Intelligent Investor co-owner Greg Hoffman attended the Aurizon investor day yesterday. He sent me an email this morning with a few thoughts on the company and some of the potential opportunities ahead for it. But the most striking thing about the day was the preponderance of testosterone:
The room (management and analysts) was a sea of guys in blue suits. Not one of the ten Aurizon management team presenting was a female. And in the audience, I'd say it was 90% male, if not 95%. It felt a bit uncomfortable for me, let alone the handful of women there.
Investment banks are still dominated by males. But the value investing community is worse. Gareth Brown attended Value Investing Seminar in Italy last week where the 22 exclusively-male speakers were presenting to a 200-strong crowd of exclusively-male value investors.
It’s a disgrace. And we’re no better. Intelligent Investor has not employed one female analyst in the 10 years Greg and I have owned the business. The organisation today employs more than 20 people, of whom just four are female. They work in marketing, design, customer service and accounting.
Embarrassing, yes. But it’s also perplexing. We’re not exclusively male because we keep selecting males over females. We’re exclusively male because we only get job applications from men. I reckon we have had more than 200 analyst applications over the past 10 years, of which two have been from females.
Every second week we get a letter from a uni student who thinks they are going to be the next Warren Buffett. To a man they are men.
So my question is this: why is this occupation (and our company) unattractive to females?
It’s not a lack of graduates. My university class was close to 50% female. And it’s not a lack of interest. It’s not quite half, but a significant portion of Intelligent Investor members are female.
Perhaps it takes a certain naivety and ego to think you can beat the market. Perhaps that trait is more prevalent amongst the male population. But I am at something of a loss.
Flexible work hours, good potential pay and the opportunity for intellectual challenge every day for the rest of your life. I just don’t understand why that’s not appealing to intelligent female university graduates.
So you tell me, where are all the female value investors?
23 thoughts on “Where are the Female Value Investors?”
I wonder whether it is perhaps that females generally take it harder when they have ‘failed’ someone. Whilst professional competence is one thing, could it be that the effect of recommeding a ‘dud’ stock (and subsequently affecting those who have taken that advice) is taken more personally by a female than a male? I am not saying that the males do not care or have no empathy, just that they are able to move on and move past it better.
Managing the household is one thing – it is within the woman’s control and she can fix things because she knows the family members so intimately. But to be responsible for a multitude of unknown strangers is perhaps a little overwhelming for the majority?
I am not referring to all female – there are exceptions – but perhaps the majority.
I studied Finance at University, even went on and did my Master of Finance (a few years ago now)
I don’t work in the industry – I have no intention of ever doing so.
My reasoning all comes down to my perception of the work environment and people.
By the end of my Masters it felt like they were teaching us how to walk right on the line of the law to make the best possible gain, with little regard for the implications to others/society. The people I was studying with that were working in the industry constantly had conversations along the lines of ‘what are you driving this year?’
I just didn’t have the stomach for it – decided to move into the Logistics/Supply Chain industry where people are more practical and don’t stay at work until 2am just to prove how important they are.
Again – all based on perception, but that’s why I didn’t stay working in finance.
As a general note which applies to the Engineering response to: I think that women place higher value on their time . Finance Analysts as well as Construction Managers work long hours for marginal extra reward. Most women I know chose work based not only on money but also on lifestyle, and I don’t only mean children.
There is more to life than money.
PS. The Intelligent Investor podcasts are a great example of the old boys club that is finance “Good Morning Gents”
Slight correction, there was 3 or 4 women in the crowd in Italy, and the total crowd was probably less than 200. But this just proves the point.
The US has gone further down the path of attracting/encouraging excellent female analysts, I’ve listened to quite a few at value investing conferences over the years. Maybe it will happen with time.
I also think Jane might be onto something. Because the number of female analysts in the available pool is still small, they’re less likely to come to lower paying II? There seems to be a higher percentage of female names on brokerage research and among fund managers than what we’ve seen in our applicantions. It’s not a satisfying explanation but I wonder if it has an effect from our business’s point of view? But it doesn’t address your key question about the small numbers entering the industry in total.
The testosterone/risk taking/ego idea seems a logical explanation, but I worked on a bond trading desk nearly 20 years ago, and perhaps a third of the traders were women then. There’s far less bravado in managing an equity portfolio than that world. Also, the number of women working in scientific research – deep research for an uncertain payoff – is perhaps further counter evidence.
I have had similar thoughts for several years. I used to work for an organisation with over 200 employees, without having one indigenous employee, yet approx five percent of the customers were indigenous. My employer employed one who did not last long before they resigned. This employee was extremely shy and did not fit in to the culture of the place. Perhaps they also felt they were an “outsider.” Employing two rather than one may have helped. This is a situation where you may have to think outside the box. Perhaps the hours you guys work does not fit in with the requirements of some women who have kids or a looking after elderly parents? One idea is to offer a part-time role, with more family friendly hours (reduced salary of course). This may be attractive to suitably qualified experienced women. Another option is to look at what skills a successful analyst needs (you mentioned skepticism earlier) and find out what professions need these skills and target people in these professions. Is the analyst you are looking for working in a lab somewhere? Should you be looking for women with a psychology background, or running their own business? Perhaps one of your subscribers is a person you need, or they know somebody who is perfect for the role? Perhaps there is a women working in a finance public service department, or recently retired from one, who is looking for this type of role? (The public service employs a lot of qualified women). Perhaps some of the female company executives you offer some help or advice? My question is, are you looking wide enough?
Where are the female value investors? Married. 😛 After all, marriage is the ultimate value play..
With the benefit of hindsight (a great thing) I missed what would have been my perfect career. Instead I did engineering and worked in the mining industry. If I lived in Sydney I would be knocking on the door of your office but now I am retired and living on the Gold Coast so managing my SMSF and being a value investor keeps my brain active. Sometimes when I am listening to one of your podcasts I want to butt into the conversation and give a woman’s point of view when I think your thinking is off track……….after all it is women who make many of the purchase decisions in most households.
Here you go guys, in the words of someone you can understand 😉
Some very thoughtful points made in these posts. Selectively trawling them: the two (at minimum) women II will headhunt in the finance, maths, science, whatever sectors could work part-time, jobshare, not necessarily with each other, or be mentored off-site whilst still working/studying. The brief might take into account some of the comments made here and include encouragement of different approaches to value investing. Experience from earlier days when I’ve worked as a radio journalist and observed how long it took women to get into specific areas like finance, and then was involved in the first stages of Indigenous recruitment, suggests you need at least two buddies, a great manager (you) and an office that can deal with people who may not initially produce the goods in the normal manner. Sounds like a music experiment? Well, we know you still have to make money and the fact that someone may not make it is not a failure on any side, merely experience.
The fact of the matter is, men and women are different. Investing is something that obviously doesn’t appeal to the majority of women and is therefore one of those differences. How did you go guys at II go in your single years trying to pick-up women with a line about the virtues of value investing? I’m a male who regularly attends Weight Watchers (95% women), yoga (90% women), play football (soccer) (80% male) and golf (95% male). Being passionate about all of these things, I sometimes wonder how the minority gender in each case isn’t as keen as I am, but at the end of the day I simply put it down to the fact that men and women are just different and thank goodness for that as it makes the world a much more interesting place!
Perhaps the situation is better in larger investment banks where there are many women in key financial analyst and leadership roles. I’d point to Giselle Roux (ex-Chief Investment Officer for JBWere) as a great example.
Giselle would make a great guest for a future podcast to provide a different market perspective, and an insight to her personal experiences in the finance industry.
(I may be able to put you in touch if interested)
We’re here. We’re interested in investing in companies that are well managed and who have a coherent business plan.
Value investors like to read the information and views of people who are totally involved, but are themselves are multi-tasking. Probably maintaining all sorts of relationships with family and friends, though that needs some research.
As you say, the door is open. Women may apply. Take your argument to the universities. Speak to the female undergraduates in an informal way, say a lunchtime chat. I’m sure you could make a difference.
Recently I have been reading Susan Pinker’s “The Sexual Paradox” and I think it goes a long way to answering this question.