Yes, I am a psychopath.

Written on January 3, 2012 by Eli Radke in Uncategorized

Nothing better to get the year started off right than to be called a psychopath. It is yet another reminder that academics, outsiders, and media do not understand how to judge risk.

Risk is not inherently good or bad. There are risks you take with good/full/complete information and those you take with bad/incomplete/skewed information. There are risks from a position of strength or a position of weakness. The information and the lenses in which it is viewed are what make it a good or bad risk, it has absolutely nothing to do with the outcome or amount gained or lost.

Risk starts immediately. Risk is there from the beginning, it does not start once loss is realized. Risk is ever present, the amounts change.

Repeatability. Anyone who takes risks in the financial setting must always take in account the repeatability in the circumstances in which they take the risk. Any schmo on the street can make 100k but a limited number can keep it. You can never stay a hero in this business till you are retired. Get it right or wrong once or a few times does not matter. Be careful in the praise and scorn.

I have not studied enough the reason for the economic collapse to have an answer for the writer but I am certain it is not because we are all psychopaths. There were several factors the least of which everyone was relying on housing prices to increase as they have since the beginning of time. There are always going to be bad apples and they are always going to be viewed as the norm by the outsiders. There are always risks that do not work out. Yes they broke the cardinal rule of risking taking, they lost their ability to take risk tomorrow but that does mean they are psychopaths.

I might be a psychopath but it isn’t because of risk taking. It is because I choose a profession in which at any moment I can be out of business or financial life be impacted negatively. I am different because I am comfortable with the uncertainty. I am willing to throw out everything I learned yesterday to be profitable today. Yes you have to be crazy to work with risk and you also have to watch how your emotions effect your view. Neither of which makes you a psychopath.

I am not complaining or bothered by articles like that, they are a risk I am willing to take to be in the best profession ever.

Source: http://www.bloomberg.com/news/2012-01-03/did-psychopaths-take-over-wall-street-asylum-commentary-by-william-cohan.html

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Anonymous

your points about trading and risk are spot on. However I think you are misinterpreting the comments regarding corporate psychopaths that created the financial crisis. That has to do with the CMO’s, CDO’s, and CDS’s and the ways in which wall street capitalizes on profits, etc.

They are not saying that investors and speculators are psycho. Not at all. It’s about systemic risks and how people with truly unusual personality traits are the ones that continually rise to positions to have great impact on those systems. Day traders aren’t even in the same galaxy.

http://traderhabits.com Eradke

Agreed, but they knew the risks or should have. They collected profit in the beginning. I agree there needs to be better oversight all around, self policing has not done very well. I think it starts from the top, legislation causes many unintended consequences.

Anonymous

that’s a part of it. And I think the other part, which this article and writer is addressing…is to start to realize that we glorify psychopaths in our capitalistic society. In other words, there needs to be perspective and proper balance when operating in capitalism. Macbeth for example (in Shakesepeare) is a near-perfect icon for corporate executives….and he clearly was insane with ambition and definitely behaved in psychopathic ways. These “executives” have similar characteristics (autistic patterns, no feeling for others, calculating human emotion, etc., etc.) and our society needs to stop REWARDING them and start to rehabilitate them. In trader speak….these executives seem to be very over-extended (think Bollinger Bands for example) in their use and interpretation of what is capitalism that our entire society is becoming unhinged from its bell-curve averages and thin tail risks (aka the middle class is falling apart). This is b/c these wall street executives have so much sway over financial markets and business unlike other corporations and businesses that have similar psychopaths in the c-suites. If this is an accurate portrayal of today’s economy and APPROACH to economy then we are in for some serious mean reversion!!! Can we soften that blow a bit through some policies like you mention as well as some changes in social conscience? I sure hope so!!!

Anonymous

another characteristic is an unusual amount of narcissism and inability to view the world through other people’s perspective. Think Newt Gingrich telling OWS to “get a job” and think Jamie Dimon totally dumbfounded as to why people are upset with banks. I mean it’s truly a psychological phenomena if not categorically insane.

Anonymous

your points about trading and risk are spot on. However I think you are misinterpreting the comments regarding corporate psychopaths that created the financial crisis. That has to do with the CMO’s, CDO’s, and CDS’s and the ways in which wall street capitalizes on profits, etc.

They are not saying that investors and speculators are psycho. Not at all. It’s about systemic risks and how people with truly unusual personality traits are the ones that continually rise to positions to have great impact on those systems. Day traders aren’t even in the same galaxy.
Your Daddy

There is a subclassification of psychopaths that focus their destructive
behavior only through sexuality, please check the sexopathy checklist
for more information