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Women with children mustn’t trade stocks … at least, not according to Paul Tudor Jones.
Last week, the billionaire creator of hedge fund management company Tudor Investment set the Internet rant-o-sphere on fire when a video of him speaking at a financial investment symposium at the University of Virginia leaked out.
Paul Tudor Jones (Getty Images)Among other impolitic statementscaught on tape, Jones was heard to have…
- Called kids a ‘killer’ of one’s capability to concentrate on trading stocks.
- Declared, ‘You’ll never ever see as lots of wonderful ladies investors or traders as men– period, end of tale.’
- Regaled various other members of his discussion panel with the story of 2 previous coworkers at EF Hutton, and what happened to their skills as traders after they’d kids: ‘As quickly as that child’s lips touched that girl’s bosom, forget it. … Every financial investment concept … every need to understand exactly what’s visiting make this go up or go down is going to be bewildered …’
- Warned that ‘once you surpass 30 …’ you’ve actually either found out the best ways to trade or you’ve not. The implication being that a female’s best child-bearing years can be spent rearing children, or working– however not both.
Then, in a minute of self-reflection, Jones added: ‘I have probably stated too much and gotten myself in trouble.’
Gee, Mr. Jones, Do You Think?!
Well, yes, Mr. Jones. In all honesty, you most likely did get yourself in a bit of hot water with the PC crowd.
But that’s OKAY. Due to the fact that in the course of ‘opening mouth, placing foot,’ you likewise opened the means for us to make an additional essential observation: Maybe in the 1970s, when you initially started trading stocks, individuals thought that women with children shouldn’t trade stocks. Here in the 21st century, though, it’s probably more accurate to say that no one need to trade stocks. No humans, at least. Emphasis on the word ‘trade.’
These days, a person– guy or female, childless or moms and dad– who wishes to sell and out of stocks is not really just taking on his fellow man (and so on). He’s competing with professional traders at multinational megafirms, equipped with limitless workforce, servers filled with historic information to draw upon, and ranks of Bloomberg terminals to crunch the data. Any lone person who thinks he can take on all that, and succeed, is simply plain insane– and it worsens.
You likewise have computers to worry about. Hedge-fund-run, turbocharged supercomputers, loaded with high-frequency trading algorithms that see a stock step and quickly perform 10,000 micro-trades on the Nasdaq at light rate … all while you are still mousing over to the ‘get it now’ button.
Trying to beat those chances– whether you are a young brand-new mother or a rich, middle-aged white man with no kids and a degree from Wharton– is not really simply egotistical. It’s downright suicidal.
Play to Your Strengths
So what’s the average investor to do when faced with such long odds? Quit, log off, and resign yourself to having your cost savings earn 0.01 percent interest in a checking account? Barely. Even if you cannot succeed by trading stocks, you can still beat the marketplace bigwigs by buying stocks for the long-term.
Remember: Research shows that in spite of all the workforce, data, and computer systems at their disposal, the average UNITED STATE hedge fund still underperforms the S&P 500 over both 3- and 10-year historical time periods. While the ‘specialists’ are scrabbling for pennies on the NYSE trading floor, concentrated on their efficiency minute-to-minute, they are disregarding the larger image.
And that’s where you’ve an advantage.
If stock traders have an edge over the little investor in the short term, then over longer time frames they are as most likely as not to quit their short-term gains. Simply bybuying and holding a basic S&P 500 index fund or ETF– the SPDR S&P 500 (SPY), for example– you can short-circuit the supercomputers’ advantages, and outshine most of hedge funds.
When you get right down to it, Mr. Jones was more right than even he understood. Females with kids shouldn’t trade stocks. Nobody needs to trade stocks. But we can all do pretty well by investing in stocks.
Motley Fool factor Rich Smith does have children, and does not trade stocks. He does, nonetheless, invest in them.