Should You Invest like a Shark, or a Goldfish?

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When I was an undergrad, I was a paid research assistant for one of the most accomplished professors at my university. He was at the top of his field, a multimillionaire, and one of the most egotistical a*sholes on Planet Earth.

He was the ruler of his small, but strangely powerful, universe. He knew it, and could not care less about trampling over anyone who got in his way (academically or in the business world). Being young and impressionable, I frequently stood in awe of him. Mainly because I wanted to be just like him and have the option of driving a Mercedes Benz or helicopter to work each morning.

Every week, he would schedule a working lunch with his two undergrad RAs (Pete and I) where he would bestow us with some wisdom while simultaneously busting our cojones for not generating results fast enough to meet his satisfaction. During one of our last lunches of the spring semester, he inquired if we would be taking his bioethics class (with a strong emphasis on the business side of bioethics) next fall. Pete barely had time to shrug his shoulders before I gave my typical smirk and said “No” in a sarcastic tone.

When he inquired as to why, I suggested taking an ethics course from him would be like going to church with Satan delivering the sermon. He got a chuckle out of my answer, and quickly retorted a question that I find myself repeating over and over again to myself on a weekly basis when it comes to choosing my long term investments.

Would you rather be the shark, or the goldfish?

After seeing the puzzled look on my face, he quickly went into a ten minute spiel about the benefits of knowing where the line between good ethics and bad ethics is drawn (a shameless plug for taking his class). But more importantly, he stressed that there are potential rewards for having the ability to convince yourself (and everyone else around you) that it is perfectly acceptable to do a balancing act upon the line between the ethical and the unethical when it comes to your best interests.

I took this to mean that it’s justifiable to bend a few rules or make a few exceptions when it comes to making a living in a world that wants to classify you as a good (the goldfish) or bad (the shark) businessman.

He corrected me (a common occurrence), and said I over analyzed the question. Like always.

He simply said his question was about having the mental toughness to eat your prey when you had the chance. After all, if you choose not to be the shark, you choose to become fish food.

Should Business Ethics Matter when Making Investments?

Last week, I read one of the most damning articles I’ve ever seen about a publicly traded company. Too bad it happened to be about my favorite investment bank — Goldman Sachs (NYSE: GS).

I’ve been a shareholder in Goldman Sachs in the past, and I guess I still am considering I own a few shares of the Vanguard Financials ETF (VFH), but after reading the Rolling Stone article by Matt Taibbi, my ethics radar kicked on and I began considering whether I should — or shouldn’t — buy another 100 shares of GS the next time a buy on the dips opportunity presents itself.

After all, if they’re the great architects responsible for engineering the constant boom and bust cycles we keep experiencing, then who else would you want to side with?

Taibbi-Goldman-Sachs

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So what say you? The article does a very good job labeling Goldman Sachs as the biggest (and smartest) shark in the pool that is Wall Street.

But does such a thing repel you? Does it make you curse their bubble-making ways and blacklist them when it comes to future investments? Or does that make you want to invest in them since they’re the best cash cow on Wall Street?

I suppose you have to ask yourself… are you the shark, or are you the goldfish?