What Comic Book Villains Can Teach Us About Investment Mistakes了解不做小丑,红骷髅more.

ByHenri Steenkamp

Opinions expressed by Entrepreneur contributors are their own.

DC Comics

Riddle me this: Why do brilliant comic book villains make foolish mistakes? Plot reasons aside, you'd think they would know better. All it takes is one well-timed misstep for their master plans to crumble around them. Every. Single. Time.

Sure, we all root for the heroes, but that doesn't make bad guys' mistakes any less cringe-worthy. You can just look around the business world to see people make destructive but avoidable mistakes all the time. The comic book fan in me can't help but be reminded of the lapses in good sense that bring iconic villains to their downfall.

While an investor may not have his life or freedom at stake, there can be a lot to lose --potentially every cent-- when he or she slips up. Since villains have shockingly low success rates against their heroic nemeses, there's a lot we can learn from them about whatnotto do. Analyzing their mistakes and avoiding them may make you a smarter investor yet.

Here are some common mistakes of super villains, and how investors can overcome them.

1. Reckless ambition
It's important that investors are level-headed in their decision making, because what looks like a good investment on the surface may not be the case. If your desire to make fast money causes you to buy up stocks and overlook red flags, you could be in for a world of disappointment. While risk and reward go hand-in-hand, taking it to the extreme is dangerous, especially if you're being driven by raw ambition alone.

Villains make this mistake frequently; look at Red Skull, Nazi super soldier and mass murderer -- essentially Captain America's evil twin. Red Skull cares more about conquering the world and ruling unchallenged than he does about stopping Cap.

That's Red Skull's fatal mistake: blinded by his megalomania, he failed to realize the true threat that Steve Rogers posed. Also, he overextended his forces, forcing Hydra, his personal army, to prepare for world domination even as American forces were at their doorstep.

Clearly, Red Skull made impulsive decisions without much planning in a frenzied grab for power, caring little, if at all, about potential repercussions. In short, your actions need to match your risk appetite.

2. Failure to diversify
Diversification is a popularrisk management technique, and while you can certainly overdo it, putting your eggs in different baskets is strongly recommended. After all, if one or several investments don't pan out or the market suddenly shifts, the loss is smaller than it would be otherwise.

Comic book villains are notoriously bad at managing risk. Do you think Lex Luthor is planning on thwarting a dozen different heroes, or only Superman? Perhaps if he had numerous other projects underway, his constant losses to Kal-El wouldn't set him back so badly. Likewise, no matter how much you are emotionally invested in a venture, that diversity cushion can be the difference between staying stable or plummeting—like Superman without his powers.

3. Pride and Persistence
Persistence, though generally a positive trait, isn't always a good thing in finance, as skilled investors know when to fold. This means saying no to bad investments, forsaking failing ones, and adjusting strategy periodically, while unfazed by small events.

Take a look at Bane, the muscled man-mountain who famously broke Batman's back (but not his spine). Upon Batman's triumphant return to Gotham,where he rallied Gotham's police in a rousing attack on the League of Shadows, Bane, like many a comic book villain before him, was too proud to bow out of a battle. Rather than admitting defeat and withdrawing to fight another day, Bane made his last stand -- and died.

How many times has a villain announced his evil plan to his nemesis, just in time to be captured, killed, or jailed? As for pride, Bane's fatal mistake was that he left Batman alive -- just so Batman could watch the destruction of Gotham from afar. But he didn't count on Batman escaping and crashing Bane's party.

When you boast about your investments and play up your hand, you may stick to your bad holdings--because you don't want to admit you're wrong.

4. Choosing bad company
Henchmen aren't known for their smarts, and this contributes to the villains' ultimate failure. Whether it's an overly ambitious or weak-willed subordinate, the company they keep can be their undoing.

The same is true of investors: if you've got bad company stocks, it's a recipe for trouble.

The Joker is often accompanied by clinically insane underlings, the most prominent of whom is his psychologist-turned-squeeze, Harley Quinn. Though the two seem like a match made in Heaven, given Joker's own insanity, the opposite is true: Harley Quinn ruinseverythingwithher histrionics. Worse yet, she is a destructive force of nature to equal Joker, and the two battle each other more than they fight Batman. Simply put: Joker and Harley Quinn are too dysfunctional to be a good team, as one is abusive and the other is simultaneously subservient and defiant.

Just as villains with witless or untrustworthy underlings have had their plans derailed, if you have bad companies in your portfolio -- toss them.

5. Letting your emotions guide you
From Negan ofThe Walking Deadto deranged killer Victor Zsasz, many villains arenoted psychopaths who lack both empathy and emotion. But others -- like Poison Ivy, Catwoman, and Riddler -- are very emotionally motivated, namely by greed, resentment, or hatred.

In much the same way, the emotions that motivate bad investment decisions are primarily greed and fear.According to人类的基本情感也许是Investopedia。greatest enemy of successful investing."

As investor, you can't (and shouldn't) discard your humanity completely, but you sometimes need to set your emotions aside to make rational decisions. Everyone else will buy and sell based on emotional biases; overcoming these instincts will lead to sound investment decisions, and set you aside from the pack.

Obviously, comic book villains are the stuff of fiction -- investors make for much less interesting stories. But the best villains are rooted in the flaws of real humans. Their mistakes could easily be yours if you're careless.

Make sure you're informed, and you'll be far more successful than the feisty rogues of Marvel, DC, Image or any of the other worlds out there.

Henri Steenkamp

CFO of Saratoga Investment Corp.

Henri Steenkamp is CFO ofSaratoga Investment Corp., a provider of financial solutions to middle-market companies. Follow him onTwitterand read his thoughts on hisfinance blogandSouth Africa blog.

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