“More psychopathic individuals tend to be able to talk the talk, but not walk the walk”
The most “psychopathic” managers had the worst investment records. Those who ranked in the top 16 percent on the psychopathy scale lagged the average by 0.88 percent per year. Narcissistic managers, meanwhile, turned in mediocre returns, but their clients had to endure more volatility to get them, according to the study. That might be because narcissism, associated with overconfidence, causes fund managers to stick longer with ideas that just aren’t working, ten Brinke said.
The new study flies in the face of earlier research that arrived at darker conclusions. Previous studies have shown that psychopaths often get promoted quickly in large organizations. They can come across as confident and charming, and are often very ambitious. Other research showed that people with psychopathic traits are more likely to want to be entrepreneurs.
However, some psychologists have shown that the quality of work exhibited by people with such tendencies can fall short. “More psychopathic individuals tend to be able to talk the talk, but not walk the walk,” ten Brinke said. Over time—and measured by an objective standard such as investment returns—their shortcomings can become glaringly obvious.
Psychopaths are also very difficult to work with, as one could probably surmise. Investing, like other fields, can require collaboration, listening to the ideas of colleagues, and hiring specialists to execute your strategies.
Last year, ten Brinke, Keltner, and others did a similar analysis of U.S. senators. They found that the more psychopathic senators had fewer co-sponsors of their bills.
“There’s good research to suggest psychopaths are poor leaders,” ten Brinke said. “If you put someone with psychopathic traits [in charge] of a group, they’re more likely to divide the group.”
This article was provided by Bloomberg News.