How to succeed in stocks without really trying

August 15, 2011|By TIM ROWLAND |

The headline in the ever-dignified New York Post last week read that the stock market had been up and down more than a hooker's pants. This headline was probably written by a man.

I say that because, in the other stock-related news I found interesting last week, it was announced that women are better at playing the market than men.

The stated reason will have social studiers puzzling until their puzzlers are sore: When it comes to stocks, women are less emotional than men.

I guess you could call this the "fantasy football paradigm."

I know, on the surface it makes no sense — men more emotional than women? And these would be the same women who will adopt a three-legged, one-eyed rabid dog because they believe it "needs" them? The ones who will wear a mink coat to a restaurant and then refuse to order veal?

The same.

But when it comes to stocks, women are the stoic players with ice water in their veins. They are the ones who generate solid returns while men are losing their shirts.

The authors of this recent study paint women as the Cruella de Vils of Wall Street, able to cut loose their weak, ailing stocks, the ones that men would keep because they can't admit they made a mistake.

Women prowl the market with the cold, unblinking eye of a reptilian predator, snapping up bargain stocks as if they were a half-priced pair of Manolo Blahniks.

Could be, I guess. But my theory is that unlike men, women don't have an irrational fascination with opaque corporations and arcane, trailing 12-month returns and price-to-sales ratios.

Women are better because they don't care. You ask a man what he's invested in and he'll say "Kinder Morgan Management LLC, CBOE Holdings Inc., Artisan Global Value Investor, DJ U.S. Equipment & Services index ETF ..."

You ask a woman what she's invested in and she'll say "stocks."

A man will dissect a stock as painstakingly and tediously as a crime-scene investigator will go over a corpse that's spent the last six months underwater. The man will find some lint-like detail in a lottery's worth of numbers that he thinks has given him a special insight into the stock's impending performance.

If the stock goes down instead of up, it will not be because he was wrong, it will be because other stock traders have not discovered this special insight. But they will any day now. And if not, that man will ride the stock all the way to bankruptcy.

A woman, on the other hand, will say "I use a lot of Clorox; all my friends use a lot of Clorox. Therefore, I will buy stock in Clorox."

The other reason women succeed is that, unlike men, they are too busy doing things that matter. As the market flashes up and down, a man will sit there on E-trade, gripping his laptop so tight that capacitors will start popping out the back of it. He will sell everything, then buy back everything he just sold, as his blood pressure takes the elevator straight to the observation deck.

A woman, meanwhile, will be preparing her budget presentation at work, buying back-to-school supplies, cleaning out the parents' attic, swinging by the store for groceries, planting bulbs and shopping for homeowners insurance.

In short, women succeed in the market because, unlike men, they are too busy to muck it all up. That's a lesson, I believe, that probably extends beyond stocks.

Tim Rowland is a Herald-Mail columnist. He can be reached at 301-733-5131, ext. 6997, or via email at Tune in to the Rowland Rant at, on or on Antietam Cable's WCL-TV Channel 30 at 6:30 p.m. New episodes are released every Wednesday.

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