The differences between investors in the stock market and the very different area of real estate investments are clear. Stock market investors are more greedy.
That is not the only difference, of course, but it is certainly the most obvious. If you don’t believe it, just consider a recent financial advisor’s email to me (one of thousands who got the message).
This advisor who will go nameless had a “top stock pick” that gained more than 32% in one single day.
He boasts of using aps to find his winners. He also had another top pick that escalated in value also by almost one third leading him to title his pitch for more business in part “Nailing Big Winners.”
“If two picks in two weeks sound interesting, then let’s talk,” he writes.
Let’s talk, indeed. About greed, in particular.
Most of us can’t forget the Wall Street character of Gordon Gekko in Oliver Stone’s brilliant film “Wall Street.” He’s the one who told us “greed is good” and made the phrase as famous as Arnold the Terminator’s “I’ll be back.”
Back in the days when you could view “Wall Street” in your local theatre, Gekko was named number 24 of the top 50 movie villains of all time.
Not a noble distinction, of course, but consider people such as myself who recommend real estate investors buy foreclosed homes. Consider those buyers: are they not villains themselves…taking advantage of people who are weakened because they have financial problems that force them to sell at a lower price?
It’s perhaps forgotten by some of us that Gekko ‘s net worth of $8.5 billion started not on Wall Street but in buying and selling speculative real estate in the 1970s. But on Wall Street he was notorious not for real estate but for “insider trading.” And corporate raiding, of course.
In the film, his friend Bud Fox turns state’s evidence in return for a lighter sentence.
Gekko is convicted of insider trading and goes to prison. But in typical American fashion, this is only a temporary distance. He gets out to become an author and lecturer. He even becomes one of the few to correctly predict the so called “credit bubble” leading to the stock market’s collapse.
The Gekko character was played by Michael Douglas who later took some pains by making some distance from the greed remark. When he was asked whether hit fictional movie character played any part in the stock meltdown, he pointed out that he was an actor playing a fictional person, which is of course the truth.
Unfortunately or otherwise for the actor, he will always be associated with the greed of Gordon Gekko. It will be part of his obituary.
So if you ask me, greed when you are demanding one third of an investment return within a single day. Real estate investments will seldom if ever get you that return. But they won’t require you to be greedy, either.