{"id":538,"date":"2012-03-26T19:31:40","date_gmt":"2012-03-26T19:31:40","guid":{"rendered":"https:\/\/kerryhannon.com\/?p=538"},"modified":"2012-04-29T21:19:04","modified_gmt":"2012-04-29T21:19:04","slug":"book-review-warren-buffett-invests-like-a-girl","status":"publish","type":"post","link":"https:\/\/kerryhannon.com\/?p=538","title":{"rendered":"BOOK REVIEW: ‘WARREN BUFFETT INVESTS LIKE A GIRL”"},"content":{"rendered":"
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By\u00a0Kerry Hannon<\/a>,\u00a0\"\"<\/a><\/h3>\n<\/div>\n<\/div>\n

\"\"No doubt the title of this new book \u2014Warren Buffett<\/a>\u00a0Invests Like A Girl And Why You Should<\/em>,\u00a0Too \u2014<\/em>\u00a0grabs your attention. But no snickering allowed. Calling legendary investor Warren Buffett a girly investor is not a put-down..<\/p>\n

Turns out “investing like a girl” is a good thing. It refers to Buffett’s even temperament \u2014 calm, disciplined, patient, realistic. The result: long-term investing success.<\/p>\n

The conceit of this book is charming and a clever way to lure readers into learning the ABC’s of investing courtesy of The\u00a0Motley Fool<\/a>‘s LouAnn Lofton. The author has been with David and Tom Gardner’s financial education crew for more than a decade and was the managing editor of Fool.com.<\/p>\n

Here are the eight traits gleaned from scientific research studies about female vs. male investors that Buffett epitomizes, according to Lofton’s reporting.<\/p>\n

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Female investors tend to:<\/p>\n

\u2022 Trade less than men do. One study found that men trade 45% more often than women do.<\/p>\n

\u2022 Exhibit less self-confidence: men think they know more than they do, while women are more likely to know what they don’t know.<\/p>\n

\u2022 Shun risk more than male investors do.<\/p>\n

\u2022 Be less optimistic, and therefore, more realistic, than their male counterparts.<\/p>\n

\u2022 Put in more time and effort researching possible investments, considering every angle and detail, as well as considering alternative points of view.<\/p>\n

\u2022 Be more immune to peer pressure and tend to make decisions the same way regardless of who’s watching.<\/p>\n

\u2022 Learn from their mistakes.<\/p>\n

\u2022 Have less testosterone than men do, making them less willing to take extreme risks, which, in turn, could lead to less extreme market cycles.<\/p>\n

Lofton ticks off these feminine investment characteristics, dedicating a chapter to each one, and uses Buffett and his publicly traded holding company,\u00a0Berkshire Hathaway<\/a>, as the billboard for this winning approach.<\/p>\n

For example, in the chapter: “Trade Less, Make More,” she writes: “Buffett really is the king of the trade less, buy and hold school of thought. Holding on to companies you invest in is important to Buffett because he likes to emphasize that when you buy a stock, you aren’t just buying a three-or-four-letter ticker, dancing across the screen like a mythical secret code. You’re buying a living, breathing company. Understanding this \u2014 that you are buying into an actual business \u2014 is an investing truth \u2026 you’re becoming a business owner,” she writes.<\/p>\n

To bolster the female mystique, throughout the text, Lofton scatters investment pearls pulled from interviews with a handful of successful women investors. These include: Lisa Rapuano, founder of Lane Five Capital Management; Lauren Templeton, founder of Lauren Templeton Capital Management; and Candace King Weir and Amelia Weir of Paradigm Capital Management.<\/p>\n

Ultimately, this book is a Motley Fool mantra, and shifts from Lofton’s “I” into the “we” voice, so don’t be confused.<\/p>\n

\u2022 We believe you should stick some money in an index fund, in addition to investing in individual stocks.<\/p>\n

\u2022 We’re all for long-term buy-to-hold, but \u2026 sometimes you just have to sell a stock you’ve bought. That’s OK, so long as you are doing it for the right reasons.<\/p>\n

\u2022 On the issue of diversification, we differ from Buffett. While Buffett has long believed that you need to own just a few stocks, and own a whole lot of each of them, we believe in spreading this out a bit more.<\/p>\n

Lofton (and the Fools) do an admirable job of parsing out the tried and true tenets of smart, sound investing and hitting on how you can improve your investment returns.<\/p>\n

The approach is refreshing. If circling the wagon around Buffett as to why this feminine investment method works makes it more palatable to apprehensive investors \u2014 male or female \u2014 more power to them.<\/p>\n

The book is a tad repetitive, but the message is a winner. You have to start investing to take control of your financial future, and before you can be taught how to pick stocks, you must learn how to master your temperament. No lipstick necessary.<\/p>\n

Contributing: Hannon is a freelance writer based in Washington, D.C. Her website is www.kerryhannon.com<\/em><\/p>\n

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