from the site:
The Reformed Broker
.
.
Bernard Baruch’s 10 Rules of Investing
* _Joshua M Brown_
(http://www.thereformedbroker.com/author/joshua-m-brown/)
* February 17th, 2013
You want someone to emulate?
Bernard Baruch (August 19, 1870 – June 20, 1965) was the son of a South
Carolina physician whose family moved to New York City when he was eleven year
old. By his mid-twenties, he is able to buy an $18,000 seat on the
exchange with his winnings and commissions from being a broker. By age 30, he
is a
millionaire and is known all over The Street as "The Lone Wolf".
In his two-volume 1957 memoirs, My Own Story, Baruch left us with the
following timeless rules for playing the game:
“Being so skeptical about the usefulness of advice, I have been reluctant
to lay down any ‘rules’ or guidelines on how to invest or speculate wisely.
Still, there are a number of things I have learned from my own experience
which might be worth listing for those who are able to muster the necessary
self-discipline:”
1. Don’t speculate unless you can make it a full-time job.
2. Beware of barbers, beauticians, waiters — of anyone — bringing gifts of
“inside” information or “tips.”
3. Before you buy a security, find out everything you can about the
company, its management and competitors, its earnings and possibilities for
growth.
4. Don’t try to buy at the bottom and sell at the top. This can’t be done —
except by liars.
5. Learn how to take your losses quickly and cleanly. Don’t expect to be
right all the time. If you have made a mistake, cut your losses as quickly as
possible.
6. Don’t buy too many different securities. Better have only a few
investments which can be watched.
7. Make a periodic reappraisal of all your investments to see whether
changing developments have altered their prospects.
8. Study your tax position to know when you can sell to greatest
advantage.
9. Always keep a good part of your capital in a cash reserve. Never invest
all your funds.
10. Don’t try to be a jack of all investments. Stick to the field you know
best.
Baruch would later go on from Wall Street to Washington DC as an advisor to
both Woodrow Wilson and to FDR during World War II.
Later, he became known as the Park Bench Statesman, owing to his fondness
for discussing policy and politics with his acquaintances outdoors.
He lived til a few days shy of his 95th birthday in 1965. You could do
worse than to invest and live based on these simple truths.
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