Bernard Baruch, known as the lone wolf of Wall Street, died fifty-years ago this month, as a multi-millionaire, philanthropist and advisor to several U.S. presidents, at the age of 94. On his 32nd birthday, he told his father that he was worth $100,000 for each year of his life, an amount valued at over US$29 million, today at a 2% inflation rate.
His insights are as valuable today as they were when he wrote his memoirs, My Own Story, in 1957. Here they are:
1) Some people boast about selling at the top and buying at the bottom. I don’t believe this can be done. I have bought when things seemed low enough and sold when they seemed high enough. In that way, I have managed to avoid being swept along to those wild extremes which prove so disastrous.
2) There are no sure things in the market. There is no investment which doesn’t involve risk. But we all have to take chances in life.
3) The main obstacle to investing is disentangling ourselves from our emotions. They are constantly setting traps for our reasoning powers.
4) What registers in stock market fluctuations are not the events, but human reactions to the events. My career on Wall Street proved one long process of education in human nature.
5) During a depression people believe a better time will never come. At such times, a basic confidence pays off if one purchases securities and holds them until prosperity returns. Always in the past, no matter how black the outlook, things got better.
6) The longer I operated on Wall Street, the more distrustful I became of tips.
7) Have you ever noticed how animals behave when no danger threatens? They lick their coats, preen themselves, strut and sing. So with human beings. And like animals, when fear strikes their hearts, they forget their elegances and sometimes even the common courtesies.
8) When misfortune overtakes us, all of us are prone to blame someone else. This instinct for the preservation of self-esteem is on of the deep-seated traits of human nature.
9) If anything, too much information is available today (1957). The problem has become to separate the irrelevant detail from essential facts and to determine what those facts mean. More than ever what is needed is sound judgment.
10) It is far more difficult to know when to sell a stock than when to buy.