"Greed Is Good" vs Investment Ethics: Lessons from Wall Street (1987)

There's one line in the history of finance films more famous than any other: "Greed, for lack of a better word, is good." This line was delivered by the character Gordon Gekko in the film Wall Street (1987), played by Michael Douglas, who won an Academy Award for the role.

Ironically, this line is misunderstood by millions of people. Many watched this film and made Gekko an idol - a symbol of success, power, and boldness. They missed one important fact: Gekko goes to prison at the end of the story.

The film's screenwriter, Stanley Weiser, even had to write an op-ed titled "Repeat After Me: Greed Is Not Good" two decades later, because he was stunned at how many people misunderstood the film's message. This film was meant to be a warning about the dangers of greed - not a guide to becoming greedy.

For Malaysian investors, Wall Street (1987) is the best case study on ethics in investing - particularly about insider trading, corporate greed, and the difference between creating value vs destroying value. In this article, I'll unpack the real lessons of this film, not the misunderstood version.

Short Answer: What Are the Real Lessons of Wall Street (1987)?

The real lesson of Wall Street (1987) is: excessive greed leads to ruin, not success. Although Gordon Gekko looks glamorous with his "greed is good" speech, he is eventually arrested for insider trading. The film critiques the 1980s Wall Street culture where ethics and the law were considered irrelevant. The lesson for investors: long-term success comes from creating real value and integrity, not from illegal shortcuts like insider trading.

What Is the Film Wall Street (1987)?

Wall Street was directed by Oliver Stone and released on 11 December 1987 - right after the "Black Monday" market crash of October 1987. The film tells the story of Bud Fox, a young stockbroker eager to get rich and successful.

Bud is desperate to win the attention of Gordon Gekko, a wealthy corporate raider (an aggressive investor who takes over companies). To attract Gekko's interest, Bud provides insider information (insider trading) - confidential information he gets from his father, who works at an airline company.

From there, Bud gets drawn deeper into Gekko's world: insider trading, stock manipulation, and corporate raiding. He gets rich quickly - but at the cost of his integrity and ultimately his freedom.

According to Wikipedia, the Gekko character was inspired by several real-life financiers including Ivan Boesky (an arbitrageur arrested for insider trading) and Carl Icahn (a famous corporate raider).

Lesson #1: "Greed Is Good" Is Satire, Not Advice

Gekko's full speech at the Teldar Paper shareholders meeting was: "The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works."

This line was inspired by a real speech by Ivan Boesky at the University of California in 1986, where he said "Greed is right" - a few months before he himself was arrested for insider trading and fined USD100 million.

Here's the irony many miss: the person who inspired the "greed is good" speech was actually destroyed by his own greed. The same goes for Gekko in the film - he goes to prison.

Oliver Stone and Stanley Weiser created the Gekko character as a villain, not a hero. The "greed is good" speech was meant to make the audience uncomfortable - like listening to a smooth-talking manipulator justifying unethical actions.

But popular culture twisted this message. Many young investors watched this film and thought: "I want to be like Gekko." They saw the luxury, not the downfall.

Lesson #2: Insider Trading Is a Crime - Not an "Edge"

The main cause of Bud Fox's and Gekko's downfall is insider trading - trading stocks based on confidential information not yet disclosed to the public.

Why is insider trading illegal and a crime?

1. It's unfair - it gives a select few an unfair advantage over ordinary investors who don't have access to confidential information
2. It destroys market trust - if people think the market is manipulated by insiders, they won't invest
3. It's stealing - fundamentally, it steals profits from investors who trade honestly

In the film, Bud sees insider trading as an "edge" - an advantage to win. But the reality is, it's a crime that leads to prison.

In Malaysia, insider trading is an offence under Section 188 of the Capital Markets and Services Act 2007 (CMSA). The Securities Commission Malaysia actively investigates and prosecutes insider trading cases. Penalties include up to 10 years imprisonment and a minimum fine of RM1 million.

The SC Malaysia has successfully prosecuted several insider trading cases over the past decade - involving company directors, executives, and individuals who got confidential information about a corporate exercise before it was announced. Information like takeovers, quarterly financial results, or major dividend declarations is considered "material information" that cannot be traded on before public disclosure. For retail investors, this means even if you get an "inside tip" from a connection working at a listed company, acting on it could make you guilty too.

The lesson: there's no legal shortcut to getting rich in investing. If your "edge" involves confidential information or breaks the law, you're playing with fire - just like Bud Fox. Truly successful investors build wealth through analysis of public information available to everyone, not secrets.

Lesson #3: Corporate Raiding - Create Value vs Destroy Value

One of the film's main plots is the clash between Gekko and Bud over Blue Star Airlines - the airline where Bud's father works.

Bud brings Gekko the idea to take over Blue Star and grow it. But Gekko's real plan is asset stripping - break up the company, sell its assets, and lay off workers for quick profit. Including worker pensions that would vanish.

This is the critical difference the film highlights:

• Value creation: Investing in a company, growing it, creating jobs and useful products. Profit comes from real growth.
• Value extraction: Breaking up a company, selling assets, laying off workers. Profit comes from squeezing what already exists, leaving destruction behind.

Gekko represents value extraction. He doesn't care about workers, communities, or the company's future - only personal profit.

For long-term investors, this lesson is important: companies that create real value are more sustainable investments. This aligns with Peter Lynch's philosophy in One Up on Wall Street - find companies with fundamental growth, not those manipulated for quick profit.

Lesson #4: The Wrong Mentor Can Destroy You

Bud Fox admired Gekko and wanted to be like him. Gekko became Bud's mentor - but a mentor who taught the wrong values.

In today's investing world, there are many "mentors" and "stock gurus" on social media promising quick riches. Just like Gekko, they look successful and glamorous. But:

1. Do they teach ethical and legal principles?
2. Does their wealth come from real investing, or from selling "courses" to followers?
3. Do they encourage you to take risks you don't understand?

Bud learned too late that Gekko never cared about him - Bud was just a tool. The same lesson I emphasised in my article on Wolf of Wall Street: be careful about who you make your role model in investing.

Lesson #5: "Children of Gordon Gekko" - When Greed Becomes Policy

In 2008, then-Prime Minister of Australia Kevin Rudd gave a speech titled "The Children of Gordon Gekko". He argued that Gekko's philosophy - "greed is good" - had been absorbed so deeply into the global financial system that it became policy.

Deregulation throughout the 1990s and 2000s (like the repeal of the Glass-Steagall Act in the US and the exemption of derivatives from oversight) rested on the assumption that markets self-correct and greed, properly channeled, works.

The result? The 2008 global financial crisis - where uncontrolled greed in the banking and derivatives sector nearly collapsed the world economy. Millions lost their homes and savings.

This proved the Wall Street film's thesis: uncontrolled greed ultimately leads to destruction - not only for individuals like Gekko, but for the entire system.

The lesson for Malaysian investors: be careful of market euphoria and the "everyone's getting rich" mentality. When collective greed peaks, a crisis is usually not far behind. This is the same as the trap of FOMO and herd mentality in the GameStop saga.

Lesson #6: Ethics Isn't Weakness - It's Long-Term Strength

In the film, the character representing ethics is Lou Mannheim, a veteran broker who advises Bud: "Good things sometimes take time" and "Don't get emotional about stock."

Lou represents patient, ethical investing based on fundamentals - the opposite of Gekko who wants quick profit by any means.

Early in the story, Lou's approach looks "boring" compared to Gekko's fast wealth. But by the end, Lou remains free and respected, while Gekko and Bud are destroyed.

This is a timeless lesson: ethics and patience aren't weaknesses in investing - they're the winning strategy in the long run. The world's most successful investors (Warren Buffett, Charlie Munger) are famous for their integrity, not for shortcuts.

Lesson #7: Ask "How Much Is Enough?"

One of the most powerful lines in the film is when Bud asks Gekko: "How many yachts can you water-ski behind? How much is enough?"

Gekko has no satisfying answer. For him, there is no "enough" - greed has no end.

For investors, the question "how much is enough?" is important:

• What are your real financial goals?
• How much risk are you willing to take for extra profit?
• Are you investing to achieve life goals, or just for more without end?

Investors with clear goals who know "how much is enough" are more likely to make rational decisions. Those driven by endless greed - like Gekko - tend to take extreme risks that ultimately destroy them.

FAQ: Common Questions About Wall Street (1987)

Q: Is Gordon Gekko a real person? A: No, Gekko is a fictional character. But he was inspired by several real financiers like Ivan Boesky, Carl Icahn, and Asher Edelman. The "greed is good" speech was adapted from a real speech by Ivan Boesky.

Q: Is Gekko a hero or villain in the film? A: A villain. Although many mistakenly see him as an idol, the director and screenwriter created Gekko as an evil character. He goes to prison at the end for insider trading.

Q: What does "greed is good" actually mean? A: In the film's context, it's a false justification for greed and unethical actions. Screenwriter Stanley Weiser later emphasised: "Greed is NOT good." It was meant as a warning, not advice.

Q: What is insider trading? A: Trading stocks based on material information not yet disclosed to the public. It's illegal in Malaysia under Section 188 CMSA 2007, and can lead to imprisonment and heavy fines.

Q: What is a corporate raider? A: An investor who buys a large stake in a company to take control, often to break it up and sell its assets (asset stripping) for quick profit, rather than to grow the company.

Q: Does Wall Street (1987) have a sequel? A: Yes, "Wall Street: Money Never Sleeps" (2010), also starring Michael Douglas as Gekko, after he gets out of prison. It's set against the backdrop of the 2008 financial crisis.

Q: Are the film's lessons relevant for Malaysian investors? A: Very relevant. Insider trading, market manipulation, and greed exist in every market including Bursa Malaysia. The SC actively enforces these laws. Investment ethics are universal.

Q: Can I get rich ethically in investing? A: Yes, and that's the most sustainable way. Investors like Warren Buffett prove that long-term wealth comes from fundamental analysis, patience, and integrity - not from illegal shortcuts.

Conclusion

Wall Street (1987) is not a film about how to get rich like Gordon Gekko. It's a warning about how uncontrolled greed leads to ruin - for individuals and the financial system. Gekko goes to prison; Bud Fox loses his integrity; and two decades later, the "greed is good" philosophy contributed to the 2008 global financial crisis. The real lesson: ethics, patience, and creating real value are the winning strategy in the long run.

Before you can invest ethically and based on fundamentals, you need market access through the right and legitimate platform.

Open a CDS Account to invest in Bursa Malaysia and also foreign stocks like the US and Hong Kong - through a licensed broker protected by official regulations.

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Further Reading

• 7 Wolf of Wall Street Lessons on Stock Fraud and Greedy Brokers
• Dumb Money & the GameStop Saga: The Dangers of FOMO and Herd Mentality
• One Up on Wall Street Summary: What Peter Lynch's Classic Teaches Malaysian Investors
• Pump and Dump on Bursa Malaysia: 6 Signs of a 'Goreng' Stock Promoted Through Fake News
• i3investor & Telegram Sentiment: How to Use 'Hot Stock' Chatter Without Becoming a Pump & Dump Victim