GREED IS GOOD!- or is it??
Posted on | July 19, 2010 | 3 Comments
The above is a very popular Wall Street motto. Personally I came to hear of this phrase through Gekko (for those that do not know of this character, he is basically the personification of corporate greed; the doing what you have to do to maximize your profits even if it means stabbing your friends family and anyone around you in the chest)
Let us look into this for phrase that most money people live by. Greed is good- for whom?
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Truth be told, i have always been fascinated by the Wall Street crowd, they seem so much more intelligent than the rest of us, they seem to have a very impressive work ethic (ever heard of wall street closing for any public holiday?) and most of these people are educated in some of the best universities in the world. Finally most, no all are the chest thumping testosterone filled males that most of us dream of being. I read through the book Liar’s Poker by Michael Lewis (and did a review). The book really brought the life of a stock broker to life. I mean these guys are so driven to make as much money as they possibly can within the shortest time possible. And therein lies the application of this wildly popular phrase -greed is good. It is good for the individual and everyone else can pretty much go to hell.
I stock broker is one that has no loyalty to you the customer or any other investment firm apart from the firm he works in and ultimately his end year bonus. He will sell you an investment, be it a stock, bond, warrant that is so toxic that he even winces every time he thinks of it. At that time he will praise it telling you and several other potential buyers that this is the best deal that he has ever seen. The stock broker will use his (normally very high) intelligence and pick the most ignorant and greedy-for-quick-profits customers so as to pitch the investment to. Reason being if he does a very good job of exciting you, then you will not even bother to analyze the financial documents and all other factors before investing your money. He will do this because the more investments he sells for his firm, the higher the bonus will be. Granted he might lose some sleep but that check at the end of the year will justify all the wrong he has done; at least in his eyes anyways.
Security analysis and the intelligent investor both warn against trusting the advice that investment firms give to their customers. This is because they will give you information that is biased to suite the securities that they are selling. After you see that such and such a stock is good, you will call up the firm that gave you that info and buy through them. This will mean that they can subtly modify things to lead you to them. Anything for a bigger bonus.
PS; want to know what these guys do with the gargantuan bonuses. Watch this interesting documentary on the lifestyles of the wall street brokers. Ask any of these brokers if greed is good and do a poll on what they say.
In my opinion, the best thing that you can do for yourself and avoid your ignorance and greed being exploited by anyone is to be as well informed about whatever you want to invest in as possible. Another thing that you have to do is control that greed that you may have for short term profits. This is because if you are greedy, you will end up doing something stupid because you will be clouded with thoughts of early retirement or making it big.
The bible also warns us against these two vices. Case and point 1 timothy 6:11 but you man of God flee these things(love of money) and pursue righteousness, faith, love and piece. Another bible verse that helps you combat the vice that is ignorance is proverbs 13:18 he who ignores discipline(as in not being able to control yourself) will come to poverty and shame but whoever heeds correction is honored. This is very true in investing in the financial markets. If you cannot control yourself, the bloodthirsty money men will be able to smell this from a mile off and will fleece you out of house and home with absolutely no remorse.
Finally, I would like to put forward my thoughts on this that greed is only good for the money or success hungry and will generally lead to a lot of people that are not this “ambitious” into a lot of trouble.
I have never ever met a Christian wall street money man. If I do, I think you guys will be the first to know, followed by some kind of book 
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3 Responses to “GREED IS GOOD!- or is it??”
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July 20th, 2010 @ 2:14 am
Greed is good to a point.
The point at which it hurts other, then greed isn’t good, but if you are an individual that enjoys hurting other, then you have other issues…
The first I heard the saying “Greed is Good” was by Adam Smith. Used in his context, it means try to get rich, via capitalism. By trying to get rich, you are capable of advancing society as a whole. Basically, it’s motivation… Most of the greatest modern inventions have been created by capitalistic societies.
Good though provoking article, I’ll have to re-read “Democracy in America” or whichever book Adam Smith referenced “Greed is good”…
July 20th, 2010 @ 5:41 am
but my point is that the vice is good for only those that profit from it like the capitalists. Capitalism would work if the capitalists were not greedy. The people that say that greed is good are the ones quick to buy g5 airplanes with their bonuses instead of helping the society. That is something that they did not think of when instituting capitalism; the flawed human nature and the selfish desire to hoard things for yourselves instead of giving them out to people.
July 26th, 2010 @ 12:32 pm
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