What Is a Weak Sister?
Let me tell you directly: 'weak sister' is a slang term for an element that undermines an entire system. You can apply it to a single individual or a specialized group that's seen as the weak and undependable link in an integrated process.
Key Takeaways
- 'Weak sister' is slang for an undependable or weak link that threatens to undermine an entire system.
- The term can be used in reference to a particular individual, group of people, a company, or an entire economy.
- Weak sisters aren’t always undependable. Some can quickly bounce back with an adequate dose of outside help and favorable external factors.
Understanding Weak Sisters
Weak sisters are what hold someone or something back. Think of it as a malfunctioning part in a team-oriented task, like the slowest member on an assembly line or a sluggish marketing team. It could also describe a security, economy, or business unit that performs worse than others.
This term is similar to 'the weakest link in the chain.' Both point to someone or something that risks single-handedly causing the failure of the system or group it belongs to. The 'weakest link' comes from the proverb 'a chain is only as strong as its weakest link.' In essence, one substandard link may cause the chain to break, even if the other links are strong.
You can trace this saying back to Thomas Reid. In his Essays on the Intellectual Powers of Man, published in the mid-1780s, he wrote: 'In every chain of reasoning, the evidence of the last conclusion can be no greater than that of the weakest link of the chain, whatever may be the strength of the rest.'
Example of a Weak Sister
Weak sisters show up in every industry. For instance, in an investment portfolio, there's usually at least one laggard that weighs on total returns.
Suppose there's an investor named Mark who has invested in five different stocks: Company A, Company B, Company C, Company D, and Company E. Over the past three years, four of the five stocks have done well, beating the stock market with returns between 17% and 40%.
But that performance gets undermined by the weak sister. Company C returned just 2% because a large part of its business—its energy arm—faced tepid demand due to falling oil prices. Those tough conditions in that division pulled down the average return of the whole portfolio, bringing it in line with the market average or even below if you account for fees.
Weak sisters can also refer to entire countries. After the great recession, Europe struggled with its debts in what became the Eurozone debt crisis. Five countries—Greece, Ireland, Italy, Portugal, and Spain—took most of the blame. They were accused of lacking fiscal prudence, not generating enough growth, and risking default on their bonds.
Special Considerations
Just because something or someone is called a weak sister doesn't mean it's beyond saving. Weak sisters might not always be undependable. Often, what struggled one year can bounce back the next.
For example, once oil prices rebound, Company C could go from the weak sister to the top performer in Mark’s portfolio. Investors pushed its valuation down due to sector challenges, so it would look cheap if sentiment improves and trading picks up.
Market cycles and business conditions change over time, causing various asset classes to fall in and out of favor. For many investors, there's money to be made by spotting weak sisters and figuring out, ahead of the market, when they've hit bottom.
Weak sisters can also strengthen with internal changes. Certain capital expenditures or cost-cutting strategies can turn a bloated, underperforming laggard into a leaner, more effective operation.
Other articles for you
This text explains what small-business grants are, how they work, their types, and examples from various sources.
AAA is the highest credit rating for bonds, indicating top creditworthiness and low default risk from issuers like governments and companies.
Nelson Peltz is a billionaire activist investor who founded Trian Fund Management and has influenced major corporations through strategic investments and board positions.
Personal finance involves managing income, spending, saving, investing, and protection to achieve financial goals and security.
A white candlestick represents a bullish period in trading where the closing price is higher than the opening price.
The United Nations is an international organization focused on promoting peace, security, human rights, and cooperation among nearly 200 member states.
A hedge clause is a disclaimer in financial reports that protects authors from liability for errors or omissions.
A habendum clause defines the rights, interests, and ownership aspects in property-related contracts, commonly used in real estate and oil/gas industries.
Commercial real estate involves properties used for business purposes, offering investment opportunities through direct ownership or indirect methods like REITs, with benefits like stable income but challenges like high capital needs and regulations.
Average Revenue Per Unit (ARPU) is a key metric that measures the revenue generated per user or subscriber in industries like telecom and media.