I have a unique e-mail ID for my students from various lecturing assignments and a “knowledge network” I run, which exchanges insights about various things among intelligent people I have picked up through my career.
Declaimer: This article was originally in August 2007, and some data points may be outdated
Because of the heavy traffic on that e-mail ID, it is a target for a lot of spam. Yahoo filters out some spam automatically, making it a somewhat accurate repository of spam collected ‘randomly’.
I know this does not count as scientific research, but below is a list of 10 representative spam messages I found on the Yahoo spam filter on a given (random) day. I have put down the title of the mail, and the expected subject (as derived from the subject heading because I never open these emails):
| Sl | Subject Heading of Spam | Subject |
| 1 | Great rise is coming in this (stock) | Stocks |
| 2 | Many men were skeptical at first but after they gave our penis enlargement pills………. | Sex |
| 3 | Recent stuff: no exam or classes required | Coaching |
| 4 | Fuel for this increased metabolic rate can be found in stored body fat | Sex/ Slimming |
| 5 | Join thousands of satisfied customers and experience…. | Sex |
| 6 | Do you wish to increase your volume by up to 500%……? | Sex |
| 7 | This stock combines a no-hype situation with a serious promise of a rise. | Stocks |
| 8 | This stock shows amazing earning potential | Stocks |
| 9 | You always cumm during a sexual performance….. | Sex |
| 10 | Without a doubt, this stock opens up great possibilities for a trader… | Stocks |
It goes on like this, so I don’t need to give you the full details.
As I said above, this is just anecdotal evidence, so let me make my point: on average, spam is 50% about Sex, 40% about money/ stocks, and just 10% about others.
If the above count mimics how the world is stimulated, let me offer a conjecture: on average, people are motivated 50% of the time by Sex, 40% of the time by money and the rest is too boring to talk about. The numbers are approximate, and the variances would be high, so let me say this more carefully: sex and stocks (a.k.a. “easy, unearned money”) are the two great natural obsessions of mankind… what else do people spend their time thinking about?
This would mean that this magazine ranks along with “Stardust” and “Playboy” as feeding one of the two great obsessions of mankind. It makes me feel rather humble, what?! For all my jargon and erudite intelligence, is that all I do? …….bring a sophisticated sheen to an essentially primeval motivation. So just like Mr. Hugh Hefner guarantees you a “rise”, well, do I promise you a raise? ……L ! Just that we focus on different places!
Early in my career in the late eighties, a Finance company I used to work for (that later became one of the best in its industry) commissioned an exercise to locate typical behavior patterns that offer leading indicators of potential defaulters. One of the highest correlations was found to be with the broad indicators of ‘sexual obsession’. In other words, a tendency towards sexual depravity turned out to be the clearest leading indicator of a potential defaulter, REGARDLESS of “ability to pay”. This study applies to retail borrowers, of course.
Of course, maybe this does sound a little far-fetched, so let me quote Warren Buffet on this. Good investors have “low arousal levels”, or words to that effect, he often says. Of course, he does not mean to be taken literally, but do you get the picture?
Ok, you still don’t get it, so let me try another route. Sex is consumption (in spirit), and so is over-borrowing………both represent a tendency to prepone consumption/ pleasure. Both put self-gratification above celibacy/ postponement. Both represent a tendency to be hedonistic, and consumerist…….enjoy life rather than produce, save, invest, or take risks.
Another point…..you can save if you have forbearance & fortitude. But you still can’t invest/ take risks, if you care too much about money. Hence, the key to wealth-building is NOT just the ability to save (which women have in plenty, for example) but the ability to lose money, a.k.a. the ability to take risks.
Yet stock prices are supposed to track the ability to create wealth, i.e., the ability to produce.
That seems to be the explanation why most people, particularly the retail crowd are such poor investors. How can a person, who is intrinsically consumerist/ hedonistic, be able to locate in someone else the ability to create wealth? He would have to look for someone who is just not like him, and whose behavior and value systems he cannot relate to.
This brings me to the need for “morality” as the defining characteristic of a good investor. A ‘moral’ investor is philosophically a producer (as opposed to a consumer), restrained as opposed to hedonistic…….he seeks to maximize ‘profit’ (also known as ‘producer surplus’), rather than consumption. He is usually a good saver, who understands saving behavior. He chooses “people-like-us” (i.e. like himself), attracted to those who outperform (competition) in small increments, then compound such behavior over long periods, to create wealth through virtuosity and frugality. The Power of Compounding works for such people.
Let me take you deep into “Moral Philosophy”, the original name of the dismal science. John Stuart Mill wrote a lot about hedonism in Economics. He called it Utilitarianism; philosophical Hedonism has sexual and libidinal connotations:
One school argues a quantitative approach. They believe that the value of pleasure could be quantitatively understood. Essentially, the value of a pleasure is its intensity multiplied by its duration – so it was not just the number of pleasures, but their intensity and how long they lasted that must be taken into account.
The wag in me is tempted to point out that pigs, therefore, must be the happiest species on earth. After all, they have sexual climaxes that go on for around 45 minutes, don’t they? Oh, to be a pig…….!!!
- Other proponents, like John Stuart Mill, argue a qualitative approach. Mill believed that there can be different levels of pleasure – higher quality pleasure is better than lower quality pleasure. Mill also argues that simpler beings (he also mentions pigs) have easier access to simpler pleasures; since they do not see other aspects of life, they can simply indulge in their pleasures. The more elaborate beings tend to spend more thought on other matters and hence lessen the time for simple pleasures.
I have often wondered why NONE of the great investors have ever attracted media attention for a varied and eventful sex life. I mean, of the kind that Donald Trump, Rod Stewart, or Michael Jackson are known for. Why the flamboyance of Richard Branson is not to be seen in a George Soros, for example.
By sheer density of population, the great investors make up a disproportionate share of the world’s super-rich by far. It is a well-accepted fact that good investing contributes the largest chunk of the Forbes 100 Individuals’ Rich List. Yet, if big money obtains a well-talked-about sex life, why is it that NOT ONE of these people find their names in the (hypothetical) Playboy 100?
Do a similar comparative listing with film stars, sports stars, and even industry stalwarts and you will find some correlation between the money people make and the sex they have. Why is investing a unique exception? In all other ‘industries’, good hunting skills lead to great sex lives, which is how Nature meant it to be, I suppose.
My surmise is that good investing needs you to be a good ‘economist’. I don’t mean the quantitative, financial, and data-based skills that pass off for Economics in our Business Schools, but real “Moral Philosophy” of the kind that John Stuart Mill sought to focus on. This moral dimension has ceased to be mentioned in today’s literature.
This is a very deep subject, not meant for a 2-page column. But my limited purpose is to remind you: before you set out to become a great investor, examine your level of ‘human-ness’ before you seek to conquer “greed and fear”. That at least, I am sure you have heard before…..!!!
