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Would you rather have $1,000,000 or 1 cent? Silly question for most, but I had to ask because the other night I was watching the TV show Deal or No Deal. The buggy-eyed greed of the contestant that night reminded me of many traders and money managers.

In case you haven't seen the show it works like this: The contestant starts off with a briefcase, and a bunch of ladies on the other side of the room have briefcases.

Each briefcase represents anywhere from 1 cent to $1,000,000. The contestant picks a random case, they open it to reveal how much it represents, and it's removed from play. Next comes the interesting part. The "banker" gives the contestant an offer for the case he is holding based on the odds that the contestant might still get a good chunk of money from the other cases. There is a little more to it, but that is the basic idea.

So the other night this lady had the chance at either a $1,000,000 briefcase, $400,000 briefcase, $10,000 briefcase or a 1 cent briefcase. The game show "banker" offered her $223,000.

She thought long and hard about it and asked her dad what he thought and the greedy little man said, "No way!" Next she asked her husband and, being the smart man that he was, he said, "Honey, whatever you decide, I stand behind you."

Being a married man myself, I would have said the same thing.

She reminded me of a deer looking into headlights. The dad reminded me of a greedy trader or money manager and the husband reminded me of a good client who does not back-seat drive the professional hired to trade for them.

To make a long story short the contestant refused the "banker’s" offer and kept going for it, ending up with only 1 cent!

That set a new record for the show. I must say the show did succeed in making it entertaining. They must get all their contestants from Las Vegas. I'm sure that accountants, engineers and professional money managers never make the cut. They would be too boring and consistent to watch.

Her winning only 1 cent is why I pick low risk, low leverage, and low draw down trades. Some people exposed to trading seem to forget that 8% per year in the mutual fund world is considered good and that a large percentage of the population gets less than that on average. So why would 40%, 50%, or 70% net per year not be enough?

I'll tell you why, because they're greedy, just like the greedy dad who couldn't give his daughter any good advice. Sure, the $223,000 might not have been as high of an offer as they wanted, but they only had a 50% chance of getting anything higher.

Sure, one month we might only make 2.5%, or lose 2.5%, but so what, if at the end of the year we make you more than your mutual funds. Greed is a killer.

I'm a trader, but I'm not a greedy trader.

You're a trader/investor, but are you a greedy one? I don't know, only you can answer that question. It might be ok to go for it on a game show or a trip to Las Vegas, but to me it's not ok with your portfolio, your retirement, and your future.

Looking out for you,

Big A