That is the question posted by Gordon Gekko (Michael Douglas) in the newly released Wall Street movie sequel which, by the way, is abysmal.
One of the pivotal moments in the movie (IMHO) is when the least-sharky of the Wall Street sharks (played incredibly badly by insipid Shia LaBeouf) asks the über-shark (played much better Josh Brolin) what his ‘walk away Number’ is.
Über-Shark answers: “More!”
If you don’t see the problem with this, then you haven’t been reading this blog.
But, my main issue with the movie, aside from the bad acting/characterization/plot-lines is the central premise:
Gordon Gekko has come out of 8 years in jail, with $100 million salted away in some Swiss Bank Account, but held in trust for his since-estranged daughter. Totally believable, so far … except that there are so many tax avoidance issues that no father would put their daughter in that much danger.
But, that’s not my issue with the plot.
The daughter indicates that she knew that there may be SOME money SOMEWHERE for her, but she didn’t care and was planning to give it all away (a plan that she eventually has a chance to execute, but we’ll come to that). Now, nobody in their right minds would give all their money away to charity: a little, some, most … maybe … but, not all!
But, that’s not my issue with the plot.
It’s in the execution of the ‘give away plan’: her fiance, and soon to be father of her child, talks her into ‘donating’ all $100 million to some new company experimenting with a new form of clean energy (lots of fancy diagrams, light beams, serious-but-kindly-and-honest-looking-scientists, high-tech-futuristic-energy-orbs, and so on).
Now, what form of young-and-brilliant-but-disillusioned (don’t forget the “brilliant” part) Wall Street type would put $100 million of his own money (well, he’s about to marry the chick, isn’t he?!), which represents about $99 million more than his entire current net worth (and, that’s only because he just received a $1.5 million bonus check), in a collapsing market into ONE INVESTMENT?
None of my readers, I hope!
And, even if he was stupid enough to bet the entire $100 million, would he bet it on a speculative company that had NEVER made a single cent in profit?
That, my friends, is financial suicide. Don’t do it, because greed is NEVER good 🙁
But a lot of people do effectively put all or a substantial part of their investment into one investment – a pension plan or, earlier in life, their first home. I suspect that you won’t find too many of them hanging out here.
I haven’t seen the movie yet – plan to when it is released on DVD.
To answer your question: yes, greed is good. As I type this, the smartest people on the planet are trying to figure what kind of music I will like, what kind of car I will want to drive, what kinds of food I want, and how to cure cancer. Why? Because they want a bigger piece of the pie. They are “greedy”. I feel like a king!
The ones who are successful run into the problem of learning to control their greed. Gates, Buffett et.al. learned. Ken Lay, Dennis Kozlowski et.al never did.
@ TraineeInvestor – Isn’t a pension plan more of a ‘vehicle’ than an investment? A lot of plans invested solely in own company stock e.g. GM …. nice! 🙁
@ DIY – Better yet, Bit Torrent it … greed is THAT good 😉
@Adrian
Yes, a pension plan is a vehcile, but it still amounts to putting all your money into one basket – look at how many underfunded defned benefit pension plans have had to cut back on payouts or are facing shortfalls. Personally, I would be very frightened about relying on such a plan for my retirement needs (unless backed by the long suffering taxpayers).
I am interested in this new energy source, especially if there are lasers, and sharks.
@ Illiquidity – Oh yeah … there are lasers, baby! As to the sharks … this movie’s full of them. Sharks … and, Gekko’s 😉