Warren Buffett Invests Like A Girl? So Should You!
I read an interesting commentary in yesterday’s New York Times, about an article that appeared on the Motley Fool’s website, titled “Warren Buffett Invests Like A Girl“. If you don’t know who Warren Buffett is, or wouldn’t mind a refresher, go here, here, or here. Simply put, the man is regarded as the greatest stock market investor of modern times. His investment style has been the subject of numerous publications (a quick Warren Buffett search on Amazon yielded 1,757 results).
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Furthermore, thousands of shareholders from all over the world flock to Omaha, NE every year to attend the annual Berkshire Hathaway shareholder meeting, where Warren Buffett, along with Charlie Munger (Vice President of Berkshire Hathaway) sit at a small table they answer every and any question put forward from several auditorium microphones scattered across the audience.
So it’s a understatement to say that I was curious about such a title and what it would say. Actually, “like a woman” would be more accurate than “like a girl”, but the latter makes for a much more eye-catching headline. Warren Buffett’s method is summarized this way:
[...] 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. He’s patient and does thorough research. He waits for the right price to buy. He seeks to never sell the companies he invests in. He’s the anti-trader, if you will.
Yep, you heard it here — Warren Buffett invests like a girl. And that’s a very good thing.
Compare that to women’s investing style:
- Women spend more time researching their investment choices than men do
- Men trade 45% more often than women do. But by trading less often, women get better returns and also save on transaction costs and capital gains taxes.
- Women tend to look at more than just numbers when deciding whether to invest in a company. They invest in companies they feel good about ethically and personally
- Women also have a keen eye when it comes to identifying companies poised for greatness. They typically look beyond the shiniest, newest bio-techno-gadget and focus instead on retailers meeting their needs, on products that they can’t live without, and on consumer goods they buy in their day-to-day lives
The results are telling: women’s portfolios gained 1.4% more than men’s portfolios did. Single women did even better than single men, with 2.3% greater gains.
JLP of All Financial Matters recently posted a year-by-year listing of Berkshire Hathaway’s year-end closing prices for their Class A stock. I, for one, wouldn’t mind investing like a girl, if it meant boasting such a performance.
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