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An Emotional Investing Lesson from the TV Show 'Billions'

Should you invest with your heart or your head?

by Anita Hamilton
Apr 16 2018, 5:13pm

Photo courtesy of Showtime

As a rule, if you want smart investing advice, don’t turn on your TV. In fact, you’d be better off putting money in a boring index fund and hiking the Appalachian trail for a few months than following Jim Cramer’s Mad Money stock tips.

But every once in a while, a kernel of personal financial wisdom emerges from the most unlikely TV dramas. The latest episode of Billions, the Showtime series starring former Homeland star Damian Lewis and Emmy winner Paul Giametti, has one of them. Now in its third season, Billions focuses on the shady business practices of a fictional hedge fund company called Axe Capital and its founder Bobby Axelrod, played by Lewis.

Damian Lewis plays the beleaguered hedge fund titan Bobby Axelrod, in Billions. Photo courtesy of Showtime.

When Axelrod gets sidelined from running his business, his genius intern-turned-chief-investment-officer Taylor Mason, played by Asia Kate Dillon, takes the helm. Mason, a gender non-binary character who uses the pronouns they and them, quickly and adeptly assumes their new leadership role. But Mason’s greatest skill may be the ability to make decisions without letting emotions cloud their judgment—one of the cardinal rules of investing.

(Spoiler alert!) This plays out most vividly in “Hell of a Ride,” the fourth episode of Season 3 that aired April 15, when Mason bets against a private space travel company called Farpoint, modeled after Elon Musk’s real-life SpaceX, which is attempting to send a rocket to the international space station—and eventually to Mars. Under Mason's direction, Axe Capital has shorted Farpoint stock, which means it will only make money if the launch fails.

The twist here is that unlike Musk, the CEO of the fictitious company is actually on the rocket that Mason is betting will never get past liftoff. In a pivotal scene preceding the launch, Mafee, a trader at Axe Capital, says to Mason, “I’ll be honest. I’m rooting for him to get there.” Mason replies, “I am too. My bet is against his business model, not his vision,” before raising their pullover to show Mafee the Farpoint t-shirt they’re wearing underneath.

Asia Kate Dillon (seated) and Damian Lewis have a talk in Billions.

On the day of the launch, Mason’s eyes light up when it looks like the rocket will actually make it to the international space station after three previous failed attempts. But when the rocket explodes in flames just seconds after lift off—much like the real life SpaceX Falcon 9 did in 2015—the devastation in Mason’s eyes is palpable, even as another trader yells in glee, “Farpoint is gonna tank! It’s payday on that beautiful short.”

It’s an unforgettable scene with an essential lesson for novice investors and pros alike.

It's normal to be emotional about money—but it can cost you

Making and losing money are emotional experiences. As the third richest person in the world, investor Warren Buffett, famously advised, "be fearful when others are greedy, and be greedy when others are fearful."

But making investment choices based on unexamined emotions can increase your chances of losing money. “There is nothing necessarily wrong with making decisions for expressive and emotional reasons," Meir Statman wrote in the Wall Street Journal. "The key is to be aware of them and to acknowledge that they carry a price—very often, a substantial one—in the form of higher costs or lower returns.”

In Billions, Mason was able to separate her personal desire for the space startup to have a successful launch from the statistical chances that it would. And while the other traders raised their arms in celebration at the hedge fund’s profitable bet against the launch, there wasn’t even a glimmer of joy in Mason’s eyes. Sometimes winning has its price too.

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