Tuesday, May 8, 2018

The Best Fund Managers Are Not Psychopaths

From the Society for Personality and Social Psychology, Oct. 19, 2017:

The Best Hedge Fund Managers Are Not Psychopaths or Narcissists, According to New Study
Key Takeaways:
  • Managers with Psychopathic Traits: Made less profitable investments than peers, by just under 1% per year, but this can add up over the course of years on large investments.
  • Managers with Narcissistic Traits: Took more investment risks to earn the same amount of money as less narcissistic peers.
Washington, DC - When it comes to financial investments, hedge fund managers higher in “dark triad” personality traits – psychopathy, narcissism, and Machiavellianism - perform more poorly than their peers, according to new personality psychology research. The difference is a little less than 1% annually compared to their peers, but with large investments over several years that slight underperformance can add up. The results appear in the journal Personality and Social Psychology Bulletin, published by the Society for Personality and Social Psychology.

While the average person doesn’t invest in hedge funds, “We should re-think our assumptions that might favor ruthlessness or callousness in an investment manager,” says Leanne ten Brinke, lead author and a social psychologist at the University of Denver. “Not only do these personality traits not improve performance, our data suggest that they many hinder it.”

Researchers from the University of Denver and the University of California, Berkeley, measured personality traits of 101 hedge fund managers, then compared the personality types with their investments and financial returns from 2005 - 2015. They compared not only the annualized returns, but also risk measures....MORE 
HT: MetaFilter who have a few related links:
It's a common trope that psychopaths have traits that also predict success on Wall Street and that they are perfectly suited for high finance. Or are they? Paper, press release, article, another article.
The authors note that the time period of the study included the global financial crisis, and "we cannot rule out the possibility that in other periods or contexts, Dark Triad traits may be related to better outcomes."

A smaller, less formal survey of high-performing funds managers came to a similar conclusion.... 
We noted the study last year in
"Contrary to stereotypes, study of hedge fund managers finds psychopaths make poor investors"
Here's the BPS version of  a story that flashed past the conscious - attention window a few weeks ago....
Beside the date of the press release another interesting point is the conflation of sociopathy with narcissism. Although not seeing much evidence for the successful psychopath trope, the prevalence of oversized egos/self-admiration/grandiosity in the fund business is undeniable.

Also at MetaFilter (and chosen for no particular reason):
"I don't want any boring old heraldry. I want something new, fresh."

Review--"The Wisdom of Psychopaths: What Saints, Spies and Serial Killers Can Teach Us About Success"
"Psychopaths in the Netherlands are different from psychopaths in the US"
"Why your boss' preference for black coffee could mean they're a psychopath"
The Upside of Lying, Cheating and Arrogance
Sodom, LLC: The Marquis de Sade and the Modern Office Novel
If You Think You’re a Genius, You’re Crazy
"New Study Suggests Not Sharing Laughter is an Early Sign of Psychopathy"

And on heraldry we've had:
Where In the World Is Izabella Kaminska?
There is a post on her personal blog, written as free verse quatrains and I think it's obvious she's trying to send us a message that the intelligence services can't easily decrypt... 
which was followed a couple days later with:

What Does Izabella Kaminska Mean with "Rawaici"?
Dizzynomics put up a post referencing Rawaici.
Schoolboy French reminds us that ici is "here", that's easy enough.
A bit of googling turns up the coat of arms of Rawa, Poland:

File:POL COA Rawicz.svg

A woman on a bear while another bear, apparently under the influence, admires a flower.

So..."Party Here"?

I believe Rawaici may be an invitation to a cocktail party to discuss riding out the bear market.

Or, longshot, if you're into heraldry and heraldic vexillology, it's simply:
Shield Or with bear Sable facing dexter, a maiden on its back.
The maiden, vested in royal attire Gules and a crown Or, with flowing hair and hands upraised and expanded, all proper.

 Out of the crest coronet, between two antlers proper, a bear facing dexter. His left arm in front is lowered, and another one holds a rose on a stem, all proper, which the bear carries to his snout.
 I'll probably stick with the first interpretation but note there isn't any respondez info.