Objective: To have you reflect upon the greater fool theory.
Directions: Read the statement and then answer the questions that follow.
The greater fool theory (also called survivor investing) is the belief held by one who makes a questionable investment, with the assumption that they will be able to sell it later to “a greater fool”; in other words, buying something not because you believe that it is worth the price, but rather because you believe that you will be able to sell it to someone else at an even higher price. When applied to fields outside of economics, the term greater fool means someone who combines self-delusion with ego in order to succeed where others have failed.
In the final episode of The Newsroom (Season 1, 2013), the term “greater fool” was used to describe the show’s main character, Will McAvoy (Jeff Daniels), because of his belief in doing “real news.” Throughout the episode, Will views it as a negative term. However, financial reporter Sloan Sabbith (actress Olivia Munn) tells Will, “The greater fool is someone with the perfect blend of self-delusion and ego to think that he can succeed where others have failed. This whole country was made by greater fools.”7
1. What does it take to be a greater fool?
2. Why does an organization need greater fools?
3. What are some issues the greater fool will encounter along the way?
4. Are you, or do you wish to be, a greater fool? Explain.
5. Have you studied a greater fool in history? Do you personally know of any greater fools? What can you learn from them? Explain.