During the three years from 1897 to 1900, baruch's personal assets rose rapidly to 100 USD. It is a miracle to accumulate such wealth in such a short time. From birth, this paper tells in detail the investment philosophy of bernard baruch, a genius of Wall Street.
Against the world with bare hands
The word "baruch" means "blessing" in Hebrew. 1870 was born in South Carolina. His father is an excellent doctor and his mother teaches piano and vocal music. He ranks second among the four brothers.
Baruch is a successful example of starting from scratch. Previously, he worked as a handyman in a small brokerage company in new york, earning $3 a week. Through continuous efforts, he was quickly promoted to partner of the company. He gave everything he had and bought a seat on the new york Stock Exchange. Before he was 30, he became a millionaire.
In the following years, baruch was on the verge of bankruptcy several times but made a comeback, but by 19 10, he had become one of the few tycoons on Wall Street with Morgan and others. From 189 1, baruch became a clerk of houseman, a big banker in new york, equivalent to an office handyman, who only did some work such as answering phones, sorting out transaction records and buying sandwiches. However, it is this identity that urges him to make money.
Since then, baruch has studied in his spare time. He took shorthand classes and evening classes in business law, memorized the business and business scope of various railway and industrial companies, and read through the history of business and finance and the handbook of making a living.
He also learned to draw a beautiful map of the whole country, and add the names of the main railway lines and their main commodities, so that he can quickly grasp the important financial value of each news without spending a lot of research time.
1895 At the beginning of this year, james keane, the king of venture capital, entrusted baruch United Gasoline Company and its new securities. In this way, the former errand boy was upgraded to a junior financial analyst.
At the same time, baruch secretly took another part-time job: a person in a marine insurance syndicate offered him $65,438 +0.500, and the "task" was to improve the company's credit.
Because baruch is always a small stock, it develops slowly in the stock market. The financial panic of 1893 has brought great challenges to every securities broker, and it has become very difficult to find enough solvent customers.
Baruch, which has just started, can't find customers. On the one hand, he is not famous; On the other hand, the company he works for is irrelevant; On the other hand, the securities he makes always lose money. In order to attract customers, he first wrote a stock market analysis report, and then knocked on the door of the company office from door to door.
On one occasion, he went to visit the famous dry goods dealer James Telcott, but was stopped by his secretary, so baruch waited patiently in the street outside until the target appeared again. He followed a few steps and briefly introduced himself, saying that the collapse of the railway company is a great opportunity, and the merger will certainly catch up with the stock appreciation channel at this time.
After carefully studying the situation in advance, his words moved Telcott, who ordered baruch to buy Oregon &; 6% of the bonds of Continental Transport Company was about 78 cents per share at that time. Indeed, as baruch analyzed, the railway stocks appreciated, and baruch sold them when they rose to $65,438 +0.25. Since then, Telcott has become a frequent visitor to baruch.
Fast millionaire?
The annual salary of $6,000 is already a satisfactory income for baruch, who just entered Wall Street. But with the passage of time, baruch's vision gradually broadened, and he began to feel that his annual salary of $654.38+$00,000 was just that. According to the available data, from 1897 to 1900, baruch's personal assets rose to 100. It is a miracle that he can accumulate these wealth in such a short time.
But what is more admired by the outside world is that baruch adopted a compromise investment method when acquiring these wealth. The miracle happened in 1897. That spring, baruch became interested in the shares of American sugar companies, and the quality of wealth depended on the level of tariffs. As long as foreign low-priced sugar is banned by tariffs, the share price of American sugar refining companies will be bullish; However, if foreign sugar cannot be stopped, the stock price will fall with the decline of the company's profits.
At that time, the Senate was discussing a proposal to reduce the import tax on foreign sugar, and the House of Representatives was also conducting similar legislative procedures. Every move of the Senate always affects the rise and fall of the stock market.
Baruch firmly believes that the Senate can't pass this bill on the grounds that beet growers in the west want to make more profits through tariff protection like Wall Street. He bet $300 on his wise inference. If the margin is 10%, he can operate the stock of $3,000.
In April and May of that year, the share price was about $65,438+065,438+05, and it rose to $65,438+039 by the end of July. With the stock price rising, baruch bought the stock with the cash earned from the previous down payment transaction. He kept buying, buying all his gambling books and winning money. When the stock price rose to a certain height, he began to remind himself that once there were signs of a sudden decline, he immediately ordered it to be thrown.
However, this ever-vigilant "stop-loss" order was never issued, but baruch made huge profits. When the Senate finally rejected the proposal, the stock price continued to climb.
On August 3 1 day, a news that the Ministry of Finance would ban the import of Dutch sugar drove the stock market to a one-day high, and US stocks soared by $8, reaching 156.25. Just then, baruch throws. He only invested $300, but in the end he earned a full $60,000.
What's more, while baruch was busy buying, Washingtonians were busy selling, and Wall Street was pessimistic. From 65438 to 0898 in the United States, the economic situation of the whole country was fairly good. In spring, the clouds of war are getting thicker and thicker, and the stock market is cooling down. But in the summer, after the news of winning the battle came from the front, the stock price rose all the way.
At this time, 27-year-old baruch was already a well-known stockbroker, commonly known as an investment agent. His boss, Arthur houseman, has always maintained a close personal relationship with Henry Arroway, editor-in-chief of The New York Times Financial Edition, which undoubtedly promoted baruch's career development.
Before Washington officially announced that the US Navy had won a decisive victory in the Spanish-American War in San Diego on July 3, Arroway leaked the news to houseman. After consulting with baruch, houseman believed that the financial market in the United States would rebound rapidly and even have a strong momentum after the war.
The next day, July 4th, the new york Stock Exchange was closed as usual, but the London Stock Exchange was open as usual. At this time, if you buy stocks at a low price in London and then sell them at a high price in new york, the profit difference will be considerable. Finally, they succeeded. Although they are not the only company that bought a lot of stocks from London on National Day, after all, this move shows the company's strong vision and courage.
From 1897, baruch started with $300 as venture capital, and by the time he was 32, he had accumulated $3.2 million in wealth. Even after the Great Depression from 1929 to 1933, he still accumulated tens of millions of dollars in wealth. It is estimated that the highest value of baruch 1929 property may be between $22 million and $25 million.
The property list of 193 1 shows that baruch's total assets at that time were160,000 US dollars, including 8.7 million US dollars in cash, 3.69 million US dollars in stocks, 3.06 million US dollars in bonds and 550,000 yuan in loans. The value of baruch's property is more than $6,543,804,000, and his lifetime contribution to various undertakings is nearly $20 million.
Six major investment literacy?
Baruch pursues a truth, that is, no one can fully grasp the essentials of investment in all industries, so the best way to invest is to find the industry that you know best and are familiar with, and then put all your experience into it. As for baruch, he admitted that he had never mastered the investment know-how of agricultural products.
He has no confidence in this field. As long as he invests in an agricultural product, it will become less and less valuable. As a millionaire, baruch's greatest hobby is traveling around the world. His popularity and position make him the focus of attention wherever he goes. Baruch travels back and forth in the United States, east, west, north and south every year, and has a detailed understanding of the geographical environment of each place, which is very beneficial to business investment.
In summer, he usually goes to Europe for a holiday; When winter comes, he will spend most of his time in a water manor in South Carolina. Baruch has always regarded this place as his second hometown, because here, baruch can really feel that he has some close ties with his parents from the south.
Baruch's investment method is flexible and changeable, and he advocates firm stop loss. He believes that if investors have a sense of stop loss, even if they only get it right three or four times out of ten, they will become rich.
He told investors to be prepared and ready to turn around and leave at any time. Baruch also pointed out that it is impossible for anyone to fully grasp the essentials of investment in all industries. Therefore, the best way to invest is to find the industry that you know best and are familiar with, and then devote all your energy to be cautious about "inside information".
Baruch also reminded investors to pay attention to three aspects of investment targets:
1, it must have real assets; ?
2. It is best to have franchise advantages, which can reduce competition and ensure the outlet of its products or services; ?
3. The most important thing is the management ability of the investment object. He warned: I would rather invest in a well-managed company with little capital than touch the stock of a well-funded and poorly managed company.
In baruch's view, investment and speculation must have six basic qualities:
1, self-reliance, must think independently;
2, judgment, don't let what you want to happen affect your judgment;
3. Courage, don't overestimate the courage you may have when everything goes against you;
4, agile, good at discovering all factors that may change the situation and factors that may affect public opinion;
5. Be careful. When the stock market is good for you, you should be more modest. It is not prudent to start buying when you think the price has reached the lowest point; You'd better wait and see. It's not too late to buy it later. Insist on waiting until the price rises to the highest point before selling;
6. Be flexible, consider and reconsider all objective facts and your own subjective views.
Ten investment experiences
In his autobiography "My Story" published by 1957, he left the eternal rules of the financial market for the world: "I doubt very much that my personal advice will help others, so I have been reluctant to write down any" rules "or instructions on how to invest or speculate wisely.
But I do have some personal experiences that may be valuable to some people. ":
1, don't speculate unless you can work full-time.
Beware of hairdressers, beauticians, waiters or anyone who tells you through gossip.
3. Before buying stocks, collect all the information of the company, including management, competitors, profits ... any information related to the company's development.
4, don't try to throw high and suck low, there is no way to do it-except for liars.
5. Learn how to stop losses quickly and flexibly. Don't expect yourself to always be right. If you do something wrong, stop as soon as possible.
6, don't buy too many stocks, it is best to buy only a little that you can manage.
7. Regularly re-examine all investment businesses to see whether their development and changes have changed the investment prospects of these assets.
8. To study your tax payment, you need to know when it is the most cost-effective.