The ‘gray rhino’ and the misconceptions about women and risk. And listen to the podcast interview with Michele Wucker and Barbara Stewart
Welcome to our #163 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we spotlight our interview with Michele Wucker and Barbara Stewart on The Purse Podcast.
We talk about risk, the ‘gray rhino’, the misconceptions about women and risk and how women manage risk as investors, at work and in life.
Listen to the full interview here.
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And you can review the news in brief so you stay on top of global financial, economic and investing trends.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
The ‘gray rhino’ and the misconceptions about women and risk
Michele Wucker and Barbara Stewart joins us on The Purse Podcast to talk about how women manage risk as investors, at work and in life.
Michele Wucker and Barbara Stewart joined us on The Purse Podcast.
Michele Wucker is a strategist, speaker and best-selling author. She coined the term 'Gray Rhino' as a call to take a fresh look at how we respond to obvious probable and impactful risks.
She founded the Chicago-based advisory firm Gray Rhino & Company and is a former media and think tank executive.
Barbara Stewart is a Chartered Financial Analyst with 30 years of investment industry experience, five years as a foreign currency trader, more than two decades as a portfolio manager for high net worth entrepreneurs, and for the past six years doing interview driven research from multiple global financial institutions.
Thirteen years ago, Barbara saw a need to challenge outdated financial industry stereotypes and share positive messages about women and money. Today, Barbara is recognised worldwide as one of the leading researchers in women and finance.
In this podcast interview we talk about risk, what is it, how it relates to women and money, negative stereotypes and money myths, how women invest and how women can overcome systemic risk.
Here is a short extract from the interview:
Jana: I’d like to talk about this concept of the ‘gray rhino’. I wonder whether you can explain what it is and how might this apply to women and the topic of money and wealth building?
Michele Wucker:
My interest in risk came from my work in sovereign debt. And comparing Argentina in 2000 ahead of its collapse and Greece in 2011 and 2012, where both saw a big scary situation coming at them…
The debt was going up, the economy was going down and the reserves were going down. The math was really clear in both cases. And Greece sat down with its creditors and came up with an orderly restructuring agreement and Argentina did not.
And I really wanted to know ‘what's the difference’?
At the time I was dealing with a personal gray rhino of my own and that I'd been running an organisation and not spending enough time writing and thinking and doing my own work, which is, really the thing that excites me.
And this was the idea that excited me:
…why do some countries or companies or decision makers see the big thing coming at them? That's the rhino. (Two tonnes). And it's scary. (That's the horn). Why do some people do something and other people don't?
And it's gray because if you go to the zoo and see a rhino and you ask the five year old next to you, what colour is that rhino?
They will say: ‘well, it's gray. Duh’.
But the grown-ups are saying: ‘oh, it's a black rhino or it's a white rhino’. And of course, neither one of those colours is accurate.
And that part of the metaphor is how much more likely than we want to admit, are we going to miss the ball on the big obvious thing. And so it's really a challenge.
Are you the kind of person who sees the gray rhino coming at you and does something? Or are you the one who lets yourself get trampled?
Or the third answer, which is the one I try to push people for is: are you the one who harnesses the strength of the gray rhino and does something about it?
And so as far as women, you'll see that there's research showing that in many ways men and women are so much more alike in risk preferences than people will admit.
But when it comes to social risk, like speaking up to saying: hey, let's talk to somebody who really knows about this. Or hey, let's ask someone for directions.
Pre-GPS days, women have been more likely to take that social risk of saying the thing that nobody else wants to say, which actually is why ‘the gray rhino’ is different from the elephant in the room, which is a thing that by definition, nobody talks about.
And as I went around the world talking about gray rhinos again, to CEOs and policy makers about how you deal with a crisis itself, I got a lot of questions about personal risks and personal attitudes.
And I flipped back to my earlier studies around anthropology, behavioural, economic, psychology, and really started asking what does each person bring to a risk situation? And it is a choice.
There you will find that there are some different experiences. There are some different approaches. There are objectively different consequences that face men and women.
There's research showing that a woman in a 'gender atypical role' who makes a mistake will be punished way more than a man in a gender typical role that makes that mistake.
And when I started looking for men in gender atypical roles relating to say fashion, hair products, things like that, you found that those men actually were also rewarded for gender atypical things.
They were getting the financing, they were getting the support that actually women were not in the gender typical area.
And then I've also found that risk stereotyping is a part of it. This is what Barbara was talking about in terms of the misconceptions about women and risk.
And we're still dealing with on the venture capital side that women get a very, very tiny percentage of the money out there. And some of it is because of this stereotype that women ‘don't take enough risks’, which wasn't true at all…
News in Brief
Financial news
The UK’s FTSE 100 index is down 149 points, or 1.9%, in late trading Friday at 7,730. HSBC are down 5%, with Standard Chartered off 4.6% and Barclays losing 4.4%.
Silicon Valley Bank (SVB) has been shut by FDIC. All insured depositors will have full access to their insured deposits (up to $250K only), no later than Monday morning. Shares of SVB crashed 87% over 2 days as fears of a bank run escalated. According to the FT, it is the second-largest bank failure in US history after the 2008 collapse of Washington Mutual.
Does SVB highlight potential systemic risk for the US & global banking sector? Hedge Fund Algebris says no: "SVB was major outlier in terms of degree to which they were facing deposit outflows, the unusual deposit base, and the extent of the bond losses."
Investors flocked to gold amid bank woes. Bullion price rose to $1868/oz., the highest in nearly a month. And even digital gold, Bitcoin is back above $20k+
The KBW Bank Index sank 16% for the week, its worst plunge since March 2020 when the pandemic roiled financial markets, as the failure of Silicon Valley Bank sent shockwaves through the sector. (via BBG)
Markets breathe a sigh of relief following mixed US jobs data: US economy creates 311,000 new jobs in February, above forecast of 225,000 but household numbers below forecasts with unemployment rate rises to 3.6% above 3.4% expected and wages cool. Monthly wages rose 0.2% vs 0.3% expected.
Quantitative tightening (QT) is much slower than quantitative easing (QE or money printing). Central banks reduce total assets much more slowly than they have accumulated them.
UK economy rebounds as Jeremy Hunt finalises budget. January GDP growth of 0.3% bigger than expected, driven by education, health and recreation sectors.
Crypto: bitcoin, ethereum, DeFi & NFTs
More than $70 billion wiped off crypto market in 24 hours as Bitcoin dropped below $20,000 on Friday. (Currently trading at $20,500+).
Crypto group Circle admits $3.3bn exposure to failed Silicon Valley Bank. Stablecoin’s value drops as crypto market reels from US bank failures.
Circle to ‘cover any shortfall’ in USDC Reserves, sparking stablecoin rally. The company plans to use corporate resources to fill the gap, including external capital.
MakerDAO launches emergency proposal to limit USDC exposure. Maker is the DeFi lending protocol that issues the decentralized stablecoin DAI. Being 54.5% backed by USDC, DAI has also been caught up in USDC’s depegging event and is currently trading at $0.93.
Crypto-focused bank Silvergate is shutting operations and liquidating after market meltdown.
Ark Invest picks up more Coinbase stock. The purchase, valued at about $6.4m takes Ark’s investment in Coinbase to almost $30 million this past week.
The Purse Podcast
We cover the following in our conversation:
What is risk?
How it relates to women specifically around money and investing.
Negative stereotypes and money myths.
The impact on women- how they invest and how they are perceived by the financial services industry.
How women can overcome systemic risk in order to ensure their financial resilience and their financial security.
Investing in yourself.
Please enjoy! Listen on Apple Podcasts and Spotify+
Coffee Break? Read This
We’d love to hear from you. Get in touch with Jana via the The Purse website or tweet @jointhepurse and janicka.
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