Posts tagged ‘females’

Women & Bosoms on Wall Street According to Jones

Holiday Retail

Billionaire hedge fund manager of Tudor Investment Corporation, Paul Tudor Jones, recently suffered from a case of foot-in-mouth disease when he addressed a sensitive subject – the lack of female traders and investors on Wall Street. Rather than provide a diplomatic response to the mixed audience at a recent University of Virginia symposium, Tudor Jones went on an unambiguous rant. Here’s an excerpt:

“You will never see as many great women investors or traders as men. Period, end of story….As soon as that baby’s lips touch that girl’s bosom, forget it. Every single investment idea, every desire to understand what’s going to make this go up or gonna go down is going to be overwhelmed by the most beautiful experience, which a man will never share of that emotive connection between that mother and baby.”

 

A more complete review of his unfiltered response can be found in this video:

Clearly there is a massive minority of females on Wall Street, but why such an under-representation in this field relative to other female-heavy professional industries such as advertising, nursing, and teaching? I addressed this controversial subject in an earlier article (see Females in Finance)

If there are 155.8 million females in the United States and 151.8 million males (Census Bureau: October 2009), then how come only 6% of hedge fund managers (BusinessWeek), 8% of venture capitalists, and 15% of investment bankers are female (Harvard Magazine)? Is the finance field just an ol’ boys network of chauvinist pig-headed males who only hire their own? Maybe cultural factors such as upbringing and education are other factors that make math-related jobs more appealing to men? Or do the severe time-demands of the field force females to opt-out of the industry due to family priorities?

Although I’m sure family choices and quality of life are factors that play into the decision of entering the demanding finance industry, from my experience I would argue women are notoriously underrepresented even at younger ages. For example, anecdotal evidence coming from my investment management firm (Sidoxia Capital Management www.Sidoxia.com) clearly shows a preponderance of internship applications coming from males, even though it is premature for these students to fully contemplate family considerations at this young age.

If under-representation in the finance field is not caused by female choice, then perhaps the male dominated industry is merely a function of more men opting into the field (i.e., men are better suited for the industry)? More specifically, perhaps male brains are just wired differently? Some make the argument that all the testosterone permeating through male bodies leads them to positions involving more risk.  If you look at other risk related fields like gambling, women too are dramatic minorities, making up about 1/3 of total compulsive gamblers.

Women Better than Men?

The funny part about the under-representation of females in finance is that one study actually shows female hedge fund managers outperforming their male counterparts. Here’s what a BusinessWeek article had to say about female hedge fund managers:

A new study by Hedge Fund Research found that, from January 2000 through May 31, 2009, hedge funds run by women delivered nearly double the investment performance of those managed by men. Female managers produced average annual returns of 9%, versus 5.82% for men and, in 2008, when financial markets were cratering, funds run by women were down 9.6%, compared with a 19% decline for men.

 

The article goes onto to theorize that women may not be afraid of risk, but actually are better able to manage risk. A UC Davis study found that male managers traded 45% more than female managers, thereby reducing returns by -2.65% (about 1% more than females).

Regardless of the theories or studies used to explain gender risk appetite, the relative under-representation of females in finance is a fact. Many theories exist but further thought and research need to be conducted on the subject.

However, before Paul Tudor Jones is completely demonized or sent to the guillotine, let’s not forget Tudor Jones is obviously not your ordinary, heartless, cold-blooded Wall Street type, as evidenced by his recent philanthropic profile on 60 Minutes. Thanks to his generous efforts, Tudor Jones and his Robin Hood Foundation charity have raised more than $400 million for worthy causes since 1988.

While Paul Tudor Jones may not have harbored any malicious intent with regards to his comments, it may make sense for Tudor Jones to take a course on gender sensitivity. Bosoms and women may be an interesting subject for many, however he might consider filtering his commentary the next time he speaks to a large symposium recorded on the internet.

Wade W. Slome, CFA, CFP®

Plan. Invest. Prosper.

www.Sidoxia.com

See also:

Harvard Magazine article

BusinessWeek article on female fund managers

DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients hold positions in certain exchange traded funds (ETFs), but at the time of publishing SCM had no direct position in any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC Contact page.

 

 

May 25, 2013 at 1:25 pm Leave a comment

Females in Finance – Coming Out of Hibernation

I’m not sure if you are like me, but the annual media ritual of myopically breaking down the sale of every shoe, belt, cell phone, television, and pair of underwear during the November/December holiday season can become very grating. What makes it a little easier for me to swallow is the stable of attractive female retail analysts who are finally unleashed from their long hibernation slumbers to review their mall traffic and parking satellite findings. I’m a happily married man, but I still cannot complain about seeing these multi-threat beauties dissect sales trends and fashion fads. However, in this day and age, I’m not so sure that females feel the same way about their under-representation in the finance field?

If there are 155.8 million females in the United States and 151.8 million males (Census Bureau: October 2009), then how come only 6% of hedge fund managers (BusinessWeek), 8% of venture capitalists, and 15% of investment bankers are female (Harvard Magazine)? Is the finance field just an ol’ boys network of chauvinist pig-headed males who only hire their own? Or do the severe time-demands of the field force females to opt-out of the industry due to family priorities?

Although I’m sure family choices and quality of life are factors that play into the decision of entering the demanding finance industry, from my experience I would argue women are notoriously underrepresented even at younger ages (well before family considerations would weigh into career decisions). Maybe cultural factors such as upbringing and education are other factors that make math-related jobs more appealing to men?

If underrepresentation in the finance field is not caused by female choice, then perhaps the male dominated industry is merely a function of more men opting into the field (i.e., men are better suited for the industry). More specifically, perhaps male brains are just wired differently? Some make the argument that all the testosterone permeating through male bodies leads them to positions involving more risk.  If you look at other risk related fields like gambling, women too are dramatic minorities, making up about 1/3 of total compulsive gamblers.

Women Better than Men?

The funny part about the underrepresentation of females in finance is that one study actually shows female hedge fund managers outperforming their male counterparts. Here’s what a BusinessWeek article had to say about female hedge fund managers:

A new study by Hedge Fund Research found that, from January 2000 through May 31, 2009, hedge funds run by women delivered nearly double the investment performance of those managed by men. Female managers produced average annual returns of 9%, versus 5.82% for men and, in 2008, when financial markets were cratering, funds run by women were down 9.6%, compared with a 19% decline for men.

 

The article goes onto to theorize that women may not be afraid of risk, but actually are better able to manage risk. A UC Davis study found that male managers traded 45% more than female managers, thereby reducing returns by -2.65% (about 1% more than females).

Regardless of the theories or studies used to explain gender risk appetite, the relative underrepresentation of females in finance is a fact. I’ll let everyone else weigh in why that is the case, but in the meantime I will enjoy watching the female analysts explain the minute by minute account of UGG and iPad sales through the holiday shopping season.

Wade W. Slome, CFA, CFP® 

Plan. Invest. Prosper. 

www.Sidoxia.com

Related Articles:

Harvard Magazine article 

BusinessWeek article on female fund managers 

Bashful Path to Female Bankruptcies

DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients own certain exchange traded funds and AAPL, but at the time of publishing SCM had no direct position in DECK or any other security referenced in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC “Contact” page.

December 2, 2010 at 11:26 pm 4 comments

Bashful Path to Female Bankruptcy

The unrelenting expansion in bankruptcies does not discriminate on gender – you either have the money or you do not. Naomi Wolf, author of Give Me Liberty: A Handbook for American Revolutionaries, recently shed light on the underbelly of those suffering severe financial pain in this economic crisis…middle-class women.

How bad is it for middle class women?

“A new report shows that a million American middle-class women will find themselves in bankruptcy court this year. This is more women than will ‘graduate from college, receive a diagnosis of cancer, or file for divorce,’ according to the economist Elizabeth Warren.”

 

Wolf explores multiple factors in trying to explain this phenomenon. Surprisingly, higher education levels does not appear to prevent a higher percentage of bankruptcies in this large demographic.

If education levels are not a contributing factor, then what is? Here are some Wolf’s findings: 

1)      Awash in Debt: One explanation for the extra debt reliance is many of these positions occupied by this class of women are lower-paying, which requires women to tap credit lines more frequently. Also, many women have been targeted by luxury-goods manufacturers and credit-card companies. Repeated contacts by the marketers have led to more women succumbing to the consumerism messages shoveled to them.

2)      Credit Card Legislation: Wolf makes the case that financial credit card legislation introduced in 2005 disproportionately negatively impacts divorced wives because credit card companies get priority in the repayment line over critical child support payments. In other words, child support payments go to the credit card company rather than to the child, thereby creating an undue financial burden on the female caregiver.

3)      Skewed Emotional Beliefs about Money: The biggest issue regarding the emotional connection to finances is working-women “find it embarrassing to talk about money.” The article even acknowledges that many current generation women earn more than previous generations, but financial security has largely not improved because of the “money taboo.” I discover this taboo dynamic in my practice all the time. Part of the blame should be placed on the financial industry’s use of endless acronyms as smoke and mirrors to confuse and intimidate clients on the subject of money. I believe the better way to financial success is to empower clients through education and understanding, not deception and misinformation.

Wolf goes onto explain some of the confused financial thought processes held by this segment of women:

  • Negotiating salary increases is difficult for these women because it makes them feel “unfeminine.”
  • This class often fails to save because they falsely assume marriage will save them financially.

Unfortunately, the lack of financial literacy and dependence on the spouse leaves these women vulnerable to divorce and widowhood.

Working Class Women Better Prepared

Interestingly, Wolf’s findings point to working class women being much more financially literate and prepared in part because they have erased the notion of a knight in shining armor saving the day from their financial responsibilities. Bolstering her argument, Wolf references the success of the micro-finance programs being instituted to lower-class, working women in developing countries.

Wolf’s Solution

How do middle-class working women break this negative financial cycle? Wolf delivers the medicine directly by directing these women to break the “social role that casts middle-class women as polite, economically vague, underpaid, shopping-dazed dependents.” Opening their eyes to these issues will not erase all of the contributing factors, but women will be better equipped to deal with their financial problems.

From my perspective, there is no quick fix for immediate financial literacy. For those interested in learning more, I encourage you to read my article on personal finance, What to Do Now? Time to Get Your House in Order.

 Regardless of your financial knowledge maturity, like any discipline, the more time you put in to it, the more benefits you will receive.

Read Complete Naomi Wolf Article Here

Wade W. Slome, CFA, CFP®

Plan. Invest. Prosper. 

DISCLOSURE: Sidoxia Capital Management (SCM) and some of its clients own certain exchange traded funds, but at time of publishing had no direct positions in any company mentioned in this article. No information accessed through the Investing Caffeine (IC) website constitutes investment, financial, legal, tax or other advice nor is to be relied on in making an investment or other decision. Please read disclosure language on IC “Contact” page.

January 5, 2010 at 12:22 am 3 comments


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