Curious Capitalist

Sorry, Paul Tudor Jones: It’s Male — Not Female — Traders We Should Be Worried About

  • Share
  • Read Later
Jin Lee / Bloomberg / Getty Images

A female trader works on the floor of the New York Stock Exchange in New York City on Jan. 3, 2012

Reading hedge-fund giant Paul Tudor Jones’ recent comments that having babies makes women bad traders reminded me of a close friend of mine, a very senior investment banker at a major Wall Street firm, who once worked for someone she called the Screamer. I would regularly show up to lunches or dinners with my friend and hear stories about how the Screamer had shouted yet another round of expletives during a conference call or thrown something at his secretary. I was always amazed that a man this emotionally unhinged had been allowed to hold any position of power, let alone one in which he was running billions of dollars of other people’s money.

Which is why Jones’ comments are so fascinating, and so flawed. If I’m reading his rather convoluted argument correctly, he’s saying that women can’t be good traders because they are too much at the mercy of their emotions. Actually, plenty of research has shown just the opposite. In the best-selling book, The Hour Between Dog and Wolf, John Coates, a former trader who is now a neuroscientist at Cambridge University, looks at just how emotionally influenced traders — mainly men — are. Coates finds that fluctuations in traders’ hormones play a crucial and unexamined role in the financial markets, creating major boom-and-bust cycles as vast amounts of dopamine flood the brain during a good — or bad — trade. Indeed, it’s a snowballing cycle, as traders need ever-bigger doses of dopamine to feel the buzz.

London Whale anyone?

What’s interesting is that female traders don’t go as much to those extremes. Research shows they tend to be more risk-adverse, yes, but that means that while they avoid the highs and lows, they can often have better returns than men.

(MORE: Why We Need More Female Traders on Wall Street)

I’m guessing that vast amounts of dopamine in the brain during a billion-dollar trade make you just as emotional as having a baby does. Maybe that’s one reason that regulators on both sides of the Atlantic are looking to start tracking traders’ hormone levels as a matter of public policy and financial safety, as my friend, Financial Times columnist Gillian Tett, noted in a piece last year.

All I can say is that if I had my money invested with Paul Tudor Jones, I might want to know more about his risk-mitigation strategies.

12 comments
Briacpa
Briacpa

He stuck his foot in his mouth by his comments which were neither respectful or accurate. Women traders overall do better then their male counterparts because they are more level headed and think things through before proceeding. Men do function more on emotions and ego. That is clear to anyone who works in a (any) professional field and anyone that follows human history (as well as trader activity). Studies have also proven this to be true....hmmmm .."random studies" of course when they show what you don't want them too :)). What I find amusing is that so many men "come to his rescue". ..Emotions are once again ruling what they think and say.  He made a false statement, a sexist statement and it certainly wasn't one of his brightest moments. An apology was warranted he realized it and he gave it. End of discussion. Next?

swh01
swh01 like.author.displayName 1 Like

sorry, not so famous writer to know your name, but he's right. At least on the divorce part(don't know about having a baby, since, well... I'm of the wrong sex for that). Or at least it clearly affected my trading; but, in divorce's case, you figure out pretty fast you're not working as intended and can take a break(or at least I did). With a child, on the other hand... if he/she won't die a premature death, that break might be pretty long...


plus the whole idea is ridiculous. Here I am at midnight, saturday, trying to dig things about Jones... What reasonable person with a child do that at this time? Hello, it's a 16h/day job...

Beside time... where from the energy? Trading is probably the most energy intensive thing in the world(might look like starring at a screen and doing nothing, but if 6-7 figures numbers are moving with or against you, trust me... it's pretty draining).

and pulling some random study won't change reality...

cescacraig
cescacraig

Paul Jones was very encouraging of my interest in technical trading as a soon to be college graduate (woman), he mentored lots of would be commodity traders, men and women. When he started the Robin Hood Foundation I thought "there he goes again, mentoring" I think the coverage has been unfair.

M456
M456 like.author.displayName 1 Like

I love how this brainless nitwit questions Paul Tudor Jones' risk management. He is the most risk averse person on the planet. He talks about how 90% of what he worries about is losing money. He has had one small losing year in 32 years.

And no. He didn't say women couldn't be great traders. He said there will always be fewer great women traders because they traditionally raise children.  How many great woman traders are there vs men. I can think of hundreds of top male traders. I can think of Leda Braga and recently deceased Liz Cheval and ???????

This isn't really a debatable issue.

4714026
4714026

the term is "risk averse" not "risk adverse"

some men are great traders and some women are great traders

go further than that in gender analysis and you get into the stupid zone very quickly

the rule on Wall Street is everyone gets a fair shot - men, women, black, white, hispanic, asian, whatever

a lot of women like to have babies, including traders who are women - and that is a good thing

what is the problem ?

jhoots312
jhoots312

These days you can predict a Time article's premise without reading it... so so so boring. First who cares about Tudor's stupid comments. Second, besides whining what is this article??? No insight what-so-ever.

Second, if you want a factor which is highly correlated to good traders, it the same thing that makes people good NFL players, good race car driver (a growing number of females), and good at any other 'game' where aggressive behavior wins: Testosterone. You can also measure it based on ring versus index finger. There are bunches of studies on this - and women can also have a very sizable amount of testosterone. One thing is for sure - aggressive behavior wins in winner-take-all games, and generally men tend to act more aggressively  Circumstance depend on whether that is good or bad... 

SuZieCoyote
SuZieCoyote

Tudor Jones's comments are simply sexist musings, with no merit.  I see a lot of people here are demanding the author cite sources, but Tudor never cited anything to back up his flawed premises.  Sexism is back in style, that is all.  This is the last noisy (and lazy) spouting of the male entitled.  He would not say those sorts of things unless he was enabled to do so by the many misogynists in the media.

X_Liu
X_Liu

Tudor Jone's comments certainly are glib and flawed but your critique is reflexively defensive and about as a sharp as a butter knife. 

If he is cherrypicking from his experience that women are bad traders or having children make you less focused, then you are debunking his points by cherrypicking your own facts. 

>The Hour Between Dog and Wolf, John Coates, a former trader who is now a neuroscientist at Cambridge University, looks at just how emotionally influenced traders – mainly men – are. 

Now is this a gender comparison study or are you saying that just because there are more men in this group that it is representative of male traders and not women traders? Because that would causally ridiculous and makes you sounds incredible insecure. 

eifg
eifg

I think you are reading his comments to mean what you want them to mean so that you can write the response that you want to write. He did not say that women cannot be successful traders. He said that in his experience he found that once most women have children that the responsibilities and feeling that come with children tend to be a distraction than detracts from their performance as macro traders. He also said that men going through a divorce face distractions that diminish their performance. I can see where that profession is very competitive and could demand a level of commitment and sacrifice that many people are not willing or able to make.  I don't know if he is right or wrong but people responding to his remarks should respond to what he said and not what they wish he had said in order to advance an agenda.

rcs1057
rcs1057

@eifg well said. All he said is that women who have children, on the whole, can not maintain the concentration necessary to be a top trader, a job which is very mentally demanding.  He said the same thing about divorced men.  He is really saying that in order to be a top trader, you need to have complete focus and be free from distraction. 

4714026
4714026

whether you like George Soros's politics or not, he is one of the great figures of modern finance

and what would one of his centerpiece ideas on this likely be ?  in accordance with his ideas on "reflexivity"

probably:   if you want it to matter, if you let it matter, if you act like it matters, if you tell people it matters - then it will matter

alternatively - we can let the machine do its work and not unduly intrude into the traders' personal lives

follow the rule that says on Wall Street we treat people equally and back that up with proper and appropriate employment policies and management discussion that supports that

and if we let the machine do its work - let people work on the basis of effort, commitment, service to others, self-initiative, profitability, cost control ---- then the rewards for all concerned will be greater and we can add our corollary to the application of Mr. Soros's reflexivity ideas as they relate to this issue ---- our corollary being "the less silly quarrelling, the better". 

Matt Lechner - Chairman, WSSIG - the Wall Street Special Interest Group "supporting and growing America's interests in the global capital markets"  4714026@optonline.net