Whose Rules?

Board games seem to be making a bit of a come back during our lockdowns. Has your family enjoyed more game time together over the past year? Are there any new ones you’re learning? Are there any classics you’ve re-embraced?

Monopoly is a classic that has been enjoyed in our home over the years. We’re tempted to believe that a monopoly is a good thing. We want to own all the properties on a road in order to build houses and hotels. Focusing on an area in order to gain control so that we can extort, exploit, or extract as much as we can from waylaid visitors is the principal purpose of the game. Our ability to “get ahead” depends on controlling property that generates more income than the property that we visit. We welcome travellers but don’t want to be welcomed by others. We win when others lose. You win Monopoly when you control enough of the board such that no one has any resources left to move. They’ve had to either sell everything they have to you or to the bank and are left with nothing. Sure, it’s fun for the winner, less so for the rest.

What if we changed the objective of the game? For example, what if we played Monopoly with the objective of not declaring a winner but seeing what we could do to sustain the game? How would our strategy change if the purpose of playing was to keep playing? We’re no longer competitors looking to crush each other. Instead players willingly work together. Resources aren’t to be held tight. There’s no pleasure in taking advantage of a struggling player. There’s no pleasure seeing your pile of paper money rise up at the expense of others. Would our view of ownership change? Are we still trying to purchase properties or are we happily travelling around the board not buying anything? If we don’t own it, who does? What if we own it, but work out a fair and balanced rent with other owners with which we’re playing?

I imagine we’d find all kinds of problems that would result from our different objective. For example, what happens if no one purchases anything and just keeps collecting $200 each time they pass go? How long until the bank busts?  However, the point remains that the original outcome of the game has a significant factor in how we govern ourselves when playing. If we zoom out to our own lives, are there aspects that we’re living following someone else’s defined direction? Are there things we’re doing just because we think this is the way things are supposed to be? Are we letting ourselves be pulled along in a game where someone else has defined who will be winners and losers?

Fashion, for example, doesn’t spontaneously surface from a series of individual decisions. It typically follows an effort by a business to introduce something which they can then sell further. They start by having a style showcased by a star. They limit availability of the new item while displaying the lucky few whom look stunning in it as often as possible. Desire develops and, conveniently, the supply appears to quench the newfound thirst. We believe we’re making conscious choices to lead a trend or to fit in, whereas we’re really being nudged along by someone with interests that may well be different than ours.

Fashion is a factor not just in clothes, but in fitness, finances, food, and more. It’s relevant to business strategy, marketing efforts, compensation packages, technology adoption, and more. What’s popular isn’t set in stone and is not exclusively up to individual choices. Influencers set the stage. Whose rules are we playing by? Are we checking in and consciously deciding what game we want to play?

A public company that trades on one of the US stock exchanges that has struggled in recent years is GameStop. It has recently jumped into the news.  It’s retail approach to selling video games has been questioned as online gaming has picked up. This concern accelerated in 2020 during COVID lockdowns. When investors are doubtful about a stock’s future they may be able to bet against it. This is done through short selling. It’s a mechanism that allows one to borrow the stock based on today’s price with a commitment to buy it back in the future. The short investor is betting that they will be able to buy the stock in the future to pay back their borrowed supply at a much lower price. The difference between today’s price and when the short investor chooses to purchase would be their profit. Things can get ugly for short sellers in a hurry. If the stock they are betting against continues to rise, they could be on the hook for losses far in excess of their investment. It’s a risky bet best left to experts. Some Hedge funds exist to serve this function in the market. They are well capitalized and content being contrarian. They’re comfortable betting against positive trends. Apparently, several Hedge funds had significant short positions in GameStop.

Not everyone shared the sentiment that GameStop was a dying enterprise. A forum of small investors didn’t like being at the mercy of big investment firms betting against a stock in which they believe. Forum participants seem to be communicating and driving interest in GameStop. The stock has moved 15x in the first month of 2021. From a start of around $20/share, it broached $300/share on January 27th. Needless to say, the big Hedge funds aren’t happy. They are on the hook to lose massive amounts, billions, as a result of this wild swing. As a result, several are crying foul. Complaints about rules being broken surface. Who knows where this story goes? Regardless of the outcome, it offers a great example of a group taking action to not accept the rules as dictated by other parties. The big hedge funds thought they understood the rules and the power the size of their investments had. However, a group of independent individuals appear able to choose to not cede control and craft their own rules.

In a blog post, Seth Godin introduces the idea of “The Coordinators.” Godin observes that many industries have coordinators or gatekeepers that determine what is allowed and what isn’t. They influence a direction far more than a series of individual decisions. He prompts us to consider, “How does the coordinator decide? Are they working in your best interests? Are they erratic, self-deceiving, elusive, selfish, or perhaps a long-term thinker? Do they have a bias toward reality and resilience or is it simply a hustle? “

In the world of finance, the general rule has always been “he with the gold writes the rules.” The devils with deep pockets call the shots. In our GameStop situation, hedge funds thought they held the cards, until they didn’t.

Godin leaves us with a question worth considering, “Who decides today what’s going to be important tomorrow?”

It’s a great question. If it’s not you, then who? Shouldn’t it be you? Who are the coordinators in your industry? What are the rules of your industry?  In our workday, whose rules are we following? Do they make sense? Are they making us better? Perhaps it’s time to check in and see if there’s a new way to play Monopoly in your day?