Gordon Gekko is the epitome of Wall Street – he focused on making money at all costs, has little regard for others, and will do what it takes do make a profit. In fact, if you catch the last line of this clip, Gordon Gekko even thinks that greed will improve the economy of the United States as a whole!
However, Gordon Gekko's sayings in the movie still have a profound impact on investing today. Here are Gordon's thoughts on greed, and some lessons that can be applied today.
Gordon Gekko on Greed
Gordon Gekko never actually said “Greed is Good”. The original line is
The point is, ladies and gentlemen, that greed, for the lack of a better word, is good.
He said this during a board meeting for a company he was trying to take over.
Gordon Gekko was all about making a buck, and wanted to buy this company Teldar Paper because he thought he could make a profit from it. However, he was getting all of his knowledge from inside information, which was, and still is, illegal. His answer to that was,
“The main thing about money, Bud, is it makes you do things you don't want to do”.
In the end, Gordon Gekko went to prison for his deals…but the lessons from this still live on.
Lessons Learned about Greed
The primary lesson that should be taken away from Gordon Gekko is that greed itself is not the problem, but the way that it is gone about. Greed can drive you to excel, to create, to do things you wouldn't normally push yourself to do. However, it doesn't mean that you can sacrifice your other ethics!
Gordon Gekko was absolutely right when he said,
The most valuable commodity I know is information.
But you can't go about stealing the information or getting it from some other means. Instead, do the work yourself, build your own information, and then profit from it.
But if you can't do that, you should follow this omen:
Ever wonder why fund managers can't beat the S&P 500? ‘Cause they're sheep, and sheep get slaughtered.
Just keep it simple – don't try to beat the market, join the market. Invest in index funds and don't worry about the rest!
What are your thoughts on the wisdom of Gordon Gekko?