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Over Confidence in "Wall Street: Money Never Sleeps"

by Charity-Joy Acchiardo

In a scene from the 2010 feature “Wall Street: Money Never Sleeps”, Gordon Gekko (having been in prison for insider trading) and Jake (his daughter's fiancé) discuss investment. Gekko makes reference to the Tulip “speculation fever” which, in 1637, at its peak had tulip bulbs selling for more than real estate. According to the theory of efficient markets, where independent news flows freely and markets are fairly valued, it is impossible to beat the market through expert stock selection. But while market exchange may make psychological factors cease to matter, many psychological factors matter even in markets - from the tulip mania in 17th century Holland to the dotcom bubble in 2000 where prices soared and then collapsed. In Gekko's words “people got wiped out”. He describes a fellow investor as having “an ego the size of Antarctica”, in so doing pointing towards one such psychological factors - overconfidence.

Over Confidence in "Wall Street: Money Never Sleeps"

Gordon Gekko explains Tulip speculation fever and the role of ego in investment. While market exchange may make psychological factors cease to matter, many psychological factors matter even in markets.

from Wall Street: Money Never Sleeps (2010)
Creator: Oliver Stone
Distributor: 20th Century Fox
Posted by Charity-Joy Acchiardo
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