Warren Buffett Invests Like a Girl: And Why You Should, Too (Motley Fool)

Investing isn't a man's world anymore—and that's a good thing for individual portfolios, Wall Street, and the world's financial system.

Warren Buffett and the women of the world have one thing in common: They are better investors than the average man. Psychologists and scientists have shown that women have the kind of temperaments that help them achieve long-term success in the market. The calamities of the past several years have only provided more statistical and anecdotal evidence of the same. Here are just a few characteristics of female investors that distinguish them from their male counterparts:

• Women spend more time researching their investment choices and tend to take less risk than men do. This prevents them from chasing "hot" tips and trading on whims. Women are also more likely to seek out information that challenges their assumptions.
• One study found that men trade 45 percent more often than women do, and although men are more confident investors, they are also more susceptible to becoming overconfident. By trading more often—and without enough research—men reduce their net returns and increase transaction costs and capital gains taxes.
• Women aren't as susceptible to peer pressure as men are, which results in a more levelheaded, patient approach to investing.
• Women have less testosterone than men do (not a surprise, we know). New and continually unfolding science points to the possibility that testosterone is responsible for herdlike risk-taking behavior from men in the financial markets.

This book shows that women, with their patience and good decision making, epitomize the Foolish investment philosophy, as well as the investment temperament of the most successful investor in history: Warren Buffett. While men may be brash, compulsive, and overly daring, women tend to be more studious, skeptical, and reasonable. The book will empower and educate women—and the men smart enough to embrace a "feminine" investing style—on how to strengthen their portfolios and find success in the market.

“Get out of the car. Just get out of the car.”

That would be me, talking to myself, trying to calm my nerves, one brisk morning in late April, as I sat outside a brunch in Omaha, waiting to go in. Not just any brunch, mind you. But a brunch hosted by Warren Buffett, the greatest investor the world’s ever known, and the third richest (at last count) guy on the planet.

Thinking back to my childhood in Mississippi, growing up in a tiny three-stop-light town (literally – three!), I’d have never imagined I’d one day be face-to-face with the Oracle of Omaha. But, then, I’d have never imagined, either, that my father would die when I was just shy of 15, and that that traumatic experience would be the thing that would lead me, indirectly, to Buffett himself.

But life is funny that way, and the threads that connect events often aren’t visible to us until well after the fact.

Because my father died, it meant that I would inherit some money upon my 21st birthday. And because of that, I decided, about a year out of high school, to learn about investing, so I didn’t squander the opportunity presented to me by that money. It wasn’t an overwhelming amount of money—nothing that was going to set me up for the high life anytime soon—but it was enough that I knew I didn’t want to blow it. I also knew no one would do it for me, and had I not armed myself with knowledge, I was liable to spend it instead of saving it and investing it. That would have been a disappointing outcome. And I hated the thought of disappointing my father even after his death.

In my quest to learn how to invest, I stumbled across a book about this guy: Warren Buffett. I’d never heard of him, but the story of his life, and his success, looked interesting to me. It also resonated – small-town smarty-pants makes good in the great big world out there. It was what I hoped to one day do myself, in my own way.

So I read that Buffett biography (it was Andrew Kilpatrick’s book Of Permanent Value, many editions ago). And I loved everything about it. I loved how Buffett just did his own thing out in Omaha. I loved how his style of investing seemed to be focused on buying and holding quality companies for the long-term, versus following charts and trading patterns and all these other confusing things I was learning about.

It dawned on me that I could do what Buffett did, that I could invest that money in solid, well-run companies; companies I understood, companies I would be proud to own a part of. I didn’t have to chase the latest investment fad or load fancy trading software onto my computer. Buffett didn’t even have a computer!

Several short years after learning about Buffett and his incredible investing success, I discovered The Motley Fool, and was immediately drawn to its mission of empowering and educating individual investors. It was there—after working my way up to Editor-In-Chief—that I began to notice the groundswell of research on women and investing. Thanks to my familiarity with Buffett and, of course, my own gender, the connection emerged for me—and the idea for Warren Buffett Invests Like a Girl was born.

Buffett inspired me as a young woman and would remain an inspiration for me, through investing mistakes and successes, through market rallies and market panics, through it all. I would have never imagined, looking back on that day when I first picked up that book on him, that one day years later I would write my own book on Buffett, and that that would be the thing that would allow me to meet him and to thank him for his influence on my life.

But that’s exactly what happened.

I did eventually manage to get out of the car that morning at brunch. And when I met Buffett face-to-face it was so comfortable, like seeing an old friend again. Because in a way that’s what he is to me, and to so many other investors who’ve learned from him over the years.

So I say it again here, for my father, for myself, and for anyone else who has been inspired by him: thank you, Mr. Buffett.