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Diagnostic and Statistical Manual of Mental Disorders: 312.31

Just in time to help the struggling financial industry comes Dr Ari Kiev, who, where others see only difficulties, sees an opportunity, and so should you.

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NEW YORK, Jan. 7 /PRNewswire/ — Psychiatrist, trading coach and author Ari Kiev, M.D. announced that he has launched Kiev Consulting, a consulting firm specializing in peak performance coaching for hedge funds and institutional investors and traders. Regarded as one of the top trading coaches, he has worked with some of the most prominent hedge funds in the country for more than 16 years. Kiev said he is expanding the services he provides to hedge funds and other investment firms to include the assessment of new portfolio managers, teambuilding and leadership training.

“This consulting practice effectively allows me to broaden my reach and offer customized services to an increasing number of fund managers who are recognizing the importance of a psychological perspective in managing investments,” he said. “Given the stress of today’s market and the challenges faced by professional investors, I felt the time was ripe for expanding my consultation work.”

Kiev said his counsel will encompass dealing with the stress of drawdowns, the behavioral dimension of risk management, psychological screening of analysts and portfolio managers, and creative approaches to building cultures of collaboration. Kiev, who has lectured worldwide on the psychology of trading, is the author of more than 20 books ?

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If you are a trader or money manager, it seems to me you could pretty easily get your health insurance company (if they’re still around) to pay for this treatment, provided that Dr Kiev diagnoses you with 312.31 in the DSM (Diagnostic and Statistical Manual of Mental Disorders), which I reproduce below:

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Diagnostic criteria for 312.31 Pathological Gambling (PG)

A. Persistent and recurrent maladaptive gambling behavior as indicated by five (or more) of the following:

(1) is preoccupied with gambling (e.g., preoccupied with reliving past gambling experiences, handicapping or planning the next venture, or thinking of ways to get money with which to gamble)

(2) needs to gamble with increasing amounts of money in order to achieve the desired excitement

(3) has repeated unsuccessful efforts to control, cut back, or stop gambling

(4) is restless or irritable when attempting to cut down or stop gambling ?

(5) gambles as a way of escaping from problems or of relieving a dysphoric mood (e.g., feelings of helplessness, guilt, anxiety, depression)

(6) after losing money gambling, often returns another day to get even (“chasing” one’s losses)

(7) lies to family members, therapist, or others to conceal the extent of involvement with gambling

(8) has committed illegal acts such as forgery, fraud, theft, or embezzlement to finance gambling

(9) has jeopardized or lost a significant relationship, job, or educational or career opportunity because of gambling

(10) relies on others to provide money to relieve a desperate financial situation caused by gambling

B. The gambling behavior is not better accounted for by a Manic Episode.

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I like that “five (or more)” — precision is always admirable. Four and I’m afraid you will not qualify, unless Dr Kiev is willing to bend the truth a little.

Madoff certainly could use 312.31 as a defence, since he indubitably qualifies under (6) through (10), and he’s done it for so long it cannot be better accounted for by a Manic Episode.

And (1) – (4) pretty much defines anyone in the money business right now, including the gummint.

The 5th edition of the DSM, forthcoming, which keeps growing in size and diagnostic precision, is still being edited, and iis reportedly adding

312.39 Pathological Adherence to Efficient Market Hypothesis and/or Behavioral Finance (PAEMHBF)

which will help with treating the next crisis.

I will try to stop now. I think I’m having a Manic Episode.

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