In Think Like the Great Investors, Colin Nicholson points out that studies have shown women tend to be better traders. Some of the advantages women have include are they:
- are less confident;
- take less personal credit for their success;
- spend more time analysing their trades;
- take more notice of expert advice;
- make fewer transactions;
- don’t expect consistently high returns; and
- buy less small, volatile stocks than men do.
For all that, when I think of the famous investors, I can’t think of a single one. Though there must surely be many. Where are the female Soros/Buffett/Tudor-Jones’s? Even female finance writers are thin on the ground. Perhaps that’s due to the second point in the list above.
The key takeaway is that overconfidence leads us into bad trades.