Blog by Tech Ready
An American financier ranks amongst the most successful investors in history, turning around US$100 million into US$4.36 billion. Can you guess the name?
George, Paul, Ben, Gary or Henry?
Nope, it was Henrietta Howland Green. Ms Green’s love of a ‘holding period of forever’ and steely conviction in her stock choices had her ranked as one of the greatest investors in history.
Despite her passing away in 1916, she encouraged many, in the face of the GFC, to ask the question,
“Are women better at investing than men? Are they better at running startups and companies? Are they more investable?”
A study by a team from the University of California, Berkeley, based on 35,000 brokerage accounts during a six-year period in the early 1990s, found that women generated returns of one percentage point more on average per year than their male counterparts.
Over a period of time this is a significant outperformance given that the long-term average real rate of return on stocks is around 5%.
“We found that men traded far more than women”, Odean says. “Since buying and selling costs money, that over-activity reduced the investment gains of men by a significant margin”
The study put this down to a number of factors, good behaviour, long term thinking, less knee jerk panic reactions, more realistic, cautious, less risk taking, less susceptible to over-exuberance, an inclination to not sell at the bottom of the market and apparently ‘Men, it seems, are more prone to exaggerating their knowledge and abilities than women, across a range of activities.’ Odean says!