‘Psychotic’ Hedge Fund Managers Are the Worst Investors, Study Finds
Fri Oct 20 2017
Lucy Harlow (3326 articles)

‘Psychotic’ Hedge Fund Managers Are the Worst Investors, Study Finds

Want to succeed on Wall Street? Don’t be a jerk

The world of hedge funds is often a cut throat one, where manipulation is often considered just a part of the game. But a new study shows that the most aggressive, ruthless traders actually do worse than the ones who try a little tenderness.

The study, found in the latest issue of Personality & Social Psychology Bulletin, finds that hedge fund managers who exhibit ‘psychotic’ behavior (defined by healthcare professionals as someone who acts in a manipulative fashion for personal gain) had the worst investment records.

Researchers looked at 101 top hedge fund managers, with a collective $ 4.6 billion under management. The average return for the group from 2005 to 2015 was 7.27%. The biggest jerks, though—that is, the ones high on the psychopathy scale—were 0.88% behind the average.

Psychology professor Leanne ten Brinke of the University of Denver, co-author on the study, tells Bloomberg that the disparity could exist because the psychopaths are also narcissists who can’t admit when an investment isn’t working.

The study follows a 2016 report from ten Brinke and others that found psychopathic senators had fewer co-sponsors on their bills.

“More psychopathic individuals tend to be able to talk the talk, but not walk the walk,” ten Brinke told Bloomberg.

Lucy Harlow

Lucy Harlow

Lucy Harlow is a senior Correspondent who has been reporting about Commodities, Currencies, Bonds etc across the globe for last 10 years. She reports from New York and tracks daily movement of various indices across the Globe

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