Warren Buffett Invests Like a Girl

For as long as I can remember, adding the phrase "like a girl" to the end of whatever you were saying was a put-down, an insult, something to come to fisticuffs over. Little boys the world over hated being told that they, for example, "threw like a girl." I'm not defending the statement, and as a member of the fairer sex, I certainly don't agree with its intent, but hey, that's been the case from the playground on up.

When it comes to investing, though, you could do a whole lot worse than learning to "invest like a girl." And that's why I'd bet Warren Buffett, chairman and CEO of Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) , wouldn't get offended if I told him to his face that he invests like a girl. In fact, he'd probably thank me (and perhaps slip me a box of See's Candies). Hang on to see why -- and stay tuned for our soon-to-be published book (June 21, 2011!) on this very topic.

What makes Buffett Buffett
What is it that makes Warren Buffett such a consistently phenomenal investor? Is it that he's zigging and zagging along with the market's every move? Is he trading all the time, buying this and selling that, racking up taxes and commissions all the while? Is he moving into and out of the markets in a testosterone-fueled frenzy?

No, no, and no -- what makes Warren Buffett the investor whom every investor wants to be like is that he approaches investing differently from the way most men do. Buffett has famously said that temperament is more important when it comes to investing success than is intellect. And his temperament tends to be more feminine than masculine.

He's patient and does thorough research. He doesn't buy the latest whiz-bang technology company that he can't understand. He doesn't take excessive risks. His goal is to never sell the companies he invests in. He doesn't do something just to do something. He's the anti-trader, if you will.

Yep, you heard it here first -- Warren Buffett invests like a girl. And that's a very good thing.

Women and investing
So how exactly do women invest? Check out just a few of the characteristics of female investors that distinguish them from their male counterparts.

  • Women spend more time researching their investment choices and tend to take less risk than men do. This prevents them from chasing "hot" tips and trading on whims -- behavior that tends to weaken men's portfolios. Women are also more likely to seek out information that challenges their assumptions, rather than only relying on data that confirms what they already thought.
  • One study found that men trade 45% more often than women do, and although men are more confident investors, they tend to be overconfident. By trading more often -- and without enough research -- men reduce their net returns. But by trading less, women produce better returns and also save on transaction costs and capital gains taxes.
  • Women have less testosterone than men do (not a surprise, we know). New and continually unfolding science points to the possibility that testosterone is responsible for herd-like risk-taking behavior from men in the financial markets. That makes a lack of it a decided asset.

These are some of the traits that make female investors more like Buffett and less like frazzled, frenetic day traders, with their ties askew, hair on end, and eyes bleary. Patience and good decision-making help set women apart here. (There are others, naturally, but you'll have to wait until Warren Buffett Invests Like a Girl: And Why You Should, Too is published this summer to see them all.)

So what if you're not a girl?
It's possible, dear reader, that you're of the male persuasion, but don't fret. By focusing on the traits that created superinvestor Warren Buffett's exemplary temperament -- patience, the willingness to dig deep, and the desire to buy and hold instead of trade, trade, trade -- you can awaken the feminine side of your investment psyche. Consider it. Your portfolio will thank you for it.

Want to learn more about Warren Buffett Invests Like a Girl? Click here to sign up, absolutely free, for updates, exclusive sneak-peeks, notices about my appearances, and more.

Omaha on my mind
I may get the chance to ask Buffett himself how he feels about "investing like a girl" this weekend when I attend the Berkshire Hathaway annual meeting. Follow along with me on Twitter (@LouAnnLofton), our "Invest Like a Girl" Facebook page, and right here on Fool.com for updates from Omaha to see if I pull it off! And if you're going out to the annual meeting, stop by Robert Miles' author reception Friday at the University of Nebraska at Omaha (Mammel Hall) from 6-8 p.m. I'll be attending it alongside other authors like Roger Lowenstein, Andrew Kilpatrick, and Lauren Templeton. Come say hello and enjoy a free Dilly Bar with me!

LouAnn Lofton owns "B" shares of Berkshire Hathaway. Berkshire Hathaway is a Motley Fool Inside Value and Motley Fool Stock Advisor pick. The Fool owns shares of Berkshire Hathaway. The Motley Fool has a disclosure policy.


Read/Post Comments (39) | Recommend This Article (107)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 26, 2011, at 3:49 PM, edyboom223 wrote:

    Hey LouAnn,

    Congratulations on the book! Also, I remember your days of making the Q&A videos at the Fool, and I wish they would bring those back! Lastly, congratulations on your marriage! Either that, or you had to go undercover and changed your last name.

    Good Luck with everything.

    Edyboom

  • Report this Comment On April 26, 2011, at 4:20 PM, skeptico wrote:

    "Warren Buffett Invests Like a Girl."

    What does that mean? Girls are better investors? If that were true, men should stay at home.

  • Report this Comment On April 26, 2011, at 4:21 PM, TMFBling wrote:

    Thanks, Endyboom! I appreciate it. I suspect you'll see more videos of me around Fool.com in the next few months, so I hope you like those, too. (And to clarify one other thing... it's the, uh, opposite of marriage that takes me back to my maiden name. :)

    danish80, I don't agree with you about Buffett not offering useful guidance for investors. I think his temperament is one thing we can all work on adopting, thereby improving our returns over the long run.

  • Report this Comment On April 26, 2011, at 4:24 PM, TMFBling wrote:

    Egads, forgive me -- Edyboom not Endyboom!

  • Report this Comment On April 26, 2011, at 5:27 PM, etosha wrote:

    Really LouAnn, so you are of the "fairer sex" and you are not defending the insulting statement of "like a girl". Well on behalf of women everywhere may I just say thank you.

    Now may I also tell you how offended I am that you would write an article and the heading would include that insulting put down as you referred to it. Are you now not just perpetuating that phrase and keeping alive the insulting put down? I believe so.

    Reading an article starting off this way to me a complete turn off and frankly hard to get past the first paragraph.

    Perhaps you are too young to know what women older than you fought for.

    You were concerned and believe that Warren Buffett would not be offended if you said that to him. What about the female readers of both you and the Motley Fool that also invest?

    I am offended.

  • Report this Comment On April 26, 2011, at 5:29 PM, bhavnasai wrote:

    I am sure the book will be successful and it was interesting to read the analogy between Warren and Girls until I read ---- "Women have less testosterone than men do...science points to the possibility that testosterone is responsible for herd-like risk-taking behavior from men in the financial markets"

    I wonder what does that mean to Warren?

  • Report this Comment On April 26, 2011, at 5:31 PM, Garvo wrote:

    Common, like a girl? There´s not this kind of "investors", just speculators, traders... If you have the Buffet's money maybe you can act like a girl, and expends like ones, but if you are a trader you have to take a lot of risk, and do fast movements. You cant trade like a girl shopping in the mall. Thats because there's not gentlemen in the stock market, and so, there's not respect to the "girls"

  • Report this Comment On April 26, 2011, at 5:44 PM, ShaunConnell wrote:

    This article was pointlessly sexist. It's not "masculine" to buy the "latest toys". I mean, what if the article said he invested "like a man" because he didn't buy the latest things "like a girl"?

    I mean, it's pretty sexist on every level. Nice job getting the click though.

    Also, articles saying obvious stuff about Buffett while trying to figure out clever ways to do so got old a couple of years ago.

    Not trying to be a hater, I just don't think it was appropriate.

  • Report this Comment On April 26, 2011, at 6:47 PM, 02421 wrote:

    Worst article I've ever read. Buffett DOES NOT invest like a girl, because he make BIG BETS after his thorough research and god-like ability to see competitive advantages far in the future. It's all about methodology and discipline, not sex.

    "Invest like a girl" would be what typical soccer moms do: listen to what her "broker" sells her or to her "friends" who think you should buy Exxon because "oil is going to $200 because Libya will probably go to war". When good opportunities actually show up, she buys just $500 worth because she's scare that the stock might go to zero and lose all her money, even though a company has predictable earnings and no debt. See, I can be sexist too.

  • Report this Comment On April 26, 2011, at 6:51 PM, 02421 wrote:

    And yeah, tell this to George Soros. He'd laugh in your face.

  • Report this Comment On April 26, 2011, at 6:52 PM, shoemaker17 wrote:

    sounds like some of the commenters on here need to get off their computers and feed their several cats. Lighten up folks

  • Report this Comment On April 26, 2011, at 8:01 PM, DonkeyJunk wrote:

    I'm with shoemaker. Anyone who still finds the comparison "like a girl" emasculating or in any way serious needs to spend less time at the playground. Some of the responses here are the most idiotic examples of female stereotype that they stretch the boundaries of believability. If you really believe what you're saying, I suggest a name change to ChauvaN00b.

  • Report this Comment On April 26, 2011, at 8:02 PM, bbauer52 wrote:

    I agree with Shoemaker17 - Lighten up! Did it ever occur to you that the title/subject matter was what caught your attention such that you read the article in the first place? Kudos to those of you (and LouAnn) that take the time to entertain/educate us with your articles. Enjoy reading it all, thanks much!

  • Report this Comment On April 26, 2011, at 8:56 PM, blissmanna wrote:

    Of course he invests like a girl... when the particulars call for it. Also invests like a man, kid, grandpa, and maybe even a baboon... when the particulars call for it. Obviously you personally find a slow methodical approach of knowledge first and action second to be more feminine than masculine. Pull the gender labels out and the article rings just as, if not more, true.

    Nice article Ms. LuAnn, I enjoyed reading and will keep a lame eye out for more.

  • Report this Comment On April 26, 2011, at 11:05 PM, 11x wrote:

    People that get offended over this article need to get over themselves.

  • Report this Comment On April 27, 2011, at 12:51 AM, JungleGent wrote:

    Great Title. Very funny. I'm sleepy and tired but had to read your article -- mainly because of the attention-grabbing heading. Some commentors here found your "like a girl" phase to be sexist and offensive. So what? Can't please everyone. One time, I called a young lady (half my age) "honey" and she got all mad, said I put her down by calling her so. I didn't agree, but seeing that she was quite upset, I apologized to her ... like a girl ;-)

  • Report this Comment On April 27, 2011, at 1:06 AM, mtracy9 wrote:

    Buffett quotes:

    "The stock market is designed to transfer money from the Active to the Patient."

    "If you don't feel comfortable owning something for 10 years, then don't own it for 10 minutes."

    "One of the ironies of the stock market is the emphasis on activity. Brokers, using terms such as "marketability" and "liquidity," sing the praises of companies with high share turnover. But investors should understand that what is good for the croupier is not good for the customer. A hyperactive stock market is the pick pocket of enterprise."

    "Many commentators are fond of saying that the small investor has no chance in a market now dominated by the erratic behavior of the big boys. This conclusion is dead wrong: Such markets are ideal for any investor -- small or large -- so long as he sticks to his investment knitting. Volatility caused by money managers who speculate irrationally with huge sums will offer the true investor more chances to make intelligent investment moves."

  • Report this Comment On April 27, 2011, at 1:58 AM, rezaur25 wrote:

    Hi LouAnn

    Your write up is very interesting. I am a Professor of Finance from Bangladesh, but actively follow stock reports from Motely Fool.

    I agree with your comment that some of the investment traits that Buffet has are simmilar to what you have described as "investing like a girl". My personal experience from managing my small size portfolio over the last 20 years is that, the stock market is actually for people who are patiently looking at a long time horizon instead of short-term kills. Research on industry trends and company performance profiles are definitely important, although the stocks sometimesz defy logic.

    Anyway, I will await tghe publication of your book.

    Rezaur Razzak

  • Report this Comment On April 27, 2011, at 2:22 AM, GettinBetter wrote:

    I am old enough to remember a time when people didn't feel it necessary to announce that they are offended. Frankly, as a woman, I read the article for what advice I could get about improving my investing skill.

  • Report this Comment On April 27, 2011, at 8:49 AM, bigkansasfool wrote:

    Fluff piece without any actual content.

  • Report this Comment On April 27, 2011, at 9:57 AM, TMFTomGardner wrote:

    Having read through and provided some second opinions to Lou on her upcoming book, I can tell you that it offers numerous important investing lessons. It also focuses on "masculine" and "feminine" traits. I think it provides a fresh perspective and a blueprint for great investing. For those with open minds and a sense of humor, it'll help you get better returns. For those looking to be annoyed or disappointed in life, I guess you'll miss this one. Foolishly,

    Tom Gardner

  • Report this Comment On April 27, 2011, at 10:42 AM, luv2teleski wrote:

    I am a "girl", a child of the feminist revolution, and have spent my career in a male-dominated field (construction). It is all about respect. If I pitched a fit every time my male colleagues said something deemed as sexist, I would soon be ostracized and alienated. If I calmly and quietly expressed distaste or disagreement I had a better chance of seeing results. I did not lower myself to the "potty talk" typical on job sites; I had no interest in being "one of the boys" at that level. But I did earn respect for my capabilities and was accepted in the group. We would joke about my being the "token female". So I agree with many of the comments to "lighten up!". I still face gender discrimination, and now age discrimination. It is real, I don't accept it, but I do try to deal with it in an "adult" manner.

    I can vouch for the difference in investing style. I "buy and hold", mostly, and my husband is (was) a frenetic trader. Who has done better? Without a doubt I have, AND I sleep better at night! Do I miss opportunities? Yes. Did I "lose" money in the recession ? Yes. (Note: you don't actually lose money unless you sell! But I do still own some dogs. Not even worth the money to dump them!) But I held on and my portfolio isn't screamin', but at least I have recovered. And am even a little ahead. And I did not spend a fortune on fees and newsletters as someone near and dear to me did. Yes he made big money, but he lost bigger money, has not recovered, and was always stressed out and cranky! I rest my case!

    Thanks for a great article! I have made a copy for "you know who"... And I look forward to your book!

  • Report this Comment On April 27, 2011, at 10:52 AM, OKgot2it wrote:

    I think if Buffet invested like a girl he'd be taking care of things that matter, like Earth, and not supporting the Natural Gas Fracking industry.

    Its hard I know to set money making aside and focus on long term perspectives that are not about money.

    On another note, possibly being like a girl is being playful. So playing along with the New Fool might just be fun and add dimension to how we all think at different times and want someone to hear us.

    OK

  • Report this Comment On April 27, 2011, at 11:32 AM, Gato337 wrote:

    I agree that many of the commentors above need to lighten up. saying your glorious hero Buffet is like a girl is not the end of the world.

    However - I have to add that this article still enforces the kind of gender dualism that prevents our society from moving beyond issues with sexism and sex discrimination. I can understand why @etosha is offended.

    The truth is that, beyond some small biological differences (such as testosterone and estrogen) which may influence behaviors (like agression and nurturing), the distinction between 'masculine' and 'feminine' traits is a wholly artificial one that is perpetuated through cultural norms. The truth is that all men and women exhibit these traits on a continuum. If our culture would stop insisting on assigning traits into gender-specific categories, then it would no longer be insulting for a man to embody a conventionally 'feminine' characteristic.

  • Report this Comment On April 27, 2011, at 12:04 PM, Mickum wrote:

    I'm surprised were hearing a bunch of feminist views regarding the article. MF likes to inject humor into their reporting, and that's what LouAnn (a woman) has enjoyed doing. I got a kick out of it.

    The feminist movement is over. Almost all women in the workplace (save the old libbers who can't let go and a few jilted younger sorts who are looking for a "cause") realize they are women, are proud to be women, don't want to be men and, frankly, don't really want to be treated "equally." They're women. We treat them different than we treat men. And so the women treat each other different than they treat men.

    And this is wonderful! Finally, men being men and women being women. It's a whole lot more beautiful and a whole lot more fun. (And a whole lot more interesting.)

  • Report this Comment On April 27, 2011, at 7:50 PM, annaraven wrote:

    Well, as a girl myself, I have a VERY IMPORTANT question about the shareholders meeting this weekend. What are folks wearing? I'm assuming business casual but hope someone who's attended before can help. I'd hate to be underdressed (a strong possibility after living in Silicon Valley for 5 years!)

  • Report this Comment On April 27, 2011, at 8:20 PM, Riskysam wrote:

    I think this is an insightful article and could careless how many people label it feminist. Impatience never earned anyone money over the long run. This is the message of the article. Lets making it into what it is not.

  • Report this Comment On April 27, 2011, at 8:21 PM, Riskysam wrote:

    I think this is an insightful article and could careless how many people label it feminist. Impatience never earned anyone money over the long run. This is the message of the article. Lets STOP making it into what it is not.

  • Report this Comment On April 28, 2011, at 9:08 AM, TicoHombre wrote:

    I just want to say that I am offended that you got offended. I feel offended when I perceive that someone purposely offends me. It's offensive!

    Oh, wait, what was the article about?

    Ugh. Some people just want to be in a perpetual state of offense.

    Cute article and I appreciate the analogy.

  • Report this Comment On April 29, 2011, at 12:06 PM, Gato337 wrote:

    @Mickum

    Surely you can't be saying that men and women are completely equal now - especially when women earn on average $0.75 for every $1.00 their male peers make.

    Sure, women might now finally be reaching the heights of success as Fortune 500 execs and high-level government officials (though still underrepresented demographically), and obtaining more and more of jobs that they used to be discouraged from taking.

    But it still doesnt say that men and women are now equal in the workplace - only that things are improving. Gender equality still has a ways to go. don't discount it as a done thing, please.

    Would you like to take a 25% paycut? I don't!

  • Report this Comment On April 29, 2011, at 12:15 PM, LeanJedi wrote:

    Enjoyed the article. Men with too much testostorone have tendency to go bald. I know this statement will be debated by men -with bald heads and heads with full grown hair. As long as they debate Foolishly, it is allright.

    Disclosure: I am a man with full grown hair and apparent low levels of testostrone are helping me invest Foolishly.

  • Report this Comment On April 29, 2011, at 2:01 PM, barbarian312 wrote:

    As Tom Gardner’s comment alluded to, there are "masculine" and "feminine" traits to any activity, including investing. They are obviously huge generalizations however, if we concentrate on recognizing and learning from those traits rather than resorting to petty arguments about who’s better, we will all be better off.

    That said, the testosterone in me just has to say: Warren doesn’t invest like a girl, girls invest like Warren:)

    I look forward to the book as an opportunity to learn from the fairer (but sometimes smarter) sex.

  • Report this Comment On April 29, 2011, at 9:47 PM, crazyfoolishfool wrote:

    "This prevents them from chasing "hot" tips and trading on whims -- behavior that tends to weaken men's portfolios. Women are also more likely to seek out information that challenges their assumptions, rather than only relying on data that confirms what they already thought."

    I think you got it backwards...

    This is the OPPOSITE of how women act...

  • Report this Comment On April 30, 2011, at 9:47 AM, Mickum wrote:

    Hi Gato,

    I have a few thoughts regarding your post:

    The 75 cent to $1 ratio argument is ad hominem and has no credence as a proof for gender discrimination: 1) it's difficult to really assess (one site said it's more like 0.8:1.0; and 2) even despite point 1, if there is some disparity, it can't be used to compare apples to apples. The ratio is an average of all jobs, not side-by-side comparisons. In other words, a male lawyer and a female lawyer with the same experience in a corporation make the same amount of money. A female bus driver makes the same as a male bus driver. There is no 3/4 ratio. So the disparity needs to factor in such issues as women leaving the workplace to have children, women doing jobs that men on average do not do (e.g., nanny, housecleaning, more part time arrangements etc v. machinists, carpenters, plumbers, engineers etc.). Since men still are largely the primary bread winners, they will also tend to seek out the highest paying jobs, whereas women - on average - are still in the secondary role re family household income and will, therefore, tend to have the freedom to seek out a job that is more satisfying and possibly less compensating. One other aspect that may come into play is that since there is still a significant stay-at-home moms cohort, the SAT moms talent base is taken out of the competition. Who knows but that perhaps some of the most talented women have dedicated themselves to the family and aren't even competing for the best paying jobs. Thus, the fallacy that men and women are basically the same and have the same desires for employment needs to be debunked. It just ain't so!

    Regarding equality, why do we need "equality?" Why do we need women in just as many executive roles as women? Why is that the ideal? Men and women are different, they on average seek different lives. Women have babies, men don't. Women tend to be drawn to nurturing a family, men tend toward protection/provision. Of course, you can find many exceptions, but those exceptions are merely that, exceptions. Hence, the two sexes do not average out equally. The role of a mother is different than a father. It's just reality. And it's a good thing. Thank God men and women aren't the same, with the same general temperaments and the same general emotions - it makes life a whole lot more interesting to have the variety.

    As an analogy, should college and NBA basketball teams be racially representative of the country? Of course not! Let the best athlete get the job! Should college enrollment be 50:50 for men and women? It's not - more women are attending than men now. Is that wrong because it isn't equal?

    Women have equal opportunity in this country to achieve what they can (notice, I didn't say "what they want"). You should be pleased with that reality. Equal outcomes as proof of equal opportunity is a fallacy. I'm glad that we still don't force equal outcomes (although there are those who would like to attempt a communist approach). Freedom of opportunity, that's what we should all be thankful for.

  • Report this Comment On May 03, 2011, at 9:37 AM, Calinvestments wrote:

    I'm not sure it's correct to generalize all women as conservative investors and all men as aggressive investors. Not all women "play it safe" and not all men "try to hit the home run". Are these studies that you are citing statistically signifcant? Very curious.

    Caligiuri

  • Report this Comment On May 03, 2011, at 2:06 PM, mikecart1 wrote:

    Warren Buffet IS a girl!

  • Report this Comment On June 10, 2011, at 5:19 PM, blesto wrote:

    Will the book be available on the Kindle?????????????

  • Report this Comment On June 26, 2011, at 1:44 PM, Venture123 wrote:

    ....But does Warren Buffett "spend" like a girl? LOL If he did he might be broke! Ha!

    The idea that men tend to over-trade versus women is something that has been written about in the past, so I'm not sure if anything new is being revealed here.

  • Report this Comment On October 28, 2012, at 12:44 PM, nkinhluan wrote:

    This product written by Louann Lofton and Warren Buffet talk about how to become rich and to invest in the right and field each one is expert on. This book is highly recommended for everyone to read, not only for the people who are into investments. www.youwillrich.net

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