Chapter 1 II

Mastering the Moneyed
Mind, Volume II
Mastering the Moneyed
Mind, Volume II
The Bottomless Line—Important
Lessons they did not Teach you
in Business School
Dr. Christopher Bayer

Mastering the Moneyed Mind, Volume II: The Bottomless Line—Important
Lessons they did not Teach you in Business School
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Abstract
This volume, The Bottomless Line—Important Lessons they Did Not Teach
You in Business School builds on the key concepts in Volume I to draw
the reader’s attention to the “dark side” of the modern financial services
profession. Structured in a way that enables readers to examine contem-
porary examples of willful co-optation, misuse, and misinterpretation of
old texts and ideas, run-of-the-mill corruption, and dangerous group-
think, Volume II examines the personal and broadscale financial troubles
generated by reckless financial misunderstandings. Far from aiming for an
exposé, however, the chapters in Volume II paint a picture of the far side
of the moral scale, before laying out an action plan for hewing to the near
side, or the middle.
As part of a discussion of neuroeconomics and behavioral finance,
Volume II presents research showing that, physiologically, we are not
predisposed to be honest; we are, actually, designed to (only) be as hon-
est as our options. In order to avoid the guilt and moral disengagement
that comes with dishonesty, we must consciously commit to being hon-
est, especially when other people’s money is involved. The volume de-
tails the rise and fall of a few notorious Wall Street perpetrators—from
the brass at Enron to the infamous Bernard Madoff—and presents a
psychologist’s analysis of how their hard-wired psychopathy leaves them
bereft of moral qualities that are necessary to build a functioning and
responsive Gyroscope.
The author introduces summaries of recent research in the new field of
neuroeconomics, and true, fresh-from-the-field tales about money-mind
habits are complementary, thought provoking additions, that, intention-
ally, activate critical thinking and support reader analyses of the value of
mastering their own “moneyed” mind. Overall, the series features a com-
prehensive set of techniques and exercises taken from w estern and eastern
traditions to emphasize the mind-body connection, and the importance
of improving our emotional balance and peace of mind. In Book 2,
Dr. Bayer summarized recent neuroeconomics research, and forthcoming
books in the series will be updated with the latest as new research findings
become available.
vi ABSTRACT
Keywords
psychology; finance; neuroeconomics; behavioral finance; money; moral-
ity; Wall Street; increasing consumption; commerce; financial; econom-
ics; disbalancing; wealth versus money; corruption; materialism
Table of Contents
Foreword................................................................................................ix
Chapter 1 What They Did Not Teach You in Business School............1

Chapter 2 Lessons in Character: Sun-Tzu, Aristotle, Machiavelli......35
Chapter 3 Masters of the Universe, Children of a Lesser God...........53
Chapter 4 Deception and Psychopathy.............................................65
References............................................................................................121
About the Author.................................................................................125
Index..................................................................................................129
Foreword
The Bottomless Line—Important Lessons They Did Not Teach You in Busi-
ness School is Volume II of a multi-volume series titled, Mastering the
Moneyed Mind: A Wall Street Psychologist’s Guide to Surviving and Pros-
pering in a Money-Mad World. Written by Dr. Christopher Bayer, the
Wall Street Psychologist, the series aims at advancing thought in neu-
roeconomics and behavioral finance, and supporting financial literacy
teaching and learning at all corporate and educational levels. Each vol-
ume is undergirded by critical principles in psychology, neuroeconom-
ics, and finance, and offers meaningful strategies that reflect evidence
derived from more than 30 years of Dr. Bayer’s experience in psycho-
logical counseling and in examining the relationship between human
behavior and money.
The series is, purposefully, structured to build on the reader’s prior
knowledge of the psychology of money management, and aims at de-
veloping in the reader what Dr. Bayer calls a Gyroscope—an internal
mechanism for managing ethical behavior in life. Each volume features
critical topics aimed at engaging the reader in a myriad of scientific anal-
yses about the causes and contexts for money troubles—critical foun-
dations that precede practical techniques and solutions for overcoming
unhealthy money-mind habits. The volume preceding this one, for ex-
ample, sets the stage for fully valuing the concepts that will be presented
in subsequent volumes in the series.
Volume II offers the reader interesting stories behind the psychologi-
cal and ethical failures that precede (and often succeed) mass financial
failures to capture the essence of the topics that are relevant, even, to
curriculum politics. It advances the author’s theories about corruption on
Wall Street, and draws the reader into an exploration of how direct and in-
direct psychological conditioning eliminates morality from decision mak-
ing in the world of finance. Volume II refers the reader to the contents
of Volume I to exemplify the systemic corruption on Wall Street that are
x FOREWORD
worthy of deliberations in today’s business classrooms. Whereas Volume I

offers readers an examination of fiduciary responsibility, Volume II delves
into the concerns about fiduciary ir-responsibility, and leads readers to
the “big takeaway”: the need to cultivate and maintain a core of character
in order to weather any ethical storm.
There are those who are now reading this volume and are uncon-
cerned with such honest self-assessment. This volume may be one of
many that readers are scanning, perhaps to learn some psychological
short-cut to propelling themselves into a higher bonus bracket. Others
may plow through these pages, desperately wanting to discern some mar-
keting mind trick with which to further dupe their clients, managers,
firms. Those are not the author’s target readers. While Dr. Bayer is not
so self-enamored as to believe that all those who read this volume, abso-
lutely, must develop their own Gyroscope, this volume does invite readers
to invest their time and at least consider how to apply his techniques to
improve their circumstances—indeed, to improve themselves.
It is important to note here that, in his book Trading for a Living,1
Alexander Elder posits that successful trading is based on the three ‘M’s:
Mind, Method and Money. The key to winning in the market and on the
internal mental front (and within yourself ) is in your mind. As Elder ex-
plains, the proper method involves the development of discipline in order
to avoid emotional trading. This is but one aspect of The Wall Street Psy-
chologist’s Gyroscope, but a vital one. Dr. Bayer’s book reminds us of the
importance of the application of discipline where money is concerned.
Discipline is expressed via strict money management, which is paramount
in trading. Risk, too, is inherent in the concept of discipline, and as such
it should also be strictly managed.
Throughout the series, and especially in this volume, the readers
are also guided through the psychology of reputation, while dissect-
ing the complex, convoluted materialistic value system that drives the
Street’s collective conscious. These ideas are built upon a detailed list of
the most common mistakes brokers make—all derived from more than
30 years of Dr. Bayer’s observations and personal experience as a psy-
chologist. In essence, Dr. Bayer takes the reader through an exploration
1
Alexander Elder. 1993. Trading for a Living (New York: John Wiley & Sons).
FOREWORD
xi
of various archetypes and complexes to provide an understanding of

the financially related ethical mistakes to avoid. After all, being able to
identify the warning signs of danger is one way to avoid disaster down
the road.
Dr. Anestine Hector-Mason,

Managing Director, The Conscious Press, LLC.
CHAPTER 1
What They Did Not Teach

You in Business School
Much of what Financial Professionals (FPs) experience in real life is

not taught in business schools. Many FPs are codependent people,
with all sorts of psychosocial and self-esteem imbalances, defined
often by their obsessions about how much they make, how much they
manage, and how much they aspire to own or consume. For many,
it is all about exuberance, consumption, increase, excess, and aspir-
ing to the status quo—irrational goals that spurred their decision to
pursue an MBA, which often lead them to temptations that inspire a
downward spiraling of feelings of emptiness, and ultimately, fiduciary
irresponsibility.
Think for a moment how the public in our Wall Street culture per-
ceives and processes the sort of money that the top 30 hedge fund man-
agers make? What are the internal mechanisms these producers employ
to justify their pay? Where is the reality? Does reality even make a
difference? Perhaps this is surrealism at its finest; it is dreamlike and
hypnagogic.1 And yet it is what most prospective financial profession-
als aspire to—to accumulate as much money as they can in order to feel
as safe and strong as possible. Their sense of self is, often, synchronized
with their portfolio’s size and depth. This is frequently their inherent
existential problem, often an unconscious one, until it manifests into
the “thing” that drives them into psychological treatment, if not into
deep trouble.
Ultimately, the relationship between money and the mind is se-
rious business for us all, but most so for denizens of the financial
1
Referring to the liminal space between wakefulness and sleep.
2 MASTERING THE MONEYED MIND, VOLUME II
services industry, and for the schools that fuel their workforce. Yet,
the “understanding” of money imparted in today’s business school
curriculum does not even touch the edge of the psychological issues
that financial professionals experience; in fact, the curriculum tends
to focus on arithmetic not psychology, although human beings are
doing the arithmetic. In other words, “the humanity” is sidelined in
a profession that focuses, primarily on humans and their money—a
prevailing irony.
The better we understand money, the more we will be able to benefit
from our interaction with it. It is not that arithmetic of money is not im-
portant. It is; but today’s business school curriculum ought to go deeper,
and beyond the surfaces of additions, multiplications, and subtractions
and examine reactions, beliefs, attitudes and values toward those exer-
cises when (a) money is the “tool” or mathematical manipulative and
(b) the “condition” is real life. It has become more obvious that money
can govern dynamics of power, self-respect, fear, control, and freedom.
Money gives people enormous power and tactical control over others,
especially those close to them and beholden to them for professional or
personal reasons. Money inspires fear, respect, loathing, among other
things. When we “work” with money, it is more than mathematics that
we ought to consider.
But business schools today do not center on any of these issues; they
focus on money as an emblem of mathematics, with interest, not only in
how to manage and make it, but how to manage and make lots and lots
of it. The fact that there is such a thing as “inner experience” of money
makers and money managers that is worth examining does not appear to
be of important concern in today’s business schools. Experience taught
me that the inner experience of financial professionals is as important
as, and drives, their external comportment toward money and to me, it
would make sense for business schools to begin investing more time and
interest in looking closely into the emotional drivers that make financial
professionals tick; also important is inquiry into what motivates them,
where they come from psychologically, what early life forces conspired
to make them who they are—some or all of these forces will, ultimately,
define the struggles of graduates, especially when they become employed
in the modern financial services industry.
What They Did Not Teach You in Business School 3
The Modern Financial Services Professional

To remain consistent with my descriptions of the modern financial services
professional, it is important for me to restate some points I made in Volume I,
because such points are relevant to my discussions in this volume. It is also
important to note here that practitioners of the financial arts have long suf-
fered a dubious reputation in our culture. Consider, for instance, the roundly
negative, though certainly amusing, observations on money, the stock mar-
ket, and stockbrokers that Mark Twain, that salt-of-the-earth master of irony
and the vituperative arts, had to offer, for example. Then consider for yourself,
if the inherent messages from the past are relevant for discussion (or at least,
for more topical reference and consideration) in today’s educational arena.
In Mark Twain’s Notebook, on the subject of money, he wrote: “Some
men worship rank, some worship heroes, some worship power, some worship
God, and over these ideals they dispute and cannot unite—but they all wor-
ship money.” In Pudd’nhead Wilson’s Calendar, Twain pointed out a feature of
the stock market: “October: this is one of the peculiarly dangerous months to
speculate in stocks. The other are July, January, September, April, November,
May, March, June, December, August, and February.”2 In the same work,
Twain offered the equally droll line: “There are two times in a man’s life when
he should not speculate: when he can’t afford it and when he can.”
In his work Daniel in the Lion’s Den—And Out Again All Right, pub-
lished in Californian in November 1864, Twain takes several clever swipes
at stockbrokers:
I consider that a broker goes according to the instincts that are in

him, and means no harm, and fulfills his mission according to his
lights, and has a right to live, and be happy in a general way, and be
protected by the law to some extent, just as a better man. I consider
that brokers come into the world with souls—I am satisfied they
do; and if they wear them out in the course of a long career of stock-
jobbing, have they not a right to come in at the eleventh hour and
get themselves half-soled, like old boots, and be saved at last? (p. 1)
2
In fact, Wikipedia now documents the “Mark Twain Effect” as the phenomenon of
stock returns in October being lower than in other months. The ’29, ’87, and ’08
crashes occurred in the month of October. Seems Mark Twain was on to something.
Twain and others have

Sounds Familiar?
long taken their swipes at
Excerpts from: Elder, Alexander. the denizens of the Street,
1993. Trading for a Living: Psy- and the themes that are re-
chology, Trading Tactics, Money suscitated from their con-
Management. New York: John cerns are, namely, embrace
Wiley and Sons, Inc. integrity, and rediscover
virtue. And there may be
“Emotional decisions are lethal to
some credence to their char-
the markets…” (p. 40)
acter assassinations. When
“Technical analysis is applied social one defines the concept of
psychology … it aims to recog- the Wall Street professional,
nize trends and changes in crowd should character, virtue, and
behavior in order to make intel- integrity be requisite compo-
ligent trading decisions….” (p.5) nents of that definition? The
“The first goal of money manage- fundamental purpose of this
ment is to insure survival…” multi-volume series is to en-
(Study Guide, p. 134) able the reader to develop a
sound Wall Street Psycholo-
gist’s Gyroscope as a means
of facilitating long-term personal and professional fulfillment. And so,
this volume is not for everyone on the Street.
Those who seek out my professional advice are not sinister, narcissistic
financial psychopaths. They are well aware of their struggle with demons,
which are manifestations of the fact that they have simply lost their way.
That is why, when they enter treatment, I start by asking my clients to
see if they can detect semblances of character, virtue, and integrity within
themselves and their background. We then build on these perspectives
and engage in the treatment process.
What They Did Not Teach

Why did you get into this business? Think back to your MBA program.
Obviously, a career path that led you into the financial sector must
have been motivated by intimations of affluence. But was money a
reason you went to business school? Or was it the reason you opened
this door and stepped through? If your entire professional life has been
predicated on the pursuit of money and power, your life plan has a
fundamental flaw. Sure, business school can equip you to be a success-
ful business professional. But you need to look deep within yourself to
uncover what will truly make you happy—or at least keep you from
being totally miserable.
Enrolling Students Undaunted by Downturn
MBA programs were bracing for the worst in the fall of 2009 as the
United States was struggling to exit a recession. According to an article
in Bloomberg Businessweek magazine,3 “A damaged brand, a shortage
of jobs, and questions about Return on Investment (ROI) all threat-
ened to send admitted students away from business school and into
the relative stability of the workforce (p.1).” As Bloomberg Businessweek
reported, though, much to the relief of many an admissions officer,
fears of mass student defection were never realized. “Far from it. Flying
in the face of many predictions, 2009 enrollment actually soared at top
schools. Students accepted their offers of admission in unprecedented
numbers, leading many programs to enroll more MBAs than ever in
this year’s entering classes.”
The reasons for the higher-than-expected enrollment are unclear, but
the statistics demonstrate that in the wake of the most dramatic economic
downturn since the Great Depression, business schools are seemingly bul-
letproof. The fact that top schools have seen the biggest gains suggests that
prospective students may be opting for B-schools they believe will provide
the best ROI in a tough economy. What they also subtly indicate is that
many applicants may have opted to wait out a jobless recovery while get-
ting a degree that will make them more attractive once the employment
picture improves. In a sense, this is counterintuitive to the hard reality of
the industry, because many of the real lessons that need to be learned—
or at least impossible choices that need be navigated—are not accessible
through the oft-antiseptic filter of business school.
3
Bloomberg Businessweek. October 8, 2009. “Business School Gets Crowded.”
The Limitations of an Education in the Abstract
Business school does not teach courage or imagination, nor does it i nstruct
in the ways of intuition—how to be aware of, and leverage i nstinct. Being
a savvy judge of character—that is, combining the ability to assess peo-
ple based on their past and to trust them to behave uniformly in the
future—is a trait that cannot be taught. MBA programs, in short, do not
teach people how to survive and prosper in a world riddled with money
madness, multilevel stress, emotional abuse, betrayal, deception, and fear.
Once you finish B-school, you need to construct and implement your
own gyroscope as the basis of your emotional and professional balance.
But why do not B-schools teach you this? What ought they to teach?
Some experts might argue that all school curricula should be rigorous
(Gleason 2004), contextualized to learner experiences (Dirkx & Prenger
1997), designed to reflect contemporary business needs, or they must
include topics that reflect real life (United States Department of Labor
1991). But what are those needs and experiences? From whose perspective
do we begin to define “real life?” How should business schools prepare an
inclusive education? According to Gadis (2000), “America’s graduate man-
agement programs are trying to be all things to all constituencies. Which
means they’re serving nobody well” (p. 1). What we do know is that cur-
riculum development is multifaceted; not only books and thought in the
respective subject area ought to be considered. Labor market trends, stu-
dent needs and interests, subject matter/content, meaningful assessment,
and also business needs are important areas of consideration.
Let us examine, the issue of business needs, for example. In “What
Business Needs from Business Schools” Doria, Rozanski and Cohen
(2003), state that “cookie-cutter programs are producing look-alike
MBAs. Contemporary companies want creative, collaborative thinkers
and leaders” (p. 1)—a broad commentary that indirectly addresses the
state of the landscape of business school curricula in the United States that
promote foundational curricula requisites (e.g., finance, microeconomics,
accounting, management, marketing) that center on the manipulation of
numbers and money, and not interrelations with people. Back then, the
authors called for reform; “business schools should require more courses
in communication, leadership, human resources, psychology…” (p. 22).
Seventeen years after the

What Business Needs from
call for reform, not much has
Business Schools
changed, not to mention the
2008 crisis on Wall Street, Doria, Rozanski, & Cohen (2003)
that, if nothing else, should
have spurred an MBA curric- 1. Require more courses in the “peo-
ulum development paradigm ple skills” that are vital to manag-
shift, with an infusion of eth- ing effectively.
ics courses in all curricula ele- 2. Emphasize the basic skills and
ments, and more experiential tools needed for problem solving.
content (Berry 2009) that 3. Provide strong grounding in theo-
will enable MBA students to ries of economics, measurement,
gain real life work experience governance, psychology, human
concurrent with classroom behavior, and leadership.
learning. Of course, many 4. Design curricula so that students
business schools today offer can learn—by doing—to apply
courses in the legal perspec- multiple disciplines on the job.
tive of ethics aimed at re- 5. Encourage students to take elec-
minding students to refrain tives outside the traditional core
from breaking the law. Even curriculum.
so, it is a sound moral com- 6. Create differentiated curricula and
pass that enables an ethical allow students to concentrate in
leader to rise above the need specific industries.
to exploit the limitations of
legal and ethical ambiguities for his or her own benefit, and to the detri-
ment of his or her clients.
Also important to discuss here, in terms of the need for a para-
digm shift in business education, is the need for professor/instruc-
tor training and professional development, because subject matter
expertise is not the same as instructional or pedagogical expertise. I
am guessing that many business school professors are subject matter
experts with high intellectual competences in subject areas that they
never, actually, performed in. As we are all reminded in linguistics,
competence without performance is almost useless. If we have knowl-
edge of a subject and have not had the opportunity to perform such
knowledge, we remain constrained by the limits of the knowledge we
accumulated, and can only relay what we have developed from books
and not experience.
This is not to “knock” business school professors; many are excellent,
and of course, not all need to have practical experience in the business
world to be excellent in their work. Additionally, limitations in teacher
training and professional development are serious national problems, if
not international, in all subjects. Things are such that people enter the
teaching profession with high knowledge, and low experience, in the con-
ditions of the field in which their pupils are to engage. The issue is a real
one, and I will not be surprised if that is also part of the issue in business
schools—many professors are very knowledgeable educators, not experi-
ential ones who have had sufficient experience in the real world. I believe
that many may be engaged in lifelong learning as a form of professional
development, but often that is only an exercise in more reading, not par-
ticipating in real life business endeavors.
I must also add here that the learners in B-school are adult learners,
and I would be surprised if B-school educators touched one book on
the theories of adult learning (Merriam and Bierma 2013) to fully un-
derstand the difference in teaching and learning of adults. There are vol-
umes of scholarly work that delve deeply into how adults learn4 (Knowles,
Holton, and Swanson 2011) and cover topics such as adult psychologi-
cal development, and the importance of differentiated instruction and
self-directed learning. A full understanding of some of these works will
enable B-school educators to gaze into the psychology of their pursuits,
including the psychological factors that can serve as barriers or motivators
to achieving a balanced gyroscope. Criterion behavior may be at the ful-
crum that will enable them to balance all aspects of their responsibilities.
Criterion Behavior
Criterion behavior focuses on what you (the individual person) bring to

the table. Your imagination, inventiveness, communication skills, cognitive
skills, productivity, work ethic, character, personality, courage, self-respect,
4
See Knowles, M.S., E.F. Holton, III, and R.A. Swanson. 2011. The adult learner.
Oxford, UK: Taylor & Francis; Merriam, S.B., and L.L. Bierma. 2013. Adult learning:
Linking theory and practice. San Francisco, CA: Jossey-Bass.
and respect for other people are paramount for life success. This, ultimately,
is much more important than what your father does for a living, your zip-
code, or the “reputation/rating” of your college. These factors can be very
important in terms of networking opportunities and social connections.
But when the “pedal hits the metal,” we all have to ultimately drive on our
own. In essence, what you actually do defines your value. Criterion behav-
ior allows us to stand on our own, be self-sufficient, and own responsibility
for our actions. It places the control of our life in our hands.
Lionel Logue is a brilliant example of the criterion behavior model.
In The King’s Speech he restores England’s King George VI’s confidence
and courage to lead his people during World War II. Morale is such a
critical factor in war, both in terms of actual combat and in terms of sur-
viving the perils and anguish of armed conflict. Logue was not university
trained, nor was he a certified speech therapist. Hailing from Australia
where he was a professional actor and elocutionist, he innovated many
original techniques to help returning World War I veterans overcome shell
shock and literally restore their voice so they could function in society. He
emigrated to London in the 1920s and “set up shop” on Harley Street.
King George’s wife found Logue, and subsequently his original and very
creative treatment techniques restored the King’s voice. The rest is history!
In line with this, Steve Jobs (1955–2011) is one of the greatest examples
of twenty-first century criterion behavior —the story of which I documented
in “Criterion Behavior: The Shareholder’s Creed” on TheShareholderActivist
.Com, and summarize in this paragraph. He left Reed College after one
semester, and founded Apple Computer with Steve Wozniak when he was
21 years old. Jobs had a burning desire to create and achieve. He was clearly
on another dimension. He was born in San Francisco. He was adopted at
birth and moved to Silicon Valley when he was 5 years old. His father was a
machinist, and his mother was a payroll clerk. His birth parents were gradu-
ate students at the University of Wisconsin; his father was Syrian, and his
mother was an American of German descent. The rest is history!
Keep in mind, Mark Twain (1835–1910) stated: “I never let my
schooling interfere with my education.” Formal education is very im-
portant; passions are critical. They should be encouraged and supported.
Passions are the emotional drivers for a sound and expansive education.
Passions are the true stuff of dreams.
All learners need to be inspired, supported, and encouraged to think

independently and bring their own unique skill sets, aspirations, and tal-
ents to the table. Way back when, the government told us the following:
We believe, after examining the findings of cognitive science, that

the most effective way of teaching skills is in context. P
lacing learn-
ing objectives within real environments is better than insisting
that students first learn in the abstract what they will then be ex-
pected to apply. (United States Department of Labor 1991, p. 16)
In other words, while it is important to prescribe curricula, as most

schools do, sufficiently differentiating instruction to enable students
to align such curricula with their own professional interests outside
the constraints of the classroom might help to generate more theoreti-
cal d
iversity in leadership, with less “cookie-cutter” graduates (Doria,
Rozanski, & Cohen 2003), that, in many ways, are unable to inspire
change in the financial profession.
Psychological Trauma: Trapped and Deteriorating
Any MBA graduate will attest to the serious mental effort that is needed
to get the vaunted degree, but that is nothing compared to the demands
made on people’s value systems by the cold pragmatism and soul-twisting
compromise often needed for survival and success on the Street. Not long
ago, I counseled a young man in his late twenties, a recent graduate of a
prestigious MBA program, who had succeeded admirably academics-wise,
but admitted to being entirely unprepared for the intensity of pressure
and the impossible situations he faced daily in his position with an elite
Wall Street firm.
Contrary to popular opinion, an MBA degree is neither a winning
lottery nor a cash card. With luck, it is more of an admission ticket. It will
get you into the party, but once there, you are on your own. That inner
world will challenge your core values, your assumptions; it will test your
coping mechanisms. Some can hide in a self-created mental bubble for a
time, but it all comes out in the wash.
After a relatively successful stint selling whole life and annuity
products for the insurance division of a major bank, this young man
was lucky enough to land a much more lucrative position selling spe-
cialized financial products. Because this was his intended goal when
he entered the MBA program, the new position seemed like a natural
progression along his career trajectory—until, that is, he ran into one
of the many features of the Street they seldom prepare you for: the
boss from hell. The young man was required to work six 14-hour days
per week, late into the evening most of the time. To boot, he did not
receive the bonus he understood he was promised—entitled to—based
on his performance.
Many people on the outside, looking in, may wonder why he simply
did not get another job. If only it were that easy … You see, despite the
lack of a bonus, he was receiving a salary well in excess of what he could
command elsewhere, and he knew this. His personal financial commit-
ments well in place, he could not take a step down money-wise. He could
not relocate because of his family situation. And Wall Street is a very small
place—your history follows you.
In short, he was trapped, and slowly began to deteriorate. His stories
of psychological trauma mounted, as did his claims of deep depression
and emotional abuse. Increasingly desperate, he actually solicited my ad-
vice on how he could defraud his employer on disability, unemployment
insurance, and severance, expecting me to co-conspire with him. This is
an extreme example of a noxious professional climate you would not hear
about in B-school.
The Smartest Guys in the Room?
Hubris, narcissism, and extreme class-consciousness permeate Wall

Street at all levels, and business school is the incubator of this ecosys-
tem. It is there that future graduates are invisibly hamstrung by the
mind trap that is their sense of entitlement. The Gyroscope approach
requires that the individual remove these blinders and embrace humil-
ity, which in turn brings clarity. The humble individual can think more
objectively and, if necessary, reverse course more easily than the over-
confident narcissist.
In a 2008 New York Times opinion piece, American humorist C alvin
Trillin offered an interesting take on the genesis of the Wall Street
debacle.5 Waiting for a friend in a New York City pub, Trillin struck up
a conversation with a neighboring barstool occupant about the finan-
cial collapse. The fellow imbiber, a Wall Street veteran, was convinced he
knew the source of the market’s implosion. “I’ll tell you what happened,”
he said before going bottoms up on his tonic and gin. “Smart guys started
going to Wall Street.” Then he expounded:
...one of the speakers at my 25th reunion said that, according to a

survey he had done of those attending, income was now precisely
in inverse proportion to academic standing in the class, and that
was partly because everyone in the lower third of the class had
become a Wall Street millionaire.
“Did you ever hear the word ‘derivatives’?” he said. “Do you think
our guys could have invented, say, credit default swaps? Give me a
break! They couldn’t have done the math.”
“Why do I get the feeling that there’s one more step in this
scenario?”
“Because there is,” he said. “When the smart guys started this
business of securitizing things that didn’t even exist in the first
place, who was running the firms they worked for? Our guys! The
lower third of the class! Guys who didn’t have the foggiest notion
of what a credit default swap was. All our guys knew was that they
were getting disgustingly rich, and they had gotten to like that. All
of that easy money had eaten away at their sense of enoughness.”
“So, having smart guys there almost caused Wall Street to collapse.”
Wall Street is a sophisticated environment that can be wildly lucrative

for many, and attracts some of the brightest minds on earth. Yet money
has a seductive power that can lull the individual speculator, or even large
groups of them, into a false sense of security. And it is not just Trillin
who makes this observation. Fortune reporters Bethany McLean and Peter
Elkind, in “Enron: The Smartest Guy in the Room” chronicles the 2001
collapse of Enron and the subsequent criminal trials of top executive,
5
Trillin, C. October 14, 2009. “Wall Street Smarts,” The New York Times.
pokes fun at the inability of seemingly brilliant minds to avoid the most
notorious collapse in the annals of corporate America.
Pride Goeth Before Destruction
…and a haughty spirit before a fall.6 In no segment of society does this adage
apply as perfectly as it does in the milieu of Wall Streeters. How is it that
the brilliant economic theorists from Harvard, MIT, and Caltech make epic
mistakes? How is it that so many astute business minds, fixated obsessively
on the minutiae of the market, fail to see the massive hurricane bearing down
on them—subsumed until they are consumed? They should know better.
Based on my experience counseling Wall Street professionals, the rea-
son these brilliant minds fail to act is the very reason they are drawn to
Wall Street in the first place, like so many greedy moths to a lantern.
That reason is money and the vastly manipulative, mind-warping power
it has over the human psyche. Many of the greatest financial minds of our
time have been drawn asunder by the mentality of a herd driven by an
insatiable thirst for huge profits and the insane risks they imply, in turn
jeopardizing the stability of global markets.
Less than 2 years post the catastrophe that was 2008, as the fragile
economy recovered bit by bit with each closing bell and Washington
rattled its reform saber and major investment conglomerates warded off
shareholders’ litigative volleys and stakeholders’ insurrections—had a
genuine culture of change taken hold of the Street?
Crain’s New York Business columnist Hilary Potkewitz reports:7
“The scent of money that drew many professionals to jobs on Wall

Street has been dissipating, according to a survey of out-of-work
finance folk released Wednesday.
The survey of financial job-seekers, conducted by financial recruit-

ing service OneWire.com, showed that 41% of those polled said
they no longer believe finance to be as desirable a career path as
they once did.
6
The King James Bible, Proverbs 16:18.
7
Potkewitz, H. December 17, 2009. “Jobless Wall Streeters Sour on Finance Careers,”
New York, NY: Crain’s New York Business.
Contrast that to the firm’s June survey, when 84% of respondents

said they would still choose a career in finance if given the chance
to “start over” in their professional lives.
OneWire.com attributes the disparity to the different phrasing of

the questions in the survey—and to the proposed caps on bonuses
and pay packages that have been floating around C ongress
recently.”
And as the storm subsided and the blood was once again back
in the water, did the sharks resume their frenzy? Silly question—of
course, they did. The real question is: do you have a sense of your own
Gyroscope—the one that will allow you to stay above the fray and out
of the maelstrom?
Fiduciary Ir-Responsibility
I wonder what Scottish historical novelist and poet, Sir Walter Scott,
would say of the oft-insidious nature of the financial services landscape;
he who wrote the immortal words: “Oh, what a tangled web we weave,
when first we practice to deceive!”?8 Perhaps nowhere on Wall Street are
these webs so intricately woven than when it comes to the subject of
fiduciary responsibility.
Fiduciary responsibility is a fundamental concept in this industry. Ul-
timately, to be successful and reputable, the financial services professional
needs to understand and practice his fiduciary duty both in technical and
emotional terms. Fiduciary responsibility is essentially a structured legal
and moral relationship of trust and confidence entered into by the client
and service provider. In this relationship, the broker is the fiduciary or
trustee, and the client is the principal or beneficiary.
At all times the fiduciary must act in good conscience and faith for
the benefit of the principal. The fiduciary is required to protect and be
loyal to the principal. The principal’s interests come first. The behavioral
standard for this type of relationship is extremely high and inviolate.
8
From Marmion, C. 1808. VI. Stanza 17. Marmion is an epic poem by Walter Scott
about the Battle of Flodden (1513).
Thinking of Someone Else’s Needs
In an industry in which Greed is good, fiduciary responsibility seems al-

most counterintuitive, sort of akin to asking for selflessness in a country
that prizes selfishness. Yet fiduciary responsibility is the law of the land.
That is why establishing a strategy for maintaining, reconciling, and, if
necessary, rehabilitating your personal understanding and application of
fiduciary responsibility is an important component of The Wall Street
Psychologist’s Gyroscope.
This is easier said than done, because fiduciary responsibility gov-
erns the relationship between two individuals (or an individual and
an institution) within the pressurized context of a financial affiliation
susceptible to myriad factors. For instance, the fiduciary must be able
to take criticism, which may sometimes be irrational, harsh, and even
abusive. The fiduciary must listen to and process the client’s fears,
anxieties, grievances. Since one should never take his/her client for
granted, acknowledging the client’s dignity, worth, and value is para-
mount at all times. Never minimize client concerns. The very act of
listening to a client’s grievances strengthens the relationship. In fact,
it is required and as such is part of the psychological mechanism that
cements the partnership and makes it stronger and more human. After
all, you are managing one of the client’s most precious possessions: his
or her money!
As I explain further in the book, in treatment I focus on reacquaint-
ing my clients with ideals such as virtue, integrity, and honesty. Recon-
necting with these concepts is necessary for restoring appreciation for the
necessity of fiduciary responsibility, especially as it is that much more
difficult to navigate because there is no central document to apply. While
the Securities and Exchange Commission and other regulators incorpor-
ate mentions of fiduciary responsibility into various rules and regulations,
there is no definitive, industrywide statute governing its application. So,
while there is general consensus on the core theme of fiduciary respon-
sibility, how it is specifically applied by individuals and the institutions
for which they work can vary greatly. In lieu of some form of standardized
industrywide rehabilitation initiative, I have developed a simple Fiduciary
Responsibility Affirmation Exercise, detailed further in Volume IV of this
series;9 a glimpse of my concerns about fiduciary responsibility is pro-

vided in the next section.
Increasingly Difficult to Hide
In his book, Crisis of Character,10 author Peter Firestein alerts us to the fact
that in the Internet age, there is no place for a corporation or an individual
to hide. In today’s world, corporations and individuals do not, and never
will again, exist in a social vacuum. Hence, reputation and character are
assets requiring effective management. Today’s world requires candor and
transparency. The FP is ever more the hero to his clients, because he has to
guide his Gyroscope through a sea storm of deception, betrayal, and the
need for accountability on a daily basis. This means that effective groom-
ing and maintenance of character and reputation yields not only moral
rewards, but can also produce higher, more consistent dividends and
compensation. When considering fiduciary responsibility, there are other
important and relevant concepts addressed by Firestein that indicate just
how complex sticking to the mandate of fiduciary responsibility can be:
• Bribery: “…doing the right thing is not always consistent with

a company’s sustainability. Bribery, for example, has been an
unavoidable cost of doing business at many times and in many
places.” (p. 74).
• Core values: “Everyone in an organization must understand what
it wants to be known for. Core values lie at the center of this un-
derstanding, but they are not the company’s identity. They are,
however, the material out of which its identity, and therefore its
reputation, are created. And core values, to be worth anything at
all, must remain constant regardless of whether a company’s cir-
cumstances are prosperous or difficult.” (p. 127).
• Credibility: “Credibility rests on consistency in communication,
actions, and results.” (p. 202).
9
See Volume IV—Fiduciary Responsibility Affirmation Exercise.
10
Firestein, P. November 2009. Crisis of Character: Building Corporate Reputation in
the Age of Skepticism. New York, NY: Union Square Press.
• Emotional positioning: “A crisis only becomes a crisis when it

begins to damage people or the things they care about. When people
see or feel loss, they become emotional…communication in a crisis
must … contain an emotional component—not just facts.” (p. 242).
• Ethics: “Value systems and codes of conduct stand on foundations
of ethics. The potential damage from unethical conduct is enor-
mous.” (p. 135).
Financial services professionals should think on these concepts and inte-

grate them into their Gyroscope to ensure safe passage on their long journeys.
Still, acting with fiduciary responsibility may not always come naturally or
easily. After all, evolutionary biology would seem to suggest that there is an
inherent conflict between the FP’s and the client’s needs: helping another
person “survive” by achieving prosperity, especially when you are not yourself
gaining in equal measure, goes against many of evolutionary biology’s tenets.
Fiduciary responsibility or lack of it is a slippery slope, and once a
broker starts his descent into the abyss, he will have a difficult time recov-
ering his integrity. Embracing dishonesty as a business practice, overtly or
through omission, means the broker makes himself susceptible to guilt,
remorse, suspicion, stress, self-hatred, anxiety, fear, and so many other
undesirable, unsettling feelings.
Some financial professionals may shrug off their moral responsibilities
at first, but they will never be able to truly shed them. The disrespected,
unheeded responsibility simply works its way deeper and deeper into your
psyche until it manifests itself in—you can count on it—nasty and un-
fortunate ways. One has to examine the concept of codependency to get
a better sense of what is really happening.
The Characters of Codependent People

It is important to discuss to touch on the idea of codependency here,
although Chapter 3 provides a deeper discussion of the idea, and offers
the reader options for breaking free from codependent relationships.
Some people’s self-esteem becomes so intertwined with money that when
they suffer major losses, they entertain suicidal thoughts as a function
of shame, humiliation, and helplessness. If you perceive your essential
human value as a function of your net worth, your compensation pack-

age, or your production as compared to your colleagues, then your sense
of self is easily threatened by external forces; panic and even terror can
set in when the market is not going your way. Of course, markets change
constantly, regardless of what you do, unless you are a market maker,
shaker, or mover.
A list11 of characteristics of codependent people follows:
• An exaggerated sense of responsibility • A sense of guilt when asserting

for the actions of others themselves
• A tendency to confuse love and pity • A compelling need to control others
with the tendency to “love” people they
• Lack of trust in self and/or others
can pity and rescue
• A tendency to do more than their • Fear of being abandoned or alone
share, all of the time • Difficulty identifying feelings
• A tendency to become hurt when • Rigidity/difficulty adjusting to change
people do not recognize their efforts
• Problems with intimacy/boundaries
• An unhealthy dependence on relation-
ships. The codependent will do any- • Chronic anger
thing to hold on to a relationship; to • Lying/dishonesty/deception
avoid the feeling of abandonment
• Poor communication
• An extreme need for approval and
recognition • Difficulty making decisions
As noted earlier, Chapter 3 offers a deeper look at codependent rela-

tionships, including interoffice dysfunctional relationships, the constrict-
ing influence of money, unbreakable bonds codependent of production
for self-validation, and some techniques for breaking free.
Channeling “Irrational Exuberance”

One of the fundamental goals of The Wall Street Psychologist’s Gyroscope
is to inspire the financial professional to inject discipline into his or her
life. From how you speculate on potential investments to how you man-
age client relationships; from alleviating stress to improving diet, control-
ling substance abuse, and making positive strides in any number of several
areas that collectively comprise your life—your Gyroscope is your toolkit
11
List compiled by Mental Health America, formerly known as the National Mental
Health Association.
of best practices for wellness. Developing your own will not protect you
from harm psychologically or physically, but as you make the effort to
add this sort of organization and discipline to your life, you are in a better
place for avoiding many of life’s threats.
So, when you come across something that seems too good to be true,
hopefully your Gyroscope has enabled you to recognize that, indeed, it is.
Too Good to Be True?
Investors have long been susceptible to the “too good to be true”-based

herd enthusiasm. In fact, the real estate debacle of the early twenty-first
century is just one of several major bubbles to have occurred throughout
history. Consider the case of John Law, a Scottish businessman and macro-
economist. Law engineered the Mississippi Scheme, which created a trade
monopoly in the Louisiana Territory in early eighteenth-century France,
later known as the Mississippi Bubble. This delightful moniker referred to
the wild speculation of shares in the Mississippi Company, which was felt
to have the wealth of Louisiana trading prospects. Investors in the Missis-
sippi scheme were paid out in paper bank notes not backed by true coinage.
As such, they were inflationary and ultimately became depressed in value.
The Mississippi Company was a brilliant marketing scheme. It had
to be, as the enterprise had no true earnings to attract the interest of
level-headed investors. After all, financial systems based on paper money
depend on the confidence in the currency issued (printed) by its monetary
authorities. Law’s position, quite similar to Aristotle’s thinking, was that
money was primarily a medium of exchange which did not constitute
wealth in itself. He also contended that a nation’s wealth depended on
trade. Shareholders of the Mississippi Company were overly optimistic;
they thought they would be rich “nearly overnight.” Alas, the Mississippi
Company was too good to be true. Other bubbles have inflated and
popped throughout history, driving markets to excessive highs and—
ultimately, inevitably—spiraling lows.
Tulip Mania and Alan Greenspan
The first bubble documented by an economist was known as Tulip Mania

and happened during the Dutch Golden Age, in the 1600s, when tulip
prices soared and then collapsed abruptly. In 1637, some tulip bulbs sold
for 10 times the annual income of skilled workers, and a rare Semper
Augustus bulb was traded for as much as 12 acres of land. The madness of
the bubble is clear when intrinsic value and asset prices have no genuine,
rational relationship to each other. In 1841, Charles Mackay, a British
journalist, wrote Extraordinary Popular Delusions and the Madness of
Crowds, which immortalized Tulip Mania and documented it as the first
speculative, or economic, bubble.
Such mass self-delusions are perfectly encapsulated in the term ir-
rational exuberance, popularized and perpetuated throughout the media
ever since it was uttered by former Federal Reserve Board Chairman Alan
Greenspan in a complex speech titled “The Challenge of Central Banking
in a Democratic Society.”12 Greenspan specifically said: “But how do we
know when irrational exuberance has unduly escalated asset values, which
then become subject to unexpected and prolonged contractions, as they
have in Japan over the past decade?”
Greenspan went on to add: “We as central bankers need not be con-
cerned if a collapsing financial asset bubble does not threaten to impair
the real economy, its production, jobs and price stability.” The speech was
delivered as a warning that the market, which at the time was experienc-
ing an unprecedented boom, just may be overvalued. The speech is no-
table not so much for its delivery, but rather for the fact that immediately
following that delivery, it elicited a stunningly negative effect on stock
markets around the world. Those markets quickly recovered, though we
have since seen two cyclical downturns—evidence that investors did not
follow Greenspan’s warning.
Commenting on the genesis of the term in his 2007 autobiography
The Age of Turbulence: Adventures in a New World, Greenspan wrote: “The
concept of irrational exuberance came to me in the bathtub one morning
as I was writing a speech. (p. 176). The phrase was also borrowed by Yale
professor Robert Shiller, who in 2001 wrote an excellent book on the
subject, titled, not unexpectedly, although somewhat underwhelmingly,
12
Delivered December 5, 1996, before the American Enterprise Institute at the
Washington Hilton and televised globally by C-SPAN.
Irrational Exuberance.13 In 2006, The Daily Show with Jon Stewart dedi-
cated an entire episode cleverly dubbed An Irrationally Exuberant Tribute
to Alan Greenspan to Greenspan’s retirement.
Irrational Exuberance is less a clever turn of a phrase and more a very
real symptom of an overenthusiastic, overspeculative market. Due to myr-
iad complexities, it is, of course, very difficult to gauge irrational exuber-
ance, but understanding the emotional and sociobiological drivers behind
the phenomenon is crucial.
Psychological Drivers of Irrational Exuberance
Let us liken irrational exuberance to the rising tide of a stream. Most are
not able to identify irrationally exuberant market trends until the current
thickens to the point at which you are unable to go upstream or down-
stream. You are cooked, fried, terrified, mad. Following is a list of factors
that, based on my case experience, drives irrational exuberance:
• Insecurity: Decision making in instances of uncertainty is often

driven by issues with self-identity. So as to be able to deal with
feelings of paralyzing insecurity, some people will overcompensate
with aggressive behavior. Also, those with self-control issues tend
to seek to overcompensate in order to address powerlessness.
• Greed: Some individuals are gripped by an intense, overwhelm-
ing greed driven by materialism. Such insatiability is amplified
when a potential vehicle leading to outrageous prosperity appears.
Therefore, when such an opportunity emerges and can seem-
ingly provide a substantial windfall, they are more likely to shed
common sense.
• Envy and Jealousy: These are not interchangeable concepts. Envy
is an emotion related to coveting what someone else has; jealousy
is the emotion related to fear that something will be taken away
by someone else. Both are equally powerful drivers in influencing
people to make impulsive decisions they ordinarily would avoid.
13
Shiller, R. April 10, 2001. Irrational Exuberance. 1st ed. New York, NY: Broadway
Books.
• Impulsive Opportunism in the Control-Challenged: Indi-

viduals with impulse and control issues find these behaviors ex-
acerbated when faced with the dilemma of a potentially very
lucrative opportunity. Normally they are likely to make poor,
rash decisions. This tendency is only amplified when the stakes
are higher.
• Rumor-Mongering: Some people derive a sense of self-worth
from their ability to gossip and spread rumors. When they leverage
these skills in promoting a particular venture, they psychologically
lash themselves to the mast of the doomed enterprise and would
rather go down with the ship than admit fault.
• Irrational Risk Acceptance: What happens when overvaluation
and under-sophistication collide and combine with refusal to
admit ignorance as well as obstinacy in considering risk? Some
people also have an inability to weigh risks versus rewards and
make associated decisions, and have a lack of awareness of what
value truly means across many levels of human history, experience,
and behavior.
• Ignorance, With a Side of Obstinacy: The human species is the
only group of organisms on the planet that does not weed out
those of lesser intelligence through the process of natural selection.
As a result, some of us are simply not that bright. In fact, many
of these dimmer bulbs tend to revel in the self-deceptive bliss of
ignorance, steadfastly refusing to recognize the obvious. Such re-
fusal is actually psychologically empowering, even if it is ultimately
self-destructive.
• The Delusionary, False Sense of Entitlement: Despite a particu-
lar quirk buried deep within our DNA, we are not necessarily
special. We are not necessarily destined for a purpose. Life does
not necessarily make sense. We are not necessarily entitled to hap-
piness. Ships do not always come in. We are not predestined to
deserve one shot at the big time. Such myths make some take
on inordinate risk when they spot that one chance to grasp the
brass ring or ______ [fill in your own preferred cliché here]. As a
species we like to fantasize endlessly about how we would spend
those millions. We are prone to self-delusion, which clouds our

decision making.
• Desperation: Circumstances have plenty to do with our willing-
ness to assume risks. Desperation, either actual or contrived (as
we age, for example, we tend to seek out opportunities to leave a
mark) is a powerful motivator to throw caution to the wind.
In treatment I explore all of these points with my clients. I work on

bolstering their understanding of their emotional attachment to money.
We explore the myriad meanings money has played in their lives. We
complete an historical analysis of how money was considered and handled
in their family of origin. We study how money is conceptualized and felt
about currently. We discuss how they see money in their lives now and in
their future, and what their financial goals are going forward.
I utilize bibliotherapy techniques (my clients Google and read!) and
assign certain articles and blogs to clients. I also utilize journaling tech-
niques, whereby clients monitor and track their spending patterns to-
gether with their observations of their money feelings along the way. I
have developed a Budget Tracker system, which clients slowly but surely
embrace. After the fear and resentment dissipates, they enjoy tracking
their spending because it empowers them.
Still, I can only reinforce these techniques to help facilitate common
sense. Your Gyroscope must be tuned, honed, well-oiled, shipshape,
strong, and flexible at all times. It is an ever-changing money world out
there, one that easily inspires and conditions us to “get caught up in the
glory.” Only your own experience, analysis, and common sense, as well as
the resulting insights, can provide the necessary counterweight to such—
if I may, and if you will—inadvisable calls of nature.
Self-Esteem = Square Footage Plus…

Set in Manhattan in 1989, American Psycho is a powerful psychological
thriller and satire by Bret Easton Ellis that draws the reader into the mind
of wealthy investment banker and serial killer Patrick Bateman. Though
the novel chronicles Bateman’s descent into madness, the first third of the
book contains no violence, save subtle references portending later events.

Instead it recounts the lifestyles of the young Wall Street elite, often cata-
loged in painstaking detail, as Bateman documents going with his friends
and rivals to various nightclubs, where they snort cocaine, drink an as-
sortment of alcoholic beverages, critique fellow clubgoers’ clothing, trade,
fashion advice, and test one another on proper etiquette. In their minds,
they are undoubtedly Masters of the Universe.
Masters of the Universe
Satirizing the shallow vanity of Manhattan yuppies, Ellis makes Bateman

extremely style-conscious, someone who appears to be an expert in fash-
ion and high-end consumer products. In Bateman’s narrative, he describes
his and other people’s possessions in exhaustive, obsessive detail, focusing
particularly on attire, and even noting articles such as pens, business cards,
and pocket squares. He tends to pay more heed to the designer, place of
purchase, and style of the items he describes, often ignoring the textile
type or color. Bateman always has an answer for his friends’ and coworkers’
queries, authoritatively explicating the difference between various types of
mineral water, which tie knot is less bulky than a Windsor knot, and the
proper way to wear a cummerbund, pocket square, and tie bar.
In this element of the narrative, Ellis is spot on, eloquently showcas-
ing these so-called Masters’ endless fixation on the materialistic, illustrat-
ing the importance of these details to the members of this elite club. One’s
worth is interwoven with the quality of one’s goods. One’s possessions
become the stuff of life, fillers for an empty soul, a desiccated heart.
The Ubiquitous Obsession with Consumption
In my role as counselor to very bright, high-achieving, gifted, wealthy

people, I know to what lengths some will go to seek solace for their
consuming emptiness. And on Wall Street, where obscene displays
of excess are the measure of success, size, scope, and extent certainly
matter. I have spent decades analyzing the behavior and mentality
of the moneyed, and I have concluded that many people with big
money actually think, feel, and see the world differently than those
of us who live week to week, paycheck to paycheck. Their attitudes

and belief systems are often pervaded by a sense of superiority, en-
titlement, specialness. They are power mavens that behave, unfortu-
nately, like what some might call savages, feeling they are above all
laws, free to act as they desire, and arbiters of the latest and greatest
in taste and style.
There is a seeming depth to their shallowness, as they readily flaunt
their connections, insisting they, and only they, know the best people,
restaurants, schools, hotels, designers, chiropractors, psychotherapists,
vacation retreats, caterers, and so on. They sell much of themselves to ac-
cumulate this outrageous wealth. Every trade, every deal, every day, they
are driven to accumulate: the more the better, the busier the better, the
more outrageous the better. They are envious even as they are the subjects
of envy. They are, indeed, poor little rich people.
A Case Study in Excess
One of the more notorious exemplars of greed and manipulation is John

Thain, who in January 2009 resigned his position at Bank of America
under intense pressure, as news emerged that he rushed out billions in bo-
nuses to Merrill Lynch employees in his final days as CEO. This was done
as Merrill was hemorrhaging huge losses and Bank of America was about
to take it over. The bonuses were paid just prior to the January 1 acquisi-
tion. Bank of America subsequently received a $20 billion government
bailout, in part to weather the unexpected Merrill losses (it ultimately lost
$27 billion). At the time it came to light—via the intrepid reporting of
CNBC’s Charlie Gasparino—that upon taking over at Merrill the year
prior, Thain spent $1.22 million of company assets redecorating his office
with products that include the following:
• Area rug: $87,784 • Six wall sconces: $2,741

• Mahogany pedestal table: $25,713 • Parchment waste can: $1,405
• Nineteenth-century credenza: $68,179 • Roman shade fabric: $10,967
• Pendant light furniture: $19,751 • Roman shades: $7,315
• Four pairs of curtains: $28,091 • Coffee table: $5,852
• Pair of guest chairs: $87,784 • Commode on legs: $35,115
• George IV chair: $18,468
The $35K commode—which, in Victorian England was a chest

of drawers used to store chamber pots; we are left to guess what use
Mr. Thain put it to, other than flushing money down the toilet—was
seized upon by the media as an egregious example of corporate greed run
amok. Sure, Thain was an easy target. Yet, as I have found time and again
in my practice, such outsize, improper spending is quite prevalent rather
than being an anomaly.
In fact, in a January 26, 2009 New York Times article entitled Thain
Defends Actions, But Will Pay for Renovations, when exiting Bank of America,
Thain did not exactly concede that his actions were particularly inappro-
priate, according to the Times:
In what CNBC described as a parting memo from Mr. Thain to

Merrill employees, Mr. Thain said that the $1.2 million renova-
tion (which he said was not just for his office, but also two confer-
ence rooms and a reception area) was “incurred over a year ago in
a very different environment.”
“Nonetheless,” he continued, “they were a mistake in light of the

world we live in today. I will therefore reimburse the company for
all of the costs incurred.”
By that logic, is Thain saying that depending upon the market envi-
ronment, there possibly is a time when a $35,000 commode is a proper
use of shareholders’ money? We are left to guess.
Aspiring to the Status Quo
The intriguing reality here is that Thain is not an anomaly. A large num-
ber of people in finance buy into the belief that “more square feet a better
human being makes” which translates into a value system. I recall a very
successful female broker (a multimillion-dollar producer for a leading
Wall Street firm) casually bragging to me of having spent $12,000 on
high-end designer shoes during a spree. It actually took three store staff-
ers a good hour to load all of the shoes into the trunk of her new Jaguar.
After detailing a particularly rousing sexual encounter with her hus-
band from that same day, she declared with pride how he had christened
her “shopaholic whore/tart,” thereby reinforcing this outrageous behavior.
In my profession, though I am frequently amazed, I am no longer sur-

prised by what I hear. When we discussed the subject of extravagance,
more “happenings” were shared:
• Hotels and Accommodations: They work hard and expect to be

treated as the elite, with $1,500-a-night hotel rooms featuring ex-
travagant amenities. Some clients love to brag about the suite at
the George V in Paris, or the $2,000 room at the Connaught in
the heart of London’s Mayfair, where all the staff wears top hats
and tails.
• Country Club Memberships: Most of my clients boast multiple
must-have memberships, to the tune of hundreds of thousands of
dollars in annual dues and fees. Apart from the board room, this
is where the money struts and is multiplied; this is the venue for
prospecting, networking, and puffing out your chest.
• Crystal, China, Silver: Some of my clients would boast of going
to Europe to buy directly from Royal Doulton and Baccarat, just
so they could have double the bragging power: “We went to the
source.”
• Interior Design/Custom Architecture: Many hire overpriced,
pretentious decorators, to send out shopping for them. They are
always overcharged, but not oblivious to being cheated. They want
to spend more, so they could say they spent more. It is a known
fact that landscape architecture companies adjust rates based on
zip codes.
• Wristwatches: Wristwatches are a huge status symbol. Rolex,
Vacheron Constantin, and Patek Phillippe tend to be among the
most “treasured.” Some go to the watch auctions at Sotheby’s on
York Avenue, pick the brains of the experts, and then hit their
47th Street wholesaler to get a 35-percent-off-net deal. After all,
“everybody loves a bargain.”
• Art: Clients regularly buy oil paintings, going to the New York
City auction houses and being seduced by experts and appraisers.
Few had ever studied art history, but, after all, it’s about status, peer
one-upmanship, and self-esteem issues. Generally, they are cheated
and, fortunately, never know it.
• Private Chefs/House Parties: Private chefs shop, prepare, serve,

and clean up—a delicious snob item. Very extravagant parties
are held: the sky’s the limit, overnight in the city at the Plaza, the
St. Regis, or the Pierre. Elaborate Christmas and birthday parties
abound with buckets of caviar, Cuban cigars from “diplomatic
sources,” and all the trimmings.
• Shopping Sprees: Cars, clothing (Saks, Bloomingdales, N eiman
Marcus), custom-made suits, shirts, shoes (up to $4,000 a pair
for custom shoes from the most elite Madison Avenue shops)
where they build a cast from a mold of your foot. All about image,
self-importance (one’s own well-earned and entitled narcissism)
and perhaps most important: impression management.
The Emptiness of Accumulation
The sad reality is just how empty these acquisitions ultimately are for
the individual. Because they are so exorbitant, they feed this cycle of
high-pressure work and endless accumulation of wealth, but without
delivering true personal value and emotional satisfaction, which are not
always measured in monetary terms. Remember, we have been sculpted
into a “desires culture.”
The Wall Street Psychologist’s Gyroscope is intended to align one’s
sense of self more truly and safely with enduring value and true/deep net
worth on a micro level. Ultimately, you cannot wear a bank account on
your sleeve, nor can you drive your portfolio, or wear the true value of
your self-worth on your wrist—even if all those delicious marketing forces
out there try to convince you. They just want to peddle their wares. You
can try to, and sport the gold-and-diamond Rolex Presidential chronom-
eter, but these stratagems will not strengthen a weak ego structure—only
temporarily, if at all. Possession will not eradicate your sense of vulner-
ability and propensity for panic, nor give you a loving heart.
A number of my clients, especially the hedge fund folk, set up foun-
dations and spend/invest/give away literally millions of dollars. Almost
to a man, they assert that “these gestures lubricate their conscience.”
They acknowledge, that they are obscenely overpaid (the previously
mentioned “20%–2%” formula). Many of them compete with each
other on how much they give away, and how much they are saving in
taxes. They seem to despise the IRS almost as much as they despise the
Democrats.
So, it is not necessarily spending money solely for the sake of spend-
ing money. It is wielding money as a psychological weapon. With
nearly everything they do, they become stuck in an eternal competi-
tion of one-upmanship, and what becomes a pathological treadmill of
über-competition. Competition where nobody really wins; it is just a
head game and nonsense when you break it all down and take a fearless
inventory of your behavior, persona, and place in the universe. Humil-
ity, perspective, gratitude, recognition by your peers; these are traits and
experiences which separate us from the animal kingdom.
Invest in Your Emotions, Nurture Your Relational Assets
Ultimately, the accumulation of wealth can be a psychological trap even

though it can feel pretty juicy. It must all be kept in perspective—that
Rolex watch can for a time make you feel good, even superior, and re-
ally successful, but it is your inner self and dignity which houses your
true worth and self-esteem. It is all about perspective and counting your
blessings.
You may have been blessed with exceptional gifts and talents, but you
are still only one person. There is a whole history of the world out there.
You are not Einstein or Leonardo, or even Alexander the Great. Be the
most whole and happy you that you can be, even if you are rich. Count
your blessings and be good to the people you love and care about; that
is what wealth is really about. The trappings, the cars, the watches, the
houses will only fill you up to a point; they are not really the be-all and
end-all of your life and value. True self and human value are much more
precious and elusive.
Hopefully, my program and this book will put you more in touch
with who you are and who you can be. Embrace yourself, not your pos-
sessions. And never allow your possessions to own you. Otherwise you
are just a victim of advertising and assorted marketing schemes. Material
goods fill the void momentarily, but never for long enough. The bottom
line is that you must do your own internal work. There are no shortcuts
in the process of emotional restoration and maintenance. Your Gyroscope

is your single greatest asset. It can really fill you up; it enables you to go
through your life safely and with dignity.
Following the Gyroscope, you will be able to say that you have created
a system that insulates you from the mania and stress of the Street. You
are never empty; you have true self-worth—so much more profound than
merely net worth. You can be your own hero.
Common Mistakes Financial Professionals Make

The concept of death by a thousand cuts can refer to the practice of slow
slicing, a form of torture and execution perfected in Imperial China start-
ing from roughly AD 900 until its abolishment in the early twentieth
century.14 The victim, convicted of serious crimes, such as treason or
patricide, is slowly, methodically sliced, then left to suffer, resulting in
a drawn-out, horrific death. As with death by a thousand cuts, the psy-
chological and physiological unraveling of many financial professionals is
not a single, abrupt event. Rather, it is an excruciatingly slow, drawn-out
process.
In the following text is a list of common mistakes that financial pro-
fessionals make. It has less to do with financial processes, and more to do
with relationship issues, personal choices, and how one conducts oneself
in the world. Most are barely noticeable, but each works alone or in con-
cert with others to the great detriment of the individual. How does the
financial professional avoid these pitfalls?
In Volume IV of this series, I provide strategies for recovery from the
common mistakes professionals make as Volume IV offers the method-
ologies and strategies for overcoming problems and rebuilding your Gy-
roscope. However, before the healing process can start, you first need to
identify the issues and examine them objectively and survey the damage
done. Ultimately, the pitfalls need to be identified, reconciled, and ad-
dressed through a more organic, holistic campaign of strategies applicable
at work, with clients, and at home.
14
Brook, T., J. Bourgon, and G. Blue. 2008. Death by a Thousand Cuts. Cambridge,
MA: Harvard University Press.
Common Mistake #1: Fixation on Money
The first mistake is being more interested in making money than in

building a business that will grow and endure and become an asset unto
itself. The money will come; the emotional and technical infrastructure is
paramount. One can never spend too much time building his or her
organization and perfecting the methods and strategies for doing business.
Common Mistake #2: Maintaining Unrealistic Expectations/Easily

Distracted from Priorities and Goals
Rome was not built in a day. It can take 3 to 5 years to build a substantial
client book or to develop the relationships and skill sets that are needed to
achieve comprehensive success. The focus should be on planned, quality
growth. Establishing a long-term personal exit strategy can help nurture
your psyche and attain incremental growth. Having and sticking to a
business plan or model is part of that strategy. Discipline is essential in
any endeavor, even more so in a field with raging volatility and forces over
which you have little, if any, control. Good FPs utilize hedging paradigms
with clear tactics in order to manage risk, loss, and gain.
Common Mistake #3: Managing Time Poorly
Managing time poorly is a difficult problem to overcome without disci-

pline. Of course, time is money; and it always has been. The slogan of
zerohedge.com, a novel and funky financial website, is instructive in this
regard: “on a long-enough time line, the survival rate for everyone drops to
zero.” The grains of sand do, in fact, run to the bottom of the hour glass.
Common Mistake #4: Poor Growth Planning
Another common mistake is expanding too quickly, beyond one’s capac-

ity to handle the work. All in due time…. One must balance and man-
age growth, otherwise quality will be compromised. As part of planned
growth, keep in mind the need for partnership and a savvy, expanded sup-
port staff. Having a long-term template in mind never hurts. Expanding
indiscriminately, such as opening too many small accounts, is a common
mistake of an actively growing enterprise. A well-known maxim assures

us that 20 percent of the people we deal with in business take 80 percent
of our time (Pareto’s Principle or the Law of the Vital Few). One needs
to develop assessment techniques for taking on small accounts; of course,
potential earnings, family contacts, inheritance possibilities, and other
factors need to qualify these decisions.
Common Mistake #5: Fear of Failure
Being afraid of making a mistake is a pitfall we all must overcome.

We all make them daily and in perpetuity; clearly it has something to
do with our absolute and fundamental humanness. To be human is to
err. Smart financial professionals forgive themselves and move on. Es-
tablishing firm, attainable goals helps keep the individual grounded,
minimizing anxiety.
Common Mistake #6: Taking Clients for Granted
Not taking the time to get to know a client is a common mistake with fi-
nancial professionals forever pressed for time. Clients are people, too. The
more you treat them as real people, the better they will be as clients. It is
critically important to speak with your clients regularly. Keep in mind: if
you are not talking to them, someone else is, or certainly will be. Clients
need attention and contact.
Common Mistake #7: Ignoring Cross-Sell/Up-Sell Opportunities
Not asking for business is one common mistake financial professionals

can easily avoid. Do not be afraid to market yourself, your skills, and
your services. Clients respect ambition as well as performance. They
want to be proud of their FP; they want to recommend you to their
friends. Clients brag about how much money they make and about how
terrific their FP is, especially when profits are regular. In bear markets,
no one comes out of the cave. By incorporating such follow-on requests
into regular, consistent communication tactics, you can add discipline
to your repertoire.
Common Mistake #8: Avoiding Change
Many financial professionals have issues dealing with change. Yet change
is constant in this industry, especially in the workplace. Change should be
embraced, not shunned or feared. Change challenges our emotional and
intellectual resources, and makes us better at what we do. You can and
must innovate throughout your life. You must also be able to envision
how change affects goals, and make adjustments accordingly.
Common Mistake #9: Poor Self-Reflection/Assessment Skills
The financial professional must take time to know himself. Self-knowledge—

the fuel that drives and guides The Wall Street Psychologist’s Gyroscope—
must be achieved at all costs. Establishing personal and professional goals
will enable you to achieve fulfillment and stave off anxiety. Seeking cli-
ents’ gratitude and approval is a double-edged sword. Clients approve of
performance and the way you communicate with them, especially when
you have to deliver bad news. Thus, it behooves the FP to make his clients
part of the solution, and, at times, part of the problem; in other words,
honesty is the best policy. Conversely, an all-too-frequent occupational
hazard for the FP is the client’s dissatisfaction, even when you are per-
forming brilliantly. Client gratitude is a rare commodity in the broker
culture, and comes at a premium. Look inward for affirmation of perfor-
mance and value.
Common Mistake #10: Deception
Not being absolutely honest when necessary may be tempting, but is al-
ways a bad idea. When it comes to dealing with clients, omission makes
the client a partner in negative, painful, and difficult decisions. Integrity
is a must and, as such, is the underpinning of transparency. Financial
professionals frequently need to deliver bad, painful news that can only
be sugar-coated to a certain extent. Telling the truth manages risk and
pain more effectively than deceiving clients and rewriting reality. Clients
want to know where they stand, even if they think they do not. Clarity
and honesty are orders of the day. Your respect index will soar and prevail
if you conduct yourself in this manner.
Common Mistake #11: Over-Servicing Clients
A successful FP understands the necessity of consistency in setting realis-

tic expectations. Smart financial professionals train up their clients. You
must break them in. If you give too much, they will expect too much. You
must be clear and set expectations, both on your side and the client side.
Too much is no good. Too little is no good. Each party needs to know his
or her role and responsibilities.
Common Mistake #12: Poor Communication Skills
Avoiding communication with clients, colleagues, even competitors is a

common lapse in judgment for financial professionals. Again, if you are not
talking to your clients, someone else is. If you are not collaborating effectively
with your colleagues, you are missing key opportunities. And if you are
keeping tabs on competitors, key strategic advantages may be passing un-
seen. Consistent contact is critical. For instance, you can divide your client
base into quartiles. The top quartile meets with you on your turf or their
turf quarterly. The bottom quartile meets with you annually. Regardless of
the strategy you select, you need to have a plan in place for managing busi-
ness communications to maximize your awareness and performance.
Ray Dalio, the founder of Bridgewater Associates, the world’s largest

hedge fund, is a brilliant innovator and business philosopher. His treatise,
Principles,15 is a must-read for any financial professional. Dalio is bent on
constant improvement and on achieving excellence, and, in this regard,
espouses the concept of kaizen,16 by which many Japanese firms live (and
perish), seeking continual change for the better. Dalio perceives and con-
ceptualizes mistakes as juicy opportunities for improvement, change, and,
ultimately, achievement of excellence.
15
www.bwater.com/Uploads/FileManager/Principles/Bridgewater-Associates-Ray-
Dalio-Principles.pdf.
16
Kaizen is the practice of continuous improvement. Kaizen was originally introduced
to the West by Masaaki Imai in his book Kaizen: The Key to Japan’s Competitive Success,
in 1986. Today Kaizen is recognized worldwide as an important pillar of an organiza-
tion’s long-term competitive strategy. [Wikipedia].
Index
Accumulating wealth, point of, Codependency, 57
36–37 interoffice dysfunctional
Accumulation, emptiness of, 28–29 relationships, 57–59
Adjustable-rate mortgages (ARM), 79 mindset to break free, 62–63
The Age of Turbulence: Adventures in a money, constricting influence
New World, 20 of, 59
Akerlof, George, 104 on production for self-validation,
Animal Spirits: How Human 61–62
Psychology Drives the Economy unbreakable bonds, 60–61
and Why It Matters for Global Codependent people, charactersof,
Capitalism, 104 17–18
Antisocial behavior, 68 Colombo, Ronald J., 107
Apple Computer, 9 Consciousness, 72
Aristotle’s components of wealth Consumers, 78–79
accumulating wealth, point of, misguided judgment, 79–80
36–37 Core values, 16
better use for money, 35–36 The Corporation, 105, 106
happiness and fulfillment, Corporate psychopathy, 100–115
definition of, 37–38 alone, dangers of leaving,
ARM. See Adjustable-rate mortgages 111–112
(ARM) animal instincts, 104–105
The Art of War, 115 corruption, 103–104
The Ascent of Money (Ferguson, Niall), disaster obligations, 106–108
75 greenspan confession, 110
Atlas Shrugged, 111 gyroscope, 109–110
making sense of nonsense,
Babiak, Paul, 89, 105 114–115
Bailey, K.G., 92 markets, hidden dangers lurking
B-school educators, 8 in, 113–114
Bateson, Melissa, 69 pride goeth before destruction,
Bazerman, Max, 69 110–111
Behavior, antisocial, 68 seven dimensions of, 101–102
Bloomberg Businessweek, 5 systemic corruption/moral
Bribery, 16 ineptitude, 108–109
Budget Tracker system, 23 undiagnosed psychopathic
Buffet, Warren, 111 behavior, 112–113
Business education, paradigm shift in, 7 Corruption, 78
corporate culture, 103–104
Calvin, John, 76 COVID-19, 83, 120
Canon law, 76 Credibility, 16
Charismatic psychopaths, 96 Crisis of Character, 16, 113
Cleckley, Hervey M., 87 Criterion behavior, 8–10
130 INDEX
Daniel in the Lion’s Den—And Out hostility to, 76–78

Again All Right, 3 modern, 3–4
Deceit, 65 path led into financial sector,
Deception, 45 4–17
and leverage, 81–82 Financial psychopathy, 81–97
truth about, 65–72 characteristics, 97
Decision making, 21 charming, charismatic, intelligent/
Delusionary, 22–23 parasitic, 89–90
Desperation, 23 dark craft, 86
Devolve, 66–67 dreadful mind of madoff, 93–94
Diabolical, evolution of, 115–119 future of, 116–117
Dishonesty, 17, 65 masters of deception, 92
Distempered psychopaths, 96 minority, 83–84
Drier, Marc, 83, 89, 99, 116 monster, eyes of, 84–85
psychopathic diagnoses, history of,
Economic action, purpose of, 36 86–88
Education, limitations of, 6–8 psychopathy
Emotion, 46 checklist, 88–89
Emotional positioning, 17 types of, 95–97
Empathy, 41 sub-traits, 91–92
Enabling grew, concept of, 57 vulnerabilities, 90
Energy, 48–49 vulnerable, 95
Enron, 83, 103, 104, 106 Firestein, Peter, 16
Enron: The Smartest Guys in fMRI. See Functional Magnetic
the Room, 103 Resonance Imaging (fMRI)
Envy, 21 Formal education, 9
Ethics, 17 FPs.See Financial professionals (FP)
Extravagance, subject of, 27–28 Fulfillment, definitionof, 37–38
Functional Magnetic Resonance
Ferguson, Niall, 75 Imaging (fMRI), 71
Fiduciary responsibility, 14
Greed is good, 15–16 Gecko, Gordon, 89
Financial Professionals (FPs), 1, 72 Gino, Francesca, 69
common mistakes, 30 God complex. See Narcissistic
avoiding change, 33 Personality Disorder (NPD)
deception, 33 God, understanding
fear of failure, 32 hedge fund folks particularly
fixation on money, 31 narcissistic, 55–56
ignoring cross-sell/up-sell Narcissistic Personality Disorder,
opportunities, 32 54–55
managing time poorly, 31 oblivious to obvious, 56–57
over-servicing clients, 34 overview, 53–54
poor communication skills, 34 Goldman Sachs, 107, 108
poor growth planning, 31–32 Grace theory of honesty, 71
poor self-reflection/assessment Graduate management programs, 6
skills, 33 Great Recession, 77
taking clients for granted, 32 Greene, Joshua, 71–72
unrealistic expectations/easily Greenspan, Alan, 110,
distracted from priorities and 19–21
goals, 31 Greenspan’s legacy, 112
INDEX
131
Guilt, repression of, 66–67 psychology of, 41–43

Gyroscope approach, 11 Madoff, Bernard, 83, 84, 89, 93–94,
95, 99, 116
Happiness, definitionof, 37–38 Main Street, 77
Harvard Business School, 69 Maneuvering, 49
Hedge fund managers, 55–56 Manie sans delire, 87
Hare, Robert D., 83, 88, 97, 105 The Mask of Sanity, 87
Hare’s Psychopathy Checklist, 112 Maudsley, Henry, 87
Harrington, Alan, 116 Mealey, Linda Dr., 92
Harris, Grant T., 91, 115–117 Mega-Ponzi-scheme, 83
Have Banks No Shame?, 108 Mind, effects on, 119–120
Honesty, 65–66 Mini-delusional system, 58
through consciousness, 72 Mississippi Bubble, 19
physiology and, 70 Mississippi Company, 19
Honor codes, 70 Money, 72–82
Hypnagogic, 1 constricting influence of, 59
versus mind, 1–2
Ignorance, 22 Moral disengagement, 69–70
Impulsive opportunism, 22 Moral imbecile, 87
Interoffice dysfunctionalrelationships, Moral insanity, 87
57–59 Moral leniency, 69
Irrational exuberance Morality, 70
psychological drivers of, 21–23
too good to be true?, 19 Narcissistic Personality Disorder
Tulip Mania and Alan Greenspan, (NPD), 54–55
19–21 Neuroimaging, 71
Irrational risk acceptance, 22 Newcastle University (U.K.), 68–69
Italian Renaissance, 76 NPD.SeeNarcissistic Personality
Disorder (NPD)
Jealousy, 21
Jefferson, Thomas, 100 Obsessive behaviour, 37
Jobs, Steve, 9
Pai, Lou, 104
Kernberg, Otto F., 87 Park Avenue, 83, 116
Kluger, Jeffrey, 93 Paulson & Co., 107
Kraepelin, Emil, 87 Paxton, Joe, 71
PCL-R. See Psychopathy
Laissez-faire capitalism, 111–112 Checklist-Revised
Lay, Ken, 83, 89, 99, 116 Physiology, and honesty, 70
Lending, 76 Pinel, Philippe, 87
Leverage, 74–75, 78 Pinker, Steven, 73
and deception, 81–82 Ponzi scheme, 93
psychology of, 80 Primary psychopaths,
techniques, 38 95–96
Logue, Lionel, 9 Psychological trauma, 10
Psychology, of leverage,
Machiavelli for modern FP, 38–40 74–75
morality of quotes from The Prince, The Psychopath in Society, 95
43–44 Psychopaths, 116
mystery of, 40–41 Psychopathy/brain, 97–100
132 INDEX
Psychopathy Checklist-Revised laying plans, 46–47

(PCL-R), 88 maneuvering, 49
Pudd’nhead Wilson’s Calendar, 3 nine situations, 51
spies, useof, 52
Rand, Ayn, 111 tactical dispositions, 48
Rand, While, 111 terrain, 51
Reagan, Ronald, 110 variation in tactics, 50
Reform, 6–7 waging war, 47
Repression, of guilt, 66–67 weak points and strong, 49
Rice, M., 115–117
Robert D. Hare. Dr. Tactical dispositions, 48
Rock, Chris, 70 Terrain, 51
Rumor-mongering, 22 Thain, John, 37
Russell, Jerry, 91 Too Big to Fail, 109
Trillin, Calvin, 11–12
Secondary psychopaths, 96 Truth-telling study, 71
Securities and Exchange TulipMania, 19–21
Commission, 15 Twain, Mark, 3, 9–10
Self-defeating, 42 2 and 20 model.See Hedge fund
Self-esteem managers
aspiring to status quo, 26–28 Tzu, Sun, 115, 118
case study in excess, 25–26
emptiness of accumulation, Ullman, Montague Dr., 101–102
28–29 Unbreakable bonds, 60–61
invest in your emotions, nurture Usury, 75–76
your relational assets, 29–30
masters of the universe, 24 Vigilance, 78, 80
ubiquitous obsession with
consumption, 24–25 Waite, Morrison, 106, 108
Self-validation, onproductionfor, Waging war, 47
61–62 Wall Street, 12, 80, 82–84, 89, 92,
Shiller, Robert, 104 103, 116, 119
Shu, Lisa, 69 Wall Street Psychologist’s Gyroscope,
Skilling, Jeff, 103 4, 95, 100, 101, 109, 110,
Smith, Robert J., 95 114, 115, 118, 119
Snakes in Suits: When Psychopaths Go relationship-management function
To Work, 89 of, 74
Spies, useof, 52 The Washington Post, 111
Stanley, Richard, 91 Weaving moral fiber, importance
Stratagem, attackby, 47–48 of, 42
The Stuff of Thought (Pinker, Steven), Welch, Jack, 37–38
73 White Anglo-Saxon Protestant
Sun Tzu (WASP), 54
The Art of War, 44–46 Will theory of honesty, 71
chapter-by-chapter guidance Without Conscience, 91, 105
army on the march, 50 Woodward, Bob, 111
attack by fire, 51–52 WorldCom, 106
attack by stratagem, 47–48
energy, 48–49 Zak, Jonathan, 102
OTHER TITLES IN OUR ECONOMICS AND
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Mastering the Moneyed

Dr. Christopher Bayer

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First published in 2021 by

ISBN-13: 978-1-95152-794-5 (paperback)

Business Expert Press Economics and Public Policy Collection

Collection ISSN: 2163-761x (print)

Cover and interior design by S4Carlisle Publishing Services Private Ltd.,

First edition: 2021

Printed in the United States of America.

Chapter 1 What They Did Not Teach You in Business School............1

worthy of deliberations in today’s business classrooms. Whereas ­Volume I

of various archetypes and complexes to provide an understanding of

Dr. Anestine Hector-Mason,

What They Did Not Teach

Much of what Financial Professionals (FPs) experience in real life is

The Modern Financial Services Professional

I consider that a broker goes according to the instincts that are in

Twain and others have

What They Did Not Teach

Enrolling Students Undaunted by Downturn

The Limitations of an Education in the Abstract

Seventeen years after the

Criterion behavior focuses on what you (the individual person) bring to

All learners need to be inspired, supported, and encouraged to think

We believe, after examining the findings of cognitive science, that

In other words, while it is important to prescribe curricula, as most

Psychological Trauma: Trapped and Deteriorating

The Smartest Guys in the Room?

Hubris, narcissism, and extreme class-consciousness permeate Wall

...one of the speakers at my 25th reunion said that, according to a

Wall Street is a sophisticated environment that can be wildly lucrative

Pride Goeth Before Destruction

“The scent of money that drew many professionals to jobs on Wall

The survey of financial job-seekers, conducted by financial recruit-

Contrast that to the firm’s June survey, when 84% of respondents

OneWire.com attributes the disparity to the different phrasing of

Thinking of Someone Else’s Needs

In an industry in which Greed is good, fiduciary responsibility seems al-

series;9 a glimpse of my concerns about fiduciary responsibility is pro-

Increasingly Difficult to Hide

• Bribery: “…doing the right thing is not always consistent with

• Emotional positioning: “A crisis only becomes a crisis when it

Financial services professionals should think on these concepts and inte-

The Characters of Codependent People

human value as a function of your net worth, your compensation pack-

• An exaggerated sense of responsibility • A sense of guilt when asserting

As noted earlier, Chapter 3 offers a deeper look at codependent rela-

Channeling “Irrational Exuberance”

Too Good to Be True?

Investors have long been susceptible to the “too good to be true”-based

Tulip Mania and Alan Greenspan

The first bubble documented by an economist was known as Tulip Mania

Psychological Drivers of Irrational Exuberance

• Insecurity: Decision making in instances of uncertainty is often

• Impulsive Opportunism in the Control-Challenged: Indi-

those millions. We are prone to self-delusion, which clouds our

In treatment I explore all of these points with my clients. I work on

Self-Esteem = Square Footage Plus…

book contains no violence, save subtle references portending later events.

Masters of the Universe

Satirizing the shallow vanity of Manhattan yuppies, Ellis makes Bateman

The Ubiquitous Obsession with Consumption

In my role as counselor to very bright, high-achieving, gifted, wealthy

worthy of deliberations in today’s business classrooms. Whereas Volume I