The Big Short

The $3.9-billion argument for soft, believable persuasion

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Michael Burry, the first guy to figure out how to make money from the subprime mortgage crisis, lost out in a way.

Burry saw the crisis coming. He realized he could make money from it by buying something called a credit default swap. This would pay out big time once crappy mortgage bonds failed.

Burry ran a hedge fund. He invested much of the money in his control in these credit default swaps. But this was a massive opportunity. Burry wanted to invest more. So he tried to raise money for a new fund, which would buy more credit default swaps.

Trouble was, Burry was an awkward guy, and not great at persuading. He shocked people with his predictions of catastrophe. Nobody gave him more money to invest.

Fast forward nine months. Burry’s ideas had spread around the industry. So another investor, John Paulson, attempted the exact same thing Burry had tried to do. From The Big Short:

“Paulson succeeded, by presenting it to investors not as a catastrophe almost certain to happen but as a cheap hedge against the remote possibility of catastrophe.”

This brings up a fundamental rule of persuasion. It’s perhaps the most important rule of them all:

Only tell people something that they are ready to accept.

In some situations, this can mean you don’t start with your biggest promise, your strongest proof, or your most shocking prediction. In the words of Gene Schwartz, the best thinker on this topic:

“The effectiveness of your headline is as much determined by the willingness of your audience to believe what it says, as it is by the promises it makes.”

So did Michael Burry lose out? Depends on your perspective. When it was time to cash in, Burry walked away with an estimated $100 million. John Paulson? $4 billion.

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Nauseating copy editing tricks from an acclaimed Hollywood movie

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Several minutes ago, I finished watching The Big Short. It was nauseating.

The movie is so jerky and fast that I felt like I was riding in a speeding truck on an unpaved mountain road.

For example, in one scene, two characters are in a restaurant. One character is explaining something technical about mortgages.

In the space of about 10 seconds, you can experience: 23 editing cuts… a significant amount of fast-paced dialogue… a laugh track which doesn’t seem to relate to the dialogue… Sweet Child O’ Mine, playing at increasing volume over the dialogue and the laugh track. And this is all shot on handheld camera, to add a documentary, vomit-inducing feel.

This reminded me of a sales letter lead I dissected last autumn.

The sales letter was the Fat Burning Furnace, which I believe was a big Clickbank hit a while back.

The Fat Burning Furnace lead was as fast-paced as that scene from The Big Short:

In about 20 seconds, there were probably a dozen ideas, all of which were disjointed and seemingly spliced together. The lead jumped from claim to secret to promise to objection to problem to identification and then back again.

It didn’t make sense to me. This is not how people talk.

But that’s what people respond to. People watched The Big Short, and they loved it. And they consumed the Fat Burning Furnace VSL, and they paid for the product.

So if you catch yourself writing conversational, smooth-flowing copy, it might be time to make some quick cuts and edits. Keep your prospect’s logical brain reeling, while his lizard brain starts licking its chops. Do this right, and maybe you’ll credit default swap your own way into a million-dollar payday.