Women With Children Shouldn't Trade Stocks (But They're Not the Only Ones)

Women with children playing in Central Park, New York City
Women with children should not trade stocks ... at least, not according to Paul Tudor Jones.

Last week, the billionaire founder of hedge fund management company Tudor Investment set the Internet rant-o-sphere on fire when a video of him speaking at an investment symposium at the University of Virginia leaked out.

Paul Tudor Jones
Paul Tudor Jones (Getty Images)
Among other impolitic statements caught on tape, Jones was heard to have...
  • Called children a "killer" of one's ability to focus on trading stocks.
  • Declared, "You will never see as many great women investors or traders as men -- period, end of story."
  • Regaled other members of his discussion panel with the story of two former colleagues at EF Hutton, and what happened to their skills as traders after they had children: "As soon as that baby's lips touched that girl's bosom, forget it. ... Every single investment idea ... every desire to understand what is going to make this go up or go down is going to be overwhelmed ..."
  • Warned that "once you get past 30 ..." you've either learned how to trade or you haven't. The implication being that a woman's best child-bearing years can be spent rearing kids, or working -- but not both.
Then, in a moment of self-reflection, Jones added: "I've probably said too much and gotten myself in trouble."

Gee, Mr. Jones, Do You Think?!

Well, yes, Mr. Jones. In all honesty, you probably did get yourself in a bit of hot water with the PC crowd.

But that's OK. Because in the course of "opening mouth, inserting foot," you also opened the way for us to make another important observation: Maybe in the 1970s, when you first started trading stocks, people believed that women with children shouldn't trade stocks. Here in the 21st century, though, it's probably more accurate to say that no one should trade stocks. No humans, at least. Emphasis on the word "trade."

These days, a person -- man or woman, childless or parent -- who wants to trade in and out of stocks isn't just competing with his fellow man (etc.). He's competing with professional traders at multinational megafirms, armed with limitless manpower, servers full of historical data to draw upon, and ranks of Bloomberg terminals to crunch the data. Any lone individual who thinks he can compete with all that, and win, is just plain crazy -- and it gets worse.

You also have computers to worry about. Hedge-fund-run, turbocharged supercomputers, loaded with high-frequency trading algorithms that see a stock move and promptly execute 10,000 micro-trades on the Nasdaq at light speed ... all while you're still mousing over to the "buy it now" button.

Trying to beat those odds -- whether you're a young new mom or a rich, middle-aged white guy with no kids and a degree from Wharton -- isn't just egotistical. It's downright suicidal.

Play to Your Strengths

So what's the average investor to do when faced with such long odds? Give up, log off, and resign yourself to having your savings earn 0.01 percent interest in a checking account? Hardly. Even if you can't succeed by trading stocks, you can still beat the market bigwigs by investing in stocks for the long-term.

Remember: Research shows that despite all the manpower, data, and computers at their disposal, the average U.S. hedge fund still underperforms the S&P 500 over both three- and 10-year historical time periods. While the "professionals" are scrabbling for pennies on the NYSE trading floor, focused on their performance minute-to-minute, they're ignoring the bigger picture.

And that's where you have an advantage.

If stock traders have an edge over the small investor in the short term, then over longer periods of time they're as likely as not to give up their short-term gains. Simply by buying and holding a basic S&P 500 index fund or ETF -- the SPDR S&P 500 (SPY), for example -- you can short-circuit the supercomputers' advantages, and outperform the majority of hedge funds.

When you get right down to it, Mr. Jones was more right than even he knew. Women with children shouldn't trade stocks. No one should trade stocks. But we can all do pretty well by investing in stocks.

Motley Fool contributor Rich Smith does have kids, and doesn't trade stocks. He does, however, invest in them.

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June 11 2013 at 2:32 AM Report abuse rate up rate down Reply

Jeremy Phillips;

You are a Fraud-------you promised to give the name of a compahy and you lied. I listened to your speech because I had given my Email name----and I trusted the Motley Fool as a very reputable compajy.\
I recently lost my husband after 60+years of marriange and wanted to in vest in my futuire. ] I DIDN'T EXPECT YOU AAND THE MOTLEY FRAUD TO BE A COMPLETE FRAUD IN WHAT YOU SAID AND PROMISED!!!

June 02 2013 at 8:30 PM Report abuse rate up rate down Reply

Because women are basically honest. They aren't crooks. They don't lie. USUALLY.
They don't steal from others......especially other women.

June 01 2013 at 9:58 AM Report abuse rate up rate down Reply

He's right get over it !

June 01 2013 at 8:05 AM Report abuse rate up rate down Reply

This guy is a classic example that demonstrates how the ability to make money has NOTHING whatsoever to do with intelligence. What a dope.

June 01 2013 at 7:38 AM Report abuse rate up rate down Reply

But women, with or without children, should have to register their bodies for possible military conscription just like men, with or without children, are compelled to do under the federal military Selective Service Act. Women whine about perceived sexist words; men suffer and die (typically in silence) because of real sexist policies and laws.

May 31 2013 at 9:57 PM Report abuse rate up rate down Reply
1 reply to lklex's comment

My neighbor is about 23 years old, she is married. They have a 2 year old little boy.
They are Both in the military. They have BOTH been to IRAQ, and Afghanistan. MORE THAN ONCE. More than twice. Both have carried guns and used them there. Both of them have seen friends die in both places. So don't get off on women not being compelled to do under the federal military service. THEY DO. MANY OF THEM.

June 01 2013 at 10:02 AM Report abuse rate up rate down Reply
Darryl Ehlers

Hi Folks I am a farmer, no different than being a wife, I learned stocks by margining, ( which is a way to learn ) but not the way to live.. It did teach me how to be a bottom fisher, which is buying low as per graph, everything takes a dip and that is where you are. The big boys runs the graph up and down, but when bad news hits is where you must be at the bottom buying, but know where the bottom average is and if thew stocks pay dividends
Darryl Ehlers

May 31 2013 at 6:11 PM Report abuse rate up rate down Reply
1 reply to Darryl Ehlers's comment

I wish this big mouth had an actual job like a farmer has. He contributes exactly NOTHING to society because he manufactures nothing, grows nothing and simply plays with stocks all day while the rest of the world carries him.
Raised on a farm and truthfully the only profession the world simply can't do without.You need air, water, and food and two ot them are free.

May 31 2013 at 8:22 PM Report abuse +2 rate up rate down Reply

I just watched the video and have to say Jones is an ignorant and cold version of some type of life form--just not sure which kind.
He is a prime example of those who give old white men such a bad name.

May 31 2013 at 6:02 PM Report abuse +3 rate up rate down Reply

I'd rather invest in mutating diseases. Aids failed. We have cancer, but need more.

May 31 2013 at 5:45 PM Report abuse rate up rate down Reply
Steve Schiffman

Words and their meanings:

1. Do people not invest in stocks by trading them on an exchange, with the broker/dealer/faciliator getting a handling fee or commission?

2. Is there such a person as a "day investor"?

3. Do medical doctors and attorneys really "practice" their professon (or "trade")?

4. Ad nauseam!

May 31 2013 at 5:29 PM Report abuse rate up rate down Reply