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The VIX According to a 20-Year-Old 'Seinfeld' Episode


The foreshadowing from Cosmo Kramer and George Costanza is uncanny.

MINYANVILLE ORIGINAL A long time ago before the age of Twitter, the blogosphere, message boards, or even the widely watched VIX Index (^VIX), a 1990 episode of Seinfeld titled, The Stock Tip accurately captured today's investment climate with a clever portrayal of market sentiment. As was typically the case, the story gets set inside Monk's café with the usual threesome, Jerry, George, and Elaine discussing nonsense. George picks up a newspaper to check the business section and discovers that the stock his buddy keeps telling him about is on the rise yet again. The scene, written by Larry David and Jerry Seinfeld, is paraphrased below:

GEORGE: Did you ever meet my friend, Simons? He knows this guy, Wilkinson. He made a fortune in the stock market. Now he's got some new thing -- you know, there's supposed to be a big merger. He wasn't even supposed to say anything. You guys should think about doing this too.

JERRY: How high's it suppose to go?

GEORGE: I don't know. But Simons said that if I wanted to get involved, that Wilkinson would tell me the exact right minute to sell. You wanna do it?

JERRY: Boy... I don't know. What kind of company is it?

GEORGE: It's Sendrax. They've got some new kind of technique for televising opera. Some sort of electronic thingy.
Costanza represents the perma bull cheerleaders who are often paraded on financial TV and in the media. His buddy Simons represents the Wall Street sellside and Wilkinson is the buyside. Jerry represents the unsophisticated retail investor who is often convinced to speculate unwittingly just because someone who is perceived to know what they are talking about deems the investment to be a good idea. He can't resist missing out on the opportunity to make an easy, quick buck. The story picks back up at Seinfeld's apartment where Kramer the skeptical perma bear enters the scene.

JERRY: Is that my paper?

KRAMER: Bad news, my friend.

JERRY: What? What news?

KRAMER: Sendrax.

JERRY: Oh, c'mon! It's down again?!

KRAMER: Two and a half points.

JERRY: Oh, I can't believe it. Let me see that. (Looks at the paper) That's four and a half points in three days! That's almost half my money!

KRAMER: Hey, I told ya.

JERRY: (Sarcastic) Yeah, you told me.

KRAMER: It's all manipulated with junk bonds. You can't win.

JERRY: There's one thing I don't understand. Why does it please you?

KRAMER: Hey, I don't care. I'm just telling you to (yelling) get rid of that stock, now!

The market volatility is too intense for the highly emotional Seinfeld to stomach. With the perma bear Kramer pestering him with hindsight and conspiracy theories Seinfeld succumbs to the pressure, capitulates, and pukes the stock. The reluctant perma bull Costanza hangs on for the ride.

JERRY: Well, that's it. Look, I'm going to Vermont. I don't want to think about this. I'm selling.

GEORGE: I'm keeping it. I'm going down with the ship.

Of course the stock rallies back and Seinfeld expresses his seller's remorse and frustration at getting flushed later telling his girlfriend…

JERRY: Look, Vanessa, of course the market fluctuates. Everybody knows that. I just got fluctuated out of four thousand dollars!

At some later date back at the coffee shop George is seen with cigar in hand confidently gloating. With his newfound wealth he has picked up the tab and is reveling in his investment prowess.

JERRY: So, Big daddy. I'm just curious. How much did you clear on your little transaction there? All told?

GEORGE: I don't like to discuss figures.

JERRY: How much?

GEORGE: I don't know, what? Eight thousand. It's a Hyundai. Get out of here.... I told you not to sell. Simons made money, Wilkinson cleaned up.

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