Dealing with Addiction
The desire to make money from savings, investing, and speculating is natural. Increasing stock prices are attractive; compound interest is fascinating; rising rents put a smile on the landlord’s face. It is only when the natural desire to make money investing exceeds normal bounds that addiction takes over. Greed is an extreme emotion. Few investors ever feel greed.
The cliché that greed and fear are the only two emotions investors’ feel is false. Greed is rare. Greed leads to extreme actions. In the late 1990s, the lure of quick and easy profits caused many people to leave their jobs and trade stocks all day. With a small stake and a second mortgage, a credit line, a margin brokerage account, or several credit cards, greed led many on the path of addiction. The gold rush of 1849, the real estate boom of the early 1980s, and all other manias had similar results on a small band of investors. At the cost of losing work, homes, families, friends, and social standing, these lonely individuals pursued their greed
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