U.S. Markets closed

Billionaire investor says babies are like divorce: they both 'kill' focus

The Daily Ticker
Paul Tudor Jones claims events like divorce and motherhood are "focus killers" to women.

Hedge fund billionaire Paul Tudor Jones is making headlines after talking about “baby’s lips on a girl’s bosom” as a career-stunting “killer” for female Wall Street traders. Speaking at a symposium, he went on to discuss why he thinks being a mother makes it more difficult to become a successful trader in an ultra-competitive and male-dominated field.

Tudor Jones made the controversial comments last month at a University of Virginia panel that was not supposed to be reported on or recorded. The Washington Post obtained the video through a Freedom of Information Act request (so much for off-the-record).

In his commentary, Tudor Jones seemed to base his "typical female" case-study on two "girls" he started working with in the 1970s.

In a statement to The Post, Tudor Jones responded to the criticism he's received after his comments went viral.

He clarified that his remarks specifically referred to one area of trading, known as macro trading.

Macro trading “requires a high degree of skill, focus and repetition,” Tudor Jones writes. “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.”

Tudor Jones didn't just single out women on his UVA panel; he also pointed to divorce as the type of emotional distraction that automatically subtracts 10% to 20% from any manager. He also noted that one of his rules as an investor is that if he finds out his manager is going through a divorce, he pulls money out of the fund immediately.

In the accompanying video, I talk to my Yahoo! Finance colleague Mike Santoli about Tudor Jones’ remarks.

“One of the biggest problems all traders have, behavioral finance tells us, is overconfidence - this idea you can make up for losses just by aggression,” Santoli says. “All these things, just if you look at the lab research, they are not as prevalent in women…It doesn’t stand up to much scrutiny to say if you have a child and you’re a women all of a sudden something chemical happens that means you’re no longer a great trader.”

Former Bank of America executive Sallie Krawcheck cites research that shows women are actually better investors, with their portfolios outperforming men’s by 1% annually.

Mike and I also talk about how these comments can become “gotcha” moments as opposed to an opportunity for a real discussion of the issues at hand.

“It is an objective fact that it’s mostly men at the top of this profession,” Santoli points out. “Is it because it’s self-selecting…or are there other structural reasons why [men] have advantages...or is it just tradition? It would be helpful if we could actually have an open-ended discussion instead of a zinger, a leaked comment, and a rote apology.”