Stock traders are human, after all, and humans are sometimes irrational creatures -- creatures of emotions and hormones and complex subconscious mechanisms.
Various studies have suggested that a certain kind of psychological profile gravitates toward the fast-paced, high-pressure environment of the trading floor -- and that this profile probably has more than a little in common with psychopathic personality, a clinical condition marked by gregariousness, impulsiveness, dishonesty and lack of empathy.
A recent study from the University of St. Gallen, in Switzerland, goes one step further. The research, led by forensics expert Pascal Scherrer and prison administrator Thomas Noll, finds that professional stock traders actually outperform diagnosed psychopaths when it comes to competitive and risk-taking behavior.
According to Der Spiegel, Scherrer and Noll had a group of 28 stockbrokers participate in various simulations and intelligence tests, and then compared their results to a group of psychopaths.
They found that the traders showed a higher degree of competitiveness than the psychopaths -- and that the traders were surprisingly willing to cause harm to their competitors if they thought it would bring them an advantage.
It seems unlikely that recent market woes have been caused by an over-eagerness to take risks. Rather, the single-day market plunges of August and September appear to have been linked to widespread risk aversion among traders. In other words, fear, not boldness, has been the cause of the summer's major sell-offs.
Still, irrational risk-taking played a major role in the financial crisis of 2008, as thousands of questionable assets assumed greater and greater leverage in the market until they ultimately proved unsound.
Scherrer and Noll are not the first to suggest a correlation between success on Wall Street and mental pathology. In 2005, a study found that traders who are unable to fully feel their emotions due to brain damage end up performing better on the market -- possibly because they experience less anxiety about risky trades.
At the time, one professor of neurology described such emotionally impaired traders as "functional psychopaths."
Another research project that concluded in 1996 found that some percentage of both stockbrokers and politicians display many traits characteristic of psychopathic personality, including a willingness to take risks and an interest in wielding power.
And as Chris Barth at Forbes points out, Bret Easton Ellis was comparing stockbrokers with the seriously mentally ill as early as 1991, with his novel American Psycho.
While the financial profession may attract and reward a certain kind of irregular personality, there's evidence that the pressures of the job may also contribute to poor mental health. In 2001, a study found that many young Wall Street stockbrokers got little sleep, often reported for work even when suffering from the flu or a virus, and were much more likely to experience symptoms of depression than average Americans.
In fact, the study found a 23 percent rate of major depression within the group of young male stockbrokers -- significantly higher than the 7 percent depression rate among American men overall.