During their recent episode of the VALUE: After Hours Podcast, Taylor, Brewster, and Carlisle discussed The Big Con. Here’s an excerpt from the episode:
Tobias: I might punt a little bit on Edward. We can talk about Edward in a moment. But your pitch reminded me about a book that I read called the Big Con, which is interesting. There was this period of time about 100 years ago, where there were these– So you know, the movie, The Sting, is about the big con, where basically there were different variations of it, the Wire, the Rag, and the idea was basically there were established stores, like it was literally a physical location. And there would be actors in this physical location. This is what their job was. They did this all day long. And so, the roper, so that would be– I might be traveling around on a train, sitting in first class, and I might talk to the gentleman beside me and he’s like, “I’ve got this great deal. I’ve got this great stock deal,” or, “I’ve got this great scam.”
Basically, the idea was, you would be pitched this idea that was basically a way to scam somebody else. And so, if that attracted you, if the idea of scamming another person was appealing to you, then you would come into this that– you were talking to the roper and then he would take you to the store. At the store, you’d be taken for what you had. But the whole time, you thought that you were in on the scam. That’s how they got you. That’s where that expression, “You can’t scam an honest man comes from,” like you have to be– sorry. Yeah, just got a little freeze at this.
There’s some that a gambling based, there’s some that the stock-based one. I think the stock based one, I’m going to confuse this a little bit because I read this book a little while ago, but the wire or the rag, I think it’s the Wire. So, basically, the Roper brings you into the brokerage, which is not a real brokerage. It’s entirely– and this is there all the time scamming people, so it’s like mahogany, and there are people running around and like suspenders and writing stuff on chalkboards and doing things like that.
They take you into the office, and they sit you down with the inside man. inside man is there all the time. This is what he does day in, day out. So, he’s very good at this. And he will say, “I’ve got this information that there’s going to be this play in this– there’s a pool being put together to manipulate this particular stock. And basically, I can’t participate because I’m connected. We’re going to need a front man, and it’s going to be you, you have to bring us some money.”
They would send them home to get money, then they’d come back with their 50 grand, which you could probably 10X it for 20 to 50 grand, 10X it for today. They’d come back, bring their money in. And somehow, these guys would take it from them. But then, there would be– you had to do these various different little tricks. So, the guy would lose all his money, because something would go wrong. And then, they’d say like that they offer him a way to get his money back. And some of these guys would come back over and over again–
Jake: More money.
Tobias: –not realizing that it was a scam. But then, if they figured out what was happening, there’d be some– The roper would accuse the inside man and the inside man would then do something pull out a gun and shoot the roper, and the roper would have a chicken bladder filled with blood in his mouth, bite down. So, all the blood would come out.
Jake: Have you not seen The Sting, Bill?
Tobias: It’s very similar story to this day.
Jake: Oh, it’s a great movie, you’ve got to watch that. It’s so good.
Tobias: And so basically, the guy would think that he’s like now in– that the inside man would run with the mark, and they’d go to a hotel and now looks like we’re all going to go down for–
Bill: Oh, now he’s a fugitive?
Tobias: Yeah, now we’re all going down for attempted murder.
Jake: But he’s like, “You can’t go anywhere. You can’t go the police because now you’re caught up in all this stuff. You just have to completely walk away.”
Bill: That sucks. That would be a bad day.
Tobias: But then, they push the guy out and they tell, “Well, you’re going to meet me and you go to Chicago, and I’ll be in Chicago in two weeks.” And the guy just never turns up. But eventually you figure out you got scammed, but you’d be so embarrassed by the way that happened, you wouldn’t tell anybody. Or you’d think that you were implicated in a murder, and you wouldn’t want to tell anybody about it. So, you just get home. Nobody would ever tell anybody about it. That’s how they’re able to keep on going.
Jake: In The Sting, it was a horse racing operation with front running information, but, yes.
Tobias: That’s one of the classic examples of it. There are three. I just forget what the names of them. The rag and the wire. One is the stock market version of the horse racing one.
Bill: That’s interesting.
Tobias: I think it’s fascinating.
Bill: I would be no good at that.
Jake: [unintelligible [00:28:33] you’re going to be– [chuckles]
Bill: I know, I don’t think I’d be a good scammer. I can barely look at these freaking comments without cracking up. I just don’t have a good poker face. So, if I was playing fake shot or something like that, I wouldn’t be any good at that.
Tobias: If you weren’t any good at the scam, you’re the roper. You just travel around and you look for traveling salesmen. You just pitch them the story all the time. And you find someone who bites, and if the guy bites and you just take him and introduce him to the inside man, basically your job is done at that point. The inside man takes the money and gives you a cut of it.
Jake: This mustache is my Paul Newman Sting mustache.
Tobias: Yeah. That’s a great mustache.
Jake: [laughs] Probably won’t be here next week.
Tobias: Oh, really?
Jake: I’m getting a little over it.
Tobias: What a shame.
Bill: I’m not going to miss it. I’m not going to lie. I mean I respect it. I mostly respect it because I can’t grow one. Looking at the two of you just makes me feel really emasculated.
Jake: Oh, come on now. I can tell yours would be better than what I– [crosstalk]
Bill: I assure you I will grow this thing out for three weeks and you will be looking at like a 15-year-old boy. It is disgusting. It’s patchy, and it’s long, and it’s gross.
Tobias: I think the interesting thing about the Big Con is that I see versions of it in the stock market all the time. I think Nikola is an example of the Big Con. Any entrepreneurial effort where they don’t yet have the prototype or whatever built, they’re still value hacking as they call it, trying to figure out how they’re going to make money.
Jake: Value hacking.
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