7 Timeless Investing Ideas from Bernard Baruch

Bernard Baruch Investing Ideas

Born in 1870, in Camden, South Carolina, Bernard Baruch started his finance career by working as a runner for stock brokers.

In 1899, he bought a seat on the New York Stock Exchange for $19,000 (equivalent to roughly $670,000 today) with the money he made from trading stocks.1Source: Forbes

By the time he was 33, in 1903, Baruch had amassed an estimated fortune of $3 million.2Source: Nasdaq That’s about $105 million in today’s dollars.3Source: In2013Dollars.com

Baruch isn’t as well-known as his contemporary, Jesse Livermore (who I feature in my latest book , The Stoic Path to Wealth). It’s likely because Baruch wasn’t as fond of the spotlight as Livermore was.

As a business owner, Baruch founded a company that dominated the rubber market in the United States. His partners in the enterprise included big names like John D. Rockefeller Jr., the son of the Standard Oil tycoon, and the philanthropist George Foster Peabody, among others.4Source: University of California Press

“The Lone Wolf of Wall Street”

By 1903, after becoming a multi-millionaire, Baruch earned the name, “The Lone Wolf of Wall Street” because he didn’t want to join any financial house. Instead, he built his own brokerage firm and became one of Wall Street’s best-known financiers.

This shows Baruch’s commitment to the idea of always thinking for yourself. The stock market is filled with people who think they have a “great trading tip.” And Baruch advised avoiding those kinds of people.

Later, as the chairman of the War Industries Board, Baruch advised then-President Woodrow Wilson on the nation’s economic mobilization strategy for World War I. Baruch would make a postwar fortune in the bull market. He made a lot of money before the market crash of 1929.

In fact, Baruch foresaw the crash and he refused to join the other financiers who were getting into the market at the time. So he avoided being among the financiers that the market crash destroyed.5Source: Archive.Org

Baruch’s pragmatic approach to investing underscores the timeless wisdom of contrarian investing and the power of patience in achieving financial success.

7 investing ideas from Bernard Baruch

Here are 7 lessons I’ve learned from studying the life and work of Baruch.

1. Pick an investing strategy that fits your personality

”Be who you are and say what you feel, because those who mind don’t matter, and those who matter don’t mind.”

As an investor, it’s essential to choose a strategy that aligns with your personality and financial goals. Too often, I hear people criticizing each other’s financial decisions.

The other day I saw someone bashing a person on X because he paid off his 3% mortgage. He argued it was a stupid decision and it was smarter to buy 4% treasuries instead.

These types of folks don’t get that personal finance has an emphasis on personal.

Don’t let market noise or others’ opinions sway your investment decisions. Trust your research, instincts, and your own risk tolerance.

No one’s going to look back on their deathbed and say, “I wish I earned 1% more on my cash.”

2. Diligence is the key to success

”Whatever task you undertake, do it with all your heart and soul. Always be courteous, never be discouraged. Beware of him who promises something for nothing.”

Every investment decision should be made with thorough research and analysis. Be wary of ‘get-rich-quick’ schemes and remember that successful investing requires patience and perseverance.

Baruch was a very skeptical and sometimes cynical man. I can personally relate to that a lot.

I think we need to do our own research every time we invest. It will save a lot of headaches in the future.

3. Trust sustainable investing ideas

”Peace is never long preserved by weight of metal or by an armament race. Peace can be made tranquil and secure only by understanding and agreement fortified by mutual trust.”

Trust is the backbone of any investment relationship. Whether it’s between you and your broker, or you and the company you’re investing in, mutual trust and understanding are vital for success.

This is also true for the investment strategy you pick. Once you’ve done your research and made your decision, you must trust your strategy wholeheartedly.

4. Stay grounded

”The strange fascination that the stock market exerts upon people has never ceased being a source of wonder to me.”

The stock market can be captivating, but don’t let it distract you from your investment strategy.

Stay focused on your long-term goals and don’t let short-term market movements influence your decisions.

Also, stay away from predicting the market. I know the market can seem like a highly mysterious thing. Understanding market patterns can seem like too much work. But there’s a simpler, and better way of studying the market.

When you do that, you’ll have a much better chance at building wealth.

5. Master your area of investing

”Never invest all of your funds. Don’t try to be a jack of all investments. Stick to the field you know best.”

It’s important to diversify, but equally important to invest in areas you understand. Try to remember that whenever you look for investing ideas that work.

Don’t scatter your investments too broadly. Instead, become an expert in a specific sector or asset class.

6. Embrace the ups and downs

”Only liars manage to always be out during bad times and in during good times.”

There’s someone who regularly comes on CNBC who makes it seem like he’s always selling the stocks that are going down and buying the ones that are going up.

I find that hard to believe. If anyone could time the market, they would be wealthier than Elon Musk.

Market timing is a myth. Hold your stocks through the ups and downs.

7. Learn to communicate your investing ideas

”The ability to express an idea is well nigh as important as the idea itself.”

Whether you’re discussing your portfolio with your financial advisor or explaining investing ideas to a partner, clear communication is crucial.

Because that means you truly understand what you’re doing. If you find it hard to explain your investing strategy, take it as a sign to do more research.

Be sure you can articulate your investment strategy and the reasons behind your decisions.

These timeless investing ideas from Bernard Baruch serve as valuable lessons for all investors.

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