Reviewed by Sarah Ell
Harper Collins, NZ$14.70 (through Amazon.com)
Picture Wall Street. You think of shouting, rapid trading, and lots of testosterone, right?
Share trading might be a male-dominated profession, but author Louann Lofton suggests that women’s temperaments and behaviours are better suited to long-term success in investment. Having less testosterone may actually work in their favour.
Lofton takes a close look at super-investor Warren Buffett’s investment philosophy, comparing it to so-called ‘feminine’ traits. Her analogy demonstrates that Buffett invests ‘like a girl’ and Lofton suggests that other investors – both male and female – should do so too.
The book combines two themes: an analysis of what has made Buffett one of the world’s most successful investors (and richest men), and research on the characteristics of female investors.
Lofton looks at Buffett’s investing strategies and says many of them are similar to feminine traits, and include:
- Trading less frequently
- Not being overconfident
- Being more pessimistic, and shunning risk
- Taking time to research companies before investing
- Being immune to peer pressure
- Learning from mistakes
These all sound like common sense (to a woman at least). Yet Lofton points out that they are exactly the things many male investors are not doing – to their detriment.
The book contains interviews with different female ‘value investors’ (who buy shares they believe the market has undervalued). They explain how their investment philosophies align with Buffett’s, and provide advice for beginner investors.
This is not a long book, and the key points are repeated frequently to get the message across. But it’s an easy and interesting read.
Buffett is an investing legend, and his words of wisdom are good advice for any investor, male or female: “Be fearful when others are greedy and be greedy only when others are fearful” and “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.’