly predict our risk to be lower than that of our neighbor. If we have a nice car, but our neighbor has a nicer car, we may falsely believe that their car is much more likely to be targeted for theft than our own. But in almost every circumstance, we would be wrong. When it comes to being targeted for a crime, what we think has nothing to do with it. What matters most is the perception of what other people believe to be true. It doesn’t matter how wealthy you are, what matters is how wealthy others believe you to be. Moreover, the very fact that you aren’t in the fanciest house or the fanciest car suggests to those who wish to do harm that you may be the easier, more successful target.
In today’s world, where our everyday risks are on the rise, now, more than ever, is not the time to fall into the safety trap of false equivalence. Do not allow yourself to think for even a second that you are not at risk because someone else simply has more. Because if you have something that someone else wants, and they think that they can take it, well then guess what? You’re at risk. If you are the easier target, you are a better target and are at greater risk than someone who just has more: more money, more security, more … anything.
As the Billy Joel song warned, “We didn’t start the fire,” but that doesn’t mean we won’t get burned. So look out for yourselves accordingly.
Onward. Upward.
—Spencer Coursen
