Thursday (2/6/3) on IDS, Gladiator opened the afternoon session with some beautiful prose, including some thoughts on greed. Therein ensued a discussion of the evil of greed; wherein I stated that "greed is good" when it is refined by the maturation process. My impression is that few Stoolies liked this later remark. Furthermore, it was implied that one's failure to "see" greed in one's self is synonamous with gambling. I feel it is quite important for internet traders to reconcile the issue of "greed" with their personal investing views or compulsions or obsessions (it runs the gamut on this site, as it does elsewhere in life).

Greed is basic: how many investors, over the eons, have said that markets are ruled by greed and fear? If you believe in Fear, you have to believe in Greed. Just as Fear is controlled by maturity (are you still afraid when your mommy leaves the house?), so is Greed (do you still scream or throw tantrums because you can't suck on your mommy's nipple?). I'm sorry, to think you don't have either Fear or Greed in your investing psyche is specious; the extent to which either of these "rule" your investment life is inveresely related to the extent to which you, as an investor, have matured.

I have been a gambler, drinker, etc. and have learned a lot/ thought about a lot in the last 7 years of "sobriety". I am not alone in stating that IF you do this (investing) for fun, and that money is not the issue, then YOU are the gambler (read and answer the questions from Gambler's Annonymous if you have any doubts). In my recovery experiences, I have heard stories which would amaze any Stoolie (the most common one:"I gambled everything I had and then started gambling with things I didn't have. I gambled away my brother's Corvette once", etc.). I'm sure some of you on The Street have seen sides of Greed which I haven't, which may have affected your thinking as well. Everyone comes to the table with different perspectives and experiences.

I do this for the money. Period. I love this website, it is fun and helps me make money. I love Doc's writing's, they're fun and help me make money. There are other things I do in life which are fun also, some of which make me far more money in a month than I make in investing in a year. Perhaps the message I took home best from Glad's writings is that I need to spend more time doing THOSE things, and less of this.

I hope I haven't offended anyone with my personal rants on this subject. Peace and Prosperity, everyone! RB AKA "lOU".

One of the requirements for recovery from ANY compulsion is the ability to be rigorously honest with yourself. If I'm honest with myself, I have to admit that I was straight out gambling two-three years ago--when I was still trying to "daytrade" the markets. I lost my ass, of course. These days, I am not "IN" the markets in any significant way. Some gold mining shares and the occasional "put." The only reasons I still bother are 1) I am stubborn and thus determined to "learn" how to win at this game, and 2) I see understanding how markets work as a life or death endeavor. My monetary/investment decisions at this point will determine my(and my family's) ability to survive the next two decades(and the quality of live while surviving).

As for greed/fear, I agree with you LOU. The extent to which I act out of either of these motives in my trades reflects on the amount of maturing I've done as a trader. I'd say that right now, I'm still sucking my thumb. Maybe by the time the next bull market comes around, I'll be mature. Of course I'll be OLD, as well

The biggest problem with words is that not everyone has the same understanding of their true meaning. So let's start with the definitions:

Greed n. excessive desire for getting or having, esp. wealth; desire for more than one needs or deserves.

Not too bad so far, except for the "excessive" part. An issue I take with the definition itself is on "more than one needs or deserves." That leaves it up to someone's subjective judgement to determine how much one needs or deserves. Maybe I need $10 million dollars in the bank to feel satisfied. Someone gonna tell me I "don't deserve it"?

Now, the term becomes much more negative when it becomes the adjective "greedy":

Greedy adj. 1. wanting or taking all that one can get, with no thought of others' needs [I think we can all agree that's a bad thing]; desiring more than one needs or deserves [back to subjective value judgments] 2. having too strong a desire for food and drink [no relation to trading, but that brings us to:] 3. intensely eager [that sounds like a GOOD trait... hmm]

So, is greed bad? Well, it depends on which definition you choose... and it depends on whether you allow emotion to dictate your actions or not. Which brings us to the next part of the topic...

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A simple principle that's served me well in life: emotions are noise and to a large extent uncontrollable; your actions are the only thing you can control, and thereby your actions are what you should judge yourself (or be judged) upon. If greed (or any) emotion causes you to act in a way that induces suffering upon yourself or others, then yes, it's bad, regardless of what you call it. However, the problem is still your actions, not your feelings. We've all felt like resorting to violence in some situation or other, but whether we chose to act on that emotion or to override it is the real issue.

To the extent that emotion -- instead of principle -- dictates your actions, you will be an unsuccessful person, regardless of what the emotion is, and regardless of what your pursuit is. To relate trading to this, "stop losses" are an example of principle. You honor your stop losses regardless of what you're feeling emotionally. I could go on for hours, but principle vs. emotion is a whole 'nother topic.

And, LoU, as far as trading to make money, I whole-heartedly agree with you: I absolutely trade to make money; and there is simply no OTHER reason to do it besides recreational gambling.

That's my two yen, anyway.

Like I said. It's semantics. To me greed is the unbridled desire to acquire, accumulate, and keep. That is neither positive nor negative. It's just my understanding of greed.

My point is simple. If you are not doing what you do for love, you will never be happy. Trading is gambling. It can be destructive. Or it can be fun, if you love the game, love the study of it, and love the process of learning how to play, and how to win. It is a termendous intellectual and psychological challenge. It's about learning not only about the market but about yourself. In that sense it can be a hugely positive experience.

Those who play just to acquire, and hold on to more and more stuff, are, to me "greedy." They are going to have big problems at some point.

QUOTE (DrStool @ Feb 7 2003, 02:55 PM)

My point is simple. If you are not doing what you do for love, you will never be happy.  Trading  is gambling. It can be destructive.  Or it can be fun, if you love the game, love the study of it, and love the process of learning how to play, and how to win. It is a termendous intellectual and psychological challenge. It's about learning not only about the market but about yourself. In that sense it can be a hugely positive experience.

I would agree with you about enjoying it. I trade to make money, but I also love trading and the study involved with it. Nevertheless, I wouldn't do it "just for fun." At that point, it really does become nothing other than recreational gambling. Slot machines are fun, but I've never made money at them in the long run.

I trade as a way to financial freedom and I have fun doing it. Sometimes I'm very aggressive too, but it's always a calculated risk/reward.

Back to basics - money (for a G8 citizen) is a necessary commodity in this day-and-age that we live in. Without money, few of us could survive.

Let us suppose that humans have a propensity to seek out those experiences that bring pleasure... and avoid those experiences which bring grief.

Could 'Love' be defined as 'an activity which produces feelings of usefulness, or pleasure or satisfaction'?

Money can provide comfort and a sense of security to those who are fearful. Worldly-goods (e.g, latest car, big house) can satisfy a person's need to 'prove their worth'.

The greater the fear, the more the compulsion to accumulate.

We all have fears. We all have desires to be recognised.

Could 'Greed' be defined as 'an over-reaction to feelings of helplessness'?
Whence do those feelings of 'helplessness' stem from - is the real question.

HyperHoper.

In my opinion greed is a sickness if it goes too far. Certainly if you have $100 million and you spend all your time scheming to get more you may have a problem. Most of us will never have to worry about going over the line because we have so far to go. For myself I think I'd lose interest in wealth acquisition if I had $1 million.
It woiuld be fun to test this theory.

Thanks everyone; all the above comments have been great and I appreciate your thoughtfulness. ShitEater - I'm totally with you, at least it's the reason I started back ( I missed 1996-2000, the greatest part of the Bull, as I refused to even buy a stock). It really does boil down, as Prtzl stated, to "loss of control"- can I walk away from this, or does it (my market-related activity) control my every move?

If one has to watch the market/charts every minute, you probably fall into the later category. HOWEVER, babysitters and mothers have to watch their kids every second, ccoks have to watch food, etc. Most people have jobs which control THEM, not vice-versa. So investing is no diiferent, in some respects. And, quite honestly, I have had to ask myself the same question, recently, since the PPT can spike it 300 points in a minute and wipe out 50% of my account (this happened in July, after I had made about 200%, it hurt). I guess it depends on whether you "have to" (duty)or just "want to" (compulsion).

My business/career is enjoyable-I wouldn't be in it for free but the money aspect is (generally) secondary. And there are many unethical people in this business, which bugs me to no end.

I am not a professional investor, and don't rely on this activity for most of my income. If your situation is different, then I can see how the subject of greed would strike a very raw nerve.

I had a couple of minor successes a few years ago buying stock when everyone else was losing their shirts. The money had nothing to do with it. Achieving mastery in an unfamiliar realm was appealing to me. I felt I was becoming ambitious and actually on a quest for power, albeit in a very minor way.

The greed motive, and mindless consumption probably figure less in the gambling instinct than the thrill of imposing your will for a few crummy moments on a universe that seems bent on imposing its capricious will on you.

I quit, but don't criticize those who remain in the game. It's not a good thing for me to be involved in, but others have different motivations, and don't get their ego wrapped up in it. That's real emotional maturity.

Greed may be a “normal” human emotion, but we’ve never seen it valourized as a supposed force for good, until the past twenty years.

The attitude was summed up by the Michael Douglas’ character Gordon Gecko in Wall Street:

“I am not a destroyer of companies. I am a liberator of them. The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge has marked the upward surge of mankind, and greed--you mark my words--will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A. Thank you very much.“

Oliver Stone’s 1987 film Wall Street was conceived, like Tom Wolfe’s 1988 novel Bonfire of the Vanities, as an pre-emptive epitaph for the “decade of greed” — the time of junk bonds, megamergers, insider trading, and Wall Street’s “masters of the universe”. In Bret Easton Ellis’ 1991 novel American Psycho, the central character is a broker by day and killer by night. Greed, if popular culture was anything to go by, was on its way out — or at the very least, unwelcome as anything other than a prop for pop-culture morality tales.

Cut to 2003. The long hangover from the tech stock party still pounds away in the heads of unemployed dot-commers. There’s talk that the same accounting shell-game that bankrupted Enron was (and is) the norm for many Fortune 500 companies, which await fiscal reckonings of their own. Greed is the guest who never left, who continued to party on through the nineties and into the new millennium, doing deals under the pseudonyms “irrational exuberance,” and “self-interested utility maximization.”

The suspicion that Gecko was right still lingers among commentators. “Greed is Good, But Only Later,” declared a recent editorial in the New York Times. Gecko’s thesis is given an interesting twist by author Charles Morris: the payoff for the consumers from the greed of others comes later, after initial dislocations in the market.

“Sure, it (Enron) may have phonied its books, possibly bilked California ratepayers out of billions of dollars, wiped out employees' life savings to manage its stock price, misdirected millions of shareholders' dollars into senior executives' pockets. Though capitalism's apologists hate to admit it, historically that's the way raw markets work.”

No argument there. The author goes on to cite the deregulation of the telecommunications market, and the drop of mortgage rates in the banking industry. He suggests American capitalism in the eighties, with its boiler-room hustling of stocks and currencies, was simply the orchestra tuning up for the grand symphony of consumer good in the nineties.

“The same applies to Michael Milken's decade of greed. Waste and abuse there was aplenty, but the junk bonds and the raiders they financed helped blow away a corporate old boy network that had proved unable to cope with competitive challenges from Asia and Europe. Without the violent brush-clearing of the 1980's, it is hard to imagine bow America could have become the lean, mean, competitive machine that dominated the industrial world of the 1990's.“

There is, in this assessment of greed's promise, no moral dimension. Robber barons simply do what nature has designed them to do, like sharks or any other predator. And by culling the herd, they spur the survivors among us to move a little faster. There is no mention of the astronomical wages, perks, and parachutes paid out to corporate CEOs, the carnage to workers from nineties downsizing, or the bankruptcies suffered by small players from deliberately misleading brokerage advice.