Financial Trading Gurus at their best. Join the eToro Guru Program
Error
  • Error loading feed data

Worlds' Greatest Investors Part 4; Bernard Baruch (18 August 1870 to 20 June 1965)

We profile some of the greatest investors in the world. Their achievements have influenced and inspired many. In Part 4, we feature Bernard Baruch.

 

 

Bernard Baruch

 

1. Who Was He?

A Jewish-American financier, stock market speculator, statesman and presidential advisor. After his success in business, he devoted his time toward advising Democratic presidents Woodrow Wilson and Franklin D. Roosevelt on economic matters.

 

2. Background and Career

Bernard was born in South Carolina to Simon and Belle Baruch, and was the second of four sons. His father Dr. Simon Baruch (1840-1921) was a German immigrant of Jewish decent who came to America in 1855. He became a surgeon and joined the staff of Confederate General Robert E. Lee during the American Civil War. His mother's ancestors came to New York in the 1800s and were in the shipping business. In 1889 Bernard Baruch graduated from the City College of New York. He became a broker and then a partner for Housman and Company.

With his earnings he bought a seat on the New York Stock Exchange for $18,000 (approx. $670k in 2009 dollars). There he made a fortune before 30 years of age by speculating in the sugar market. In 1903 he had his own brokerage firm and gained the reputation of 'The Lone Wolf on Wall Street' because he preferred to trade for himself, instead of joining other brokerage firms. By 1910, he was one of Wall Street's financial leaders. As a result, a residential building at Stony Brook University is named after him.

 

3. High Profile Relationships

He advised President Woodrow Wilson during World War I on national defense strategies. During this time he became the chairman of the War Industries Board. Baruch assisted in turning the American industry into full scale war production. At the war he was seen with President Wilson at the Versailles Peace Conference, but never ran for elective office. He supported numerous Democratic congressmen with annual campaign donations and was a popular figure on Capitol Hill.

 

Bernard-Baruch2

 

He was a consultant on economic issues During World War II and proposed a number of measures related to tax and industry development. Baruch was firm in his beliefs and argued that in modern war there was little room for free enterprise. Washington must control all aspects of the economy and both business and unions must be subservient to the nation's security interest. Price controls were essential to prevent inflation and to maximise military power per dollar. He pushed for labour to be organised to facilitate optimum production.

Baruch believed labour should be controlled as necessary and a central government agency should take charge of allocation of labour. Baruch proposed to freeze economic freedom during war in order to preserve it for peace and stability. His approach enhanced the role of civilian businessmen and industrialists in determining what was needed and who would produce it. In 1946 he was appointed as representative to the United Nations Atomic Energy Commission (UNAEC) by President Harry S. Truman. Baruch wanted elimination of nuclear weapons after implementation of a system of international controls, inspections and punishment for violations.

On 14 June 1946, Baruch, who was widely seen by scientists and members of Truman administration as unqualified for the task, presented his Baruch Plan to the UNAEC. In this he proposed international control of atomic energy. This was rejected by the Soviet Union because Baruch's plan was unfair, given that the U.S. already had nuclear weapons. Instead the Soviet Union proposed that the U.S. eradicate their nuclear weapons before a system of controls and inspections was implemented. This resulted in a stalemate situation.

 

4. Baruch the Thinker

Baruch enjoyed spending lots of time thinking and contemplating. He was a high profile public figure and did most of his thinking in Lafayette Park, Washington DC and Central Park in New York City. He often discussed government affairs with other people while sitting on a park bench, and he soon became known for this. He used to say that his office was a park bench near the White House. In 1960, when he turned 90, a commemorative park bench in Lafayette Park across from the White House was dedicated to him. He continued to advise on international affairs until his death on 20 June 1965, in New York City, at age 94.

 

5. Baruch’s Quotes

Bernard Baruch was remembered for many thoughtful and humorous quotations. These are some of the popular ones:

 

  • "If all you have is a hammer, everything looks like a nail."

  • "We did not all come over on the same ship, but we are all in the same boat."

  • "Vote for the man who promises least; he'll be the least disappointing."

  • "Millions saw an apple fall, but Newton was the one who asked why."

  • "Most of the successful people I've known are the ones who do more listening than talking."

  • "Every man has a right to his opinion, but no man has a right to be wrong in his facts."

  • "If you get all the facts, your judgment can be right; if you don't get all the facts, it can't be right."

  • "Whatever failures I have known, whatever errors I have committed, whatever follies I have witnessed in private and public life have been the consequence of action without thought."

  • "During my eighty-seven years I have witnessed a whole succession of technological revolutions. But none of them has done away with the need for character in the individual or the ability to think."

  • "To me, old age is always fifteen years older than I am."

  • "One of the secrets of a long and fruitful life is to forgive everybody for everything everynight before you go to bed."

  • "I made my money by selling too soon."

  • "A speculator is a man who observes the future, and acts before it occurs."

  • "When good news about the market hits the front page of the New York Times, sell."

  • "Never follow the crowd."

  • "Never pay the slightest attention to what a company president ever says about his stock."

  • "The main purpose of the stock market is to make fools of as many men as possible."

  • "If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong."

  • "If the history of the past fifty years teaches us anything, it is that peace does not follow disarmament - disarmament follows peace."

  • 'Anyone taken as an individual is tolerably sensible. As a member of a crowd, he at once becomes a blockhead."

 

 

 

 

 

Additional information