By Jeff Macke
Over the years the exalted Oracle of Omaha has been called many things, most of them fawning. What the man had never previously been accused of, at least to my recollection, is being girly. This is, until Louann Lofton, author of Warren Buffett Invests Like a Girl, joined me and Nesto to elaborate.
Louann says Buffett is "able to manage his emotions better than most men are," a claim that caused me to make tight fists and snort in derision. She supports her assertion by pointing to studies showing that men "tend to take on more risk than necessary," in part because of his seeming ability to take some of the testosterone out of the investing process and focus on the long term.
With the hair on my back standing upright like a threatened guard dog, I pointed out that Buffett has done more than his share of aggressive trades, among which being his famous crushing of Goldman Sachs (GS) and General Electric (GE) in 2008. For those unfamiliar with those deals, Buffett capitalized on the financial crisis to make large private placement investments in the embattled Blue Chips. What was more macho about the trades was the fact that Buffett didn't buy common stock but hand-made derivatives (yes, "weapons of financial destruction"). The positions more or less paid Buffett dividends on call options, gutting Goldman and GE's earnings for 2010 and '11 and making Buffett's Berkshire Hathaway (BRK-A) (BRK-B) billions.
Weren't those macho trades, Louann? Both seemed like testosterone-laden trades to me!
She explains that Buffett's willingness to focus on long-term gain overall was a trait more evident in females than in the male set.
I read the book prior to ripping it to shreds and burning it out of frustration because it's good. I'd elaborate more on the topic, but it's causing me to sweat and giving me an insatiable desire to buy puts on some stupid company, then go to a kick-boxing class.
Just check out the video and let us know what you think in the comment section. Do women invest better than men?