It’s surely, the best book title among the scores of books written about Warren Buffett —Warren Buffett Invests Like a Girl—Why You Should Too.
With the stock market currently dancing around like a cat on a hot tin roof I have just done what I’ve meant to do for ages—no, not read the Buffett book, but John Coates’s—The Hour Between the Dog and the Wolf: Risk Taking, Gut Feelings and the Biology of Boom and Bust.
It’s hard core.
Coates, now a Cambridge University neuroscientist, previously ran trading operations at Goldman Sachs and Deutsche Bank.
His firm conclusion based on science and his experience?
Women are better investors and traders than men in the round. They may do less well than men on the upside but lose a lot less on the downside. He notes that legendary Fidelity fund manager Peter Lynch always involved his wife and daughters in his investment decisions.
At base, Coates claims it’s down to hormones that ‘stack the brain’s deck’, and dictate mood and behaviour. He’s actually talking one hormone: testosterone. Women tend to have only 10% of male testosterone
Testosterone driven men are more bullish than women, brag more, indulge in one-upmanship more and trade 50% more often—the latter meaning they make more bad calls and clock up hefty trading costs in the process. In ‘bubbly’ times, like now, men do less homework, and take more risks while women are more risk averse, more meticulous, and dump losers quicker.
A clear lesson for investors: surround yourself with women and older men passed ‘peak’ testosterone.
As it is, most of the world’s money is run by single men at peak testosterone.
Noted: The world’s most successful fund manager since WW11, beats Buffett and Lynch into a cocked hat, is the now retired Jim Simons– a mathematician, former code breaker for the CIA, and expert in string theory whose hormone levels had no effect whatsoever on his investment calls. He never hired an investment analyst or economist only mathematicians and physicists, whose hormones weren’t a factor either: but more on him another time.