Wednesday, August 09, 2006

7 Deadly Sins of Investing (4/7)

Sin #4 - Greed

More people agree that greed is a sin, but less people admit that they are greedy. Instead they would say they are just "ambitious" or "aspiring". They want to earn a huge profit in a short period of time by making a big deal. But how can you differentiate ambition from greed? Usually you only know you are actually greedy (or over-ambitious) after you have paid for a heavy lesson!

The fundamental problem of greed is: being unrealistic. Is it realistic for you to fully believe in the so-called "insider information" heard from your neighbor and put your full stakes on a stock? Is it realistic for you to believe that you are the smartest or luckiest guy at this moment? The answer is too obvious.

Okay, even you insist that you are just ambitious, let me give you a final advice - Be very cautious when borrowing to invest or speculate. Remember how people died in the past 10 years.

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