Wisdom for Our Current Predicament: The Notable Quotable Bernard Baruch

A political leader must keep looking over his shoulder all the time to see if the boys are still there. If they aren't still there, he's no longer a political leader.
Bernard Baruch

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

Age is only a number, a cipher for the records. A man can't retire his experience. He must use it. Experience achieves more with less energy and time.
Bernard Baruch

Always do one thing less than you think you can do.
Bernard Baruch

Do not blame anybody for your mistakes and failures.
Bernard Baruch

Don't try to buy at the bottom and sell at the top. It can't be done except by liars.
Bernard Baruch

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.
Bernard Baruch

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

I made my money by selling too soon.
Bernard Baruch

I never lost money by turning a profit.
Bernard Baruch

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.
Bernard Baruch

If all you have is a hammer, everything looks like a nail.
Bernard Baruch

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

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

In the last analysis, our only freedom is the freedom to discipline ourselves.
Bernard Baruch

Bernard Baruch, a stock market speculator, statesman, and presidential advisor to Woodrow Wilson and Franklin D. Roosevelt, once said, "When good news about the market hits the front page of the New York Times, sell." Forty-three years after Mr. Baruch's death, never has his advice been so sound.

Every day lately brings wave after wave of crash and rally. Just when things look hot, the markets crash; just when things look bottomless, they rally again. Bernard Baruch's life is marked chock-full of timeless quotes that could perhaps help us gain a little perspective on this modern financial crisis... If only we'd listen.

Market speculators today continue to tell us what we can expect in the months ahead, though with increasing ambiguity to their predictions. They will never admit that they don't understand what is going on. But times like these require a degree of modesty and a dash of honesty, because without those ingredients it is far too easy to end up with a recipe tasting of quick-fixes and save-face endeavours. Now more than ever, speculators, economists and politicians should take a crash course on Baruchisms, heeding the advice of market gurus from crises in the past.

Nobody truly understands this crisis or what will happen next, otherwise banks wouldn't still be falling like dominos. Baruch's wisdom speaks to our current crisis from beyond the grave when he said: "If you get all the facts, your judgment can be right; if you don't get all the facts, it can't be right." The market has answered our faulty facts with this crisis and still speculators seem too ready to offer their opinions for fear of not having an answer. The result is muddied public understanding and perpetuation of the problem.

The reality is that we are in a new era, different from all past eras. Globalism and the greatest charge of the world's free-market economies has led us into unfamiliar territory. The vast array of economic bubbles from housing to private equity, commodity and hedge funds are all bursting simultaneously across the globe and the bleeding just won't stop. Credit has dried up.

Members of the invested public are all squirting in our pants about what the future may hold, and we're looking to "experts" for answers. The fact is, there are no real experts for this very new problem. So what we need now is character and honesty. As Baruch stated, "During my 87 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."

Do not be mistaken, this is a technological revolution. It is a financial revolt resulting from world markets too quickly embracing the opportunities of rapid exchange of information and trade in the new global economy. Money seemed easy to make, everything seemed to be going up in value, and when things are good, all investors feel like market wizards. But as Joe Graville, another market guru known for his ability to predict futures, expressed, "As soon as you think you've got the key to the stock market, they change the lock."

Well, the locks have definitely been changed and we're being beaten over the head with the old ones. But this is how the market works: it's unpredictable, or else we'd all be billionaires.

Michael Douglas' character Gordon Gekko in the movie Wall Street said, "Greed is good." Well, greed may be good when things are going well, but clearly it has a price in the end. So we are now paying the price for the risks one takes when investing so heavily in an industry based on greed and speculation. We loved the trinkets the booming market provided us, and now we're very sad they may be taken away. We've been crying for weeks about it now and have left individual "experts" like Ben Bernanke to plug holes in the bursting dam to make us feel safe.

Market speculation from "experts" is part of the problem. It's causing panic and increased market deterioration. The functionality of the money business is based on credibility, the belief that loans will be repaid and that merchant banking monies invested in businesses will produce a profit. This credibility is failing, but negativity, whingeing and a pass-the-buck attitude isn't helping. We all bought into the benefits of this market to make money; we are all to blame for its shortcomings. It's time for everybody to get over it and produce positive action instead of negative speculation.

"Whatever failures I have known," said Baruch, "have been the consequence of action without thought." So let's stop bellyaching and begin placing our energy into thoughts producing long-term results, instead of a temporary fix or a fall guy.

There's no question we will all have to tighten our belts in times to come, but that was long overdue. Let us not forget just one more Burachism: "The art of living lies not in eliminating but in growing with troubles."

Let us learn as we struggle through these uncertain times. Like a bad case of indigestion, this crisis too shall pass, and maybe society can come out a little stronger than we went in.

Comments

[investor88:]

We can do with a little of Baruch's wisdom in the current crisis. As Andy says this too shall pass but we have to go through it first preferably intact.

2008 Oct 31 09:13 PM

[notsosmart:]

its just a sad phase of the human condition.very little will be learned. the next generation of scammers & scoundrels are planning.the dumb sheeples will keep on getting fleeced.all this will repeat in a different form.real long term investing might be over.just a guess.

2008 Nov 01 02:20 PM

[You're Kidding:]

I have been thinking about the meltdown and the problems our economy faces, and I think I have come up with the perfect solution.

First, we freeze all prices and wages, except for people making less than 30K. For them we double their wages or more. For people making more than 500K, we cut their wages in half. No one is allowed to make more than 2 Million/yr, regardless of what they do. This solves the wage problem and ends inflation.

Secondly, we take over the Fed, and then lower interest rates to a negative 3.67%. In other words, people are paid 3.67%/yr to borrow money. They qualify for the loan by finding a lender who is willing to lend them the money because they have a good idea for its use. The lenders are required to monitor the loan, and if it loses money, they eat the loss. The banks are required to loan out so much money per month, based on how the economy is doing. The days of tight money will be over.

People in default on home loans get to stay in their homes with reduced interest and/or price - whatever it takes. This solves the housing problem.

Everything, and I mean everything, is totally transparent, and by law, is put on the Web. New jobs will sprout up as entrepreneurs find ways to make fees by connecting have-nots with haves. This ends the transparency problem.

Anyone found cheating the system in any way, automatically goes to prison for 5yr. Get caught twice, and you are sent to China. This will get the beached, Dry Bulk fleets back in action, and create new prison building jobs.

All those found to have contributed to the current meltdown due to greed, will have all monies gotten from that endeavor, taken away. Their names, addresses, and faces will be published in all print media now going under. This will save the print media.

I could go on and on here, but you get my point. All problems can be solved in a similar fashion. Once this new system is in place, everyone will eventually realize how absurd we all use to think about money, jobs, economics, etc. People will realize that no one is any better, or deserves anymore than anyone else, simply because they had the desire for something big, and the luck to be at right place, at right time, and got to take advantage of the cards they were dealt. Not everyone wants to, or can be, a lawyer, doctor, financial adviser, banker, politician, scientist/engineer, hacker, etc. Some people just want to have an adequate, peaceful life, without the hassle of working their assses off into oblivion, doing something they don't like. Why should anyone make a ton of money for what they do, while someone else, who may work much harder, makes just enough to get by? It isn't fair folks.

Case closed; problems solved.

2008 Nov 01 10:07 PM