Blog #23 Long Term Greedy

I recently finished the book “What happened to Goldman Sachs” by Steven Mandis, it was a fascinating look into the world of investment banking. He summed up something I have always wanted to articulate but haven’t quite been able to put my finger on it.

Long term versus short term greedy. One can be beneficial, the other is almost always disastrous.

As you know, I don’t have anything against greed. I think it is only natural to want more of what you want, whatever it may be. Sitting with a pile of money wont make you happy but it will allow you to do things that make you happy (travel, funding worthy causes, lazing around, take your pick). Others see their pay cheque as a badge of honour, it shows how valuable they are to an organisation, I don’t have a problem with that either.

I don’t consider greedy a bad thing.

Back to long term versus short term greedy.

Long term greedy is wanting more but being prepared to wait, to plan carefully. In many ways commercial and retail banking is like this, little snippets of interest, careful loans, small returns but a lot of them built over a reliable consumer base who trust you. Bankers have to be dull and grey, gravitate towards stability and be the quiet backdrop that allows others to do interesting things. I take pride in that.

Short term greedy is wanting to make a snap decision to line your pockets quickly which can often have disastrous consequences. This is more like investment banking, wanting fast returns, having no real interest in a long term strategy, you dump the stock the second it becomes convenient to do so. There is no interest in sticking with a company or customer base, buy low, sell high, short term greedy. Generally as well the investment bankers want to be the centre of attention and don’t have the more subdued, stoic personalities on the other side of banking (in my humble opinion).

That short term outlook is fine for investment banking but the danger is when other organisations act like this- like when retail banks went short term greedy for subprime mortgages. Then boom, global recession. We cant all be short term greedy or the result is chaos. The banking profession still hasn’t full recovered from that disastrous shift from long term to short term greedy. Now we are moving back to long term, thank god.

It was a great book with some good points. Not really Lee Library worthy as it has nothing to do with improving your own writing but some good talking points.

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