Bernard Baruch: My Own Story | By Bernard Baruch

BOOK REVIEW

By Cam R

Title: Bernard Baruch: My Own Story

Author: Bernard Baruch

If you have been in trading for a while, you would probably have heard the story of financier Bernard Baruch and the shoeshine boy. Basically, Baruch was supposedly having his shoes shined one morning by a shoeshine boy. In the midst of his job, the boy was talking animatedly about the stock market and what to buy, giving Baruch a tip so to speak. Hearing this, Baruch realized that the public had stock fever, so he immediately went back to his office and sold all of his stock holdings. As he puts it: “When beggars and shoeshine boys, barbers and beauticians can tell you how to get rich it is time to remind yourself that there is no more dangerous illusion than the belief that one can get something for nothing.” A very good indicator of a market in a mania and ripe for a eventual crash.

Although a self-made trader and financier, little has been written about him or his methods. So I approached his biography (authored by himself) hoping that it would shed more light on this astute man. So let’s move on to the review below.

Packaging - 3/5

A simple hardcover without any fancy frills. The cover design is very plain, with basically nothing on it. I would think a elegant line illustration of a man having his shoes shined would be a nice allusion to the famous story. Perhaps since this was authored by him, he didn’t want to be singularly associated with that one story? Who knows. Anyway, the paper is of sufficiently good quality so nothing to grouch about here.

Writing Style - 3/5

The book comes across as a voice for his keen observations. It’s like he’s telling you about the things he has experienced and his thoughts about them. Conversations he had with others are also included in the book occasionally, which provides a nice break from the narration. The style is not particularly memorable or engaging unfortunately, but it does its job at telling his story.

Trading Methods (Specifics) - 3/5

There is not very much in the way of specific trading methods, as Baruch probably leans more towards the fundamentals. He does talk a little about how he got started in trading and the mistakes he made.

How he describes his mistakes:

“In those early days it wasn’t too difficult to figure out what I was doing that was wrong. There are two principal mistakes that nearly all amateurs in the stock market make. The first is to have an inexact knowledge of the securities in which one is dealing, to know too little about a company’s management, its earnings and prospects for future growth. The second mistake is to trade beyond one’s financial resources, to try to run up a fortune on a shoestring.

That was my main error at the outset. I had virtually no capital to start with. When I bought stocks I put all so small a margin that a change of a few points would wipe out my equity. What I was really doing was little more than betting whether a stock would go up or down. I might be right sometimes, but any sizeable fluctuations would wipe me out.”

An interesting part was how he lost the money his father gave him, and how his father trusted him enough to stake him a second time. This made Baruch determined to succeed in his stock trading endeavour. I guess this shows the power of having someone believing in you that you can succeed.

Trading Management (Soft Skills) - 3/5

Most of his trading management are by way of him talking back about some of his stocks plays. But in addition to that, he does list down some guidelines from his own experience which he hopes may be of help to others. They are as below.

“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, 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 possibility 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.

He then goes on to elaborate on some of the above guidelines with his own experience keeping to them. They are pretty insightful and augment his points well.

Trading Psychology (Mindset) - 2/5

On the thin side here. He doesn’t talk much about his mindset. The only strong sense I get is his sense of cautiousness, which is apparent throughout the book. One gets the sense that he was also slowly but surely honing his stock market prowess.

Longevity - 2/5

This is first and foremost a biography, as opposed to a trading manual. Although he does talk about trading since he did make his fortune from his speculation skills, this is most definitely about Baruch the man, not Baruch the trader. For readers interested in Baruch, I feel a one-time reading would probably suffice. A very insightful read, but not something I would go back to time and again.

Value - 3/5

Priced reasonably for a biography and it does indeed provide a full picture of Bernard Baruch. I did come away with a fuller picture of Baruch and his life, but trading-wise, it takes second place to the story of his life.

Things to Watch Out For -

He did go into politics at the end of his career, and the concluding part of the book is indeed about his experiences during his time there. I personally didn’t find it providing much knowledge trading-wise, though that is to be expected I guess.

Overall - 3/5

A thorough and enjoyable biography. I did have a greater appreciation for Bernard Baruch after reading it, and his stories were also interesting. Anyone interested in the man would do well by reading this.

Score Recap:

Packaging - 3/5

Writing Style - 3/5

Trading Methods (Specifics) - 3/5

Trading Management (Soft Skills) - 3/5

Trading Psychology (Mindset) - 2/5

Longevity -2/5

Value - 3/5

Overall - 3/5

Where to Buy:

If you found the above review helpful and want to buy the book, please consider buying it through my Amazon affiliate link below. The prices are competitive, and any purchase is a huge vote of support for this blog. Thank you!

Thanks for reading!

And do visit soon again as I will have new reviews up!