Friday, May 24, 2013

Paul Tudor Jones on How Breast Feeding Interferes with Being a Good Trader

The usual suspects are all over this comment made by billionaire hedge fund trader Paul Tudor Jones, at a University of Virginia symposium in April:
You will never see as many great women investors or traders as men. Period. End of story. And the reason why is not because they’re not capable. They’re very capable. Like, one of my No. 1 rules as an investor is as soon as my manager, if I find out that manager is going through divorce, redeem immediately. Because the emotional distraction that comes from divorce is so overwhelming. The idea that you could think straight for 60 seconds and be able to make a rational decision is impossible, particularly when their kids are involved…Take a girl that was my age [20s] at that point in time, particularly back in the 70s. I can think of two that actually started E.F.

Hutton with me. Within four years, by 1980, right when I was getting ready to launch my company they both got married. Then they both had, which in my mind is as big of a killer as divorce is, they both had children. And as soon as that baby’s lips touched that girl’s bosom, forget it. Every single investment idea, every desire to understand what’s going to make this go up or go down is going to be overwhelmed by the most beautiful experience which a man will never share about a mode of connection between that mother and that baby. I just see it happen over and over.
Get this. WaPo obtained video footage of the symposium via a Freedom of Information Act request. Video here.

Jones may have a point about breast feeding women, but bad traders are not just limited to breast feeding women. Most people would make bad traders. You have to often go against the crowds, which by definition means doing trading different than most people. You have to be on super alert status while trading and you have to deal be able to deal with major stress. Not many can do this. Read Stanley Kroll's The Professional Commodity Trader to get just a hint of how difficult it is.

In a follow up statement, Jones said:
My off the cuff remarks at the University of Virginia were with regard to global macro traders, who are on-call 24/7 and of whom there are likely only a few thousand successful practitioners in the world today. Macro trading requires a high degree of skill, focus and repetition. Life events, such as birth, divorce, death of a loved one and other emotional highs and lows are obstacles to success in this specific field of finance.
I am not so sure Jones is completely right here. He is correct in saying that there may be only a few thousand successful trading practitioners in the world today, but I have seen up close some of the best traders go through divorce and other obstacles such as illness (at the same time!) and trade with magnificence during such a period

The best traders have to be right, be focused and they have to be able to deal with stress. You need all three. The best of them can compartmentalize stress and put divorce and other distractions in different drawers, to be dealt with when not trading.

Breast feeding for sure, I am guessing, would cause a trader to lose focus, but I also suspect that most women deal with stress different than men. They, I suspect, deal with stress in a way that would make it difficult for them to be super traders. I am not saying I have scientific evidence to back this up, but I suspect it is a rich vein for scientific investigation.

1 comment:

  1. Ahhh, should we point out to Paul that sucking on a woman's breast while trading blocks your view of the screen and tends to ruin your concentration?

    (thought not...)