February 28th, 2012
When I first read the book title Warren Buffett Invests Like a Girl (HarperCollins, $25.99), I pictured the 80-year-old billionaire wearing a pinafore and pigtails as he studied annual reports. But thankfully, the book explores the more dignified image of a man who profits by tapping his feminine side. It’s a how-to manual on playing the market with sugar-and-spice sensibility.
Girls — women really — don’t trade as much, risk as much, or rush in as much as men, author LouAnn Lofton asserts. Neither does Buffett. Women think long term. So does Buffett. Women don’t let their egos get in the way of research. The down-home Buffett is known for doing his homework.
Still, who the heck wants to be called a girl except a girl? Lofton knew she had a provocative title, but she hoped her subject would approve. She mailed him a copy of the book (which is takingpreorders ahead of its June 21 release) and appeared in April at the annual Berkshire Hathaway (BRK.A) shareholders’ powwow in Omaha, Neb. This is where 30,000 acolytes hang on Buffett’s every word. He’s regularly listed among the world’s wealthiest people (No. 3 in 2011), and his portfolio has doubled the returns of the S&P 500 over the last 50 years, so listening to him is a pretty good idea.
Lofton, a reporter for The Motley Fool, asked the Oracle of Omaha, "Do you think you invest like a girl?" Buffett answered, "I say I’d probably plead guilty."
The two shared a laugh privately, further convincing Lofton that Buffett embodied the behaviors that both men and women need to use if they are to master the market.
"He was very amused by the title and very nice about it," she told DailyFinance. "I felt sure he’d have a sense of humor about the title. I also knew he’d recognize it as a compliment."
Don’t Invest With Your Testosterone
Lofton hatched the idea for her book in the summer of 2007. She had been reading study after study about women’s investment habits, and began correlating the results with Buffett’s asset-building methods. She noticed that many books have analyzed his strategy. What she thought they lacked was an examination of what made Buffett tick. "Nobody had addressed the idea of temperament when it comes to Buffett," she said.
The book suggests that unlike many of us guys, Buffett does not think with his … testosterone. We of the Y-chromosome set have let the aggression-inducing hormone take over our finances. We succumb to peer pressure and jump on stock tips we hear at the water cooler. We’ve become a desktop army of wannabe Gordon Gekkos, he of the "greed is good" credo in theWall Street movies.
The books tells us to invest in what we know (yeah, women do that apparently) and hold on through the rough times unless something freaky happens. Lofton said she hopes the book will inspire women and convert men.
"There’s a bigger story here where we can all learn to improve our temperaments," she said. "You and I may not be as smart as Buffett, but we can control the way we react."