Monday, 16 April 2012

Stock traders who wear high heels


John Mangun
http://www.mangunonmarkets.com/stock-traders-who-wear-high-heels/

VICTORIA Woodhull was the first woman candidate for US president. She was the first woman to start a weekly newspaper. Woodhull and her sister became the first women stockbrokers and in 1870 opened a brokerage firm on Wall Street.

Woodhull made a fortune in the stock market. The financial press called these women “Queens of Finance” and “Bewitching Brokers.”

Throughout my time in the markets, there were always a substantial number of women working as investment consultants and stockbrokers. The lack of female participants was always on the client side.

Women tend to view stock-market trading as something of a gambling endeavor reserved for men. I always felt that women in general were not willing to put in the time and effort to learn about trading. However, at least one-third of the MangunOnMarkets subscribers are women who actively manage and trade their own or family funds.

Ms. Charmel de los Santos, a Filipina living in Australia, perhaps is typical of the new breed of females, trading stocks for their own wealth creation. She started her career as a business analyst and worked in IT for 15 years. But do not think that Charmel wears sensible shoes and a 2001 hairstyle. She was a Binibining Pilipinas contestant in 1998.

This is not a hobby for her. She has been trading for 11 years. As a mother of three small children, she actively trades the financial markets to make more money.

Last year she limited her trading activity to write a book to explain to women why, how and what they needed to know on trade and the financial markets. The result is High Heeled Traders.

Much of the reason for women not being in the markets is that the industry is dominated by men. Ms. de los Santos writes, “As we all know, women are different from men, and I thought that the barrier for women to get into trading is how the ideas are communicated to them.”

The subtitle of her book is, “Understand Trading with Shopping, Fashion, and Shoes!” Her premise is that “Considering women shop a lot, I thought we would be natural traders! We just don’t realize it.”

Because this book is aimed at women who are not market participants, Ms. de los Santos spends considerable time looking at the psychology an investor needs to have, comparing it to a woman shopping for shoes.

There is a great deal of motivational talk that might not hit the average man. She speaks of the necessity for positive lifestyle choices, proper eating and exercise, as well as making sure your self-esteem is confident before venturing into the stock market.

I can appreciate the lifestyle part. My early stock-market mentor Jim Walraven once told me, “John, you probably shouldn’t have a bad hangover when you trade, but if you do, I always have a breakfast beer to wash it away.” Great advice.

There are sections on personal financial planning that can help people understand that, as a business venture, trading needs to fit in with your other financial plans. It makes the reader understand that this is a business, not a game.

Chapter Five is called “Dressed to Trade.” When I read that, I knew I was in trouble. Charmel was not going to approve of my trading attire: jogging pants and T-shirt, scattered with cigar ashes by the end of the market.

However, every woman can appreciate her thoughts. She takes the reader through getting dressed up, from makeup to perfume, as a method to explain how to understand and put together all the things you need to know about trading just as you would build a suitable outfit and glamorous look.

Two critical parts of the book are for every trader. She speaks at length about the Risk/Reward equation. “You don’t go out and chase profits. You patiently wait for the opportunity, seize it when it comes, and drop the trade when it is unfavorable to limit your loss.” She likes a 1:3 risk-to-reward ratio and that is reasonable. Do not buy bargain shoes that do not fit. Do not buy very expensive shoes to wear once. It makes good sense.

The second important aspect of trading is the Trading Plan. Charmel has 15 steps and it is very complete. Mine has only five steps because that’s the way I buy shoes: 1. Casual/dress. 2. Laces/slip-on. 3. Brown/black. 4. Expensive/cheap. 5. Comfortable/fancy. Yeah, I am a man.

High Heeled Traders is a valuable resource particularly for women who are or want to be stock-market investors. Buy it at Fully Booked stores or at http://highheeledtraders.com.

On a personal note, my next seminar will be April 28th in Makati. E-mail me at john@mangunonmarkets.com for details.

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