The nature of greed in online investing

December 17, 2009

Greed is not nearly so clear to us as fear. It is often realized only indirectly, after the fact, or not at all. This is because greed is not really a feeling but a combination of thinking and behavior.

While it may be all right to admit to ourselves, and sometimes even to others, that we are feeling fear over something, it is less acceptable for us to admit to being greedy. Think about your own reaction to this statement. Is it true for you? Are you more willing to admit to feeling some fear, at least in relation to making an investment, than you are to acknowledge your greedy actions?

I know from two and a half decades of clinical practice that men typically dread having to admit feeling afraid of anything, especially to another man. Some are so out of touch with fear that they can be shaking in their loafers but not label what they’re feeling as fear. Our John Wayne culture doesn’t encourage men to be aware of, or admit to, fear. It teaches the opposite¬°¬™to deny it and block it out.

Once they let down their defenses and become more in touch with themselves, men begin to acknowledge this primal and powerful emotion. Admitting to feeling fear is tough enough. But it’s nothing compared to admitting to greed. Nobody admits to thinking or acting in a greedy way, except Gordon Gecko in the movie that defined the 1980s, Wall Street.

Although Michael Douglas proclaims eloquently that “greed is good,” we do not typically view greediness as a desirable personality feature. Those in the business and financial worlds are perhaps more direct than those who aren’t with their desire to make as much money as possible. Only those related to the Wall Street world have the gall to walk around wearing a tie with $100 bills printed on it or suspenders with stock quotes on them.

But even those who are very direct in their avaricious intentions to accumulate wealth and impressive possessions shy away from thinking of or describing themselves as greedy.

Because greed is inferred from our actions, it is not so easy to examine our behavior after the fact, especially when we have a suspicion we’re not going to like what we see. When we compare a behavior like greed, which is outside of us in the sense that we act upon the world in a greedy fashion, to the immediate recognition of fear, which is felt inside us, it becomes clear why one is somewhat easier to decipher than the other.

Just to make the point more simply: Have you ever heard anyone say, “I’m feeling really greedy today”? Probably not. What they will say is that they feel a hunger, craving, or an excitement to have more.

What they feel is an intense desire for possessions and wealth. Then they take certain actions that appear to be greedy, like holding out for just a bit more profit, buying more of something that they really don’t need, or not being able to stop overworking for more money even when their personal relationships may suffer.