Bernard Mannis Baruch (Bernard Mannes Baruch) – American financier, speculator, as well as a politician and statesman.
Bernard Baruch was born 19 august 1870 in Campden, South Carolina and was the second of four sons of Simon and Bell Baruch. His father, Simon Baruch (1840—1921), German immigrant of Jewish origin immigrated to the USA from Germany 1855. Physician by profession, during the civil war he served in the army of the southerners and was one of the founders of physiotherapy. IN 1881 his family moved to New York, where Bernard went to City College (City College of New York). After graduating from college, Bernard Baruch began working for Houseman and Company. (A. A. Housman and Company). Moving up the career ladder, he became a broker, and then partner A. A. Housman and Co., and seven years later he already owned an eighth of this brokerage house. The source of his income was part of the commission, received by him from each transaction of the client.
By pooling your funds with those, which managed to borrow from relatives, Bernard Baruch bought in 1898 place on New York Stock Exchange. Alas, first experience failed. Bernard again - and then again - had to turn to relatives for help. One day his father told him, what $500 - it's all, what the family had left for a rainy day. But it was with these five hundred that Bernard Baruch began his ascent to the Wall Street Olympus.. From the very beginning, his behavior on the stock exchange seemed strange to many. His entry into the market and the first successes were perceived extremely disapprovingly.. For example, J. P. Morgan called him nothing more than a "card cheat". At first glance, these accusations in the era of the free market seem strange - after all, Morgan himself did not make his fortune in white gloves at all.. But the methods of Bernard Baruch surprised even the great schemers. At first, he did not carry out takeovers of weak companies, popular at that time, with the aim of their subsequent resale.. He did not carry out fraud to artificially raise the price of individual shares.. His methods were far from scrupulous accounting of fundamental factors. Though stock market at the time and was on the rise, Bernard Baruch actively used the tricks of the game for a fall. In his own opinion, it is impossible to buy at a minimum and sell at a maximum. And so he often went against the market, selling then, when many people bought, and vice versa. Without going into the intricacies of the company's activities and not paying attention to the rumors spread about it, Baruch worked on general market movements. And in this regard, his operations can be compared with the style of Livermore.
As Bernard Baruch's wealth grew, so did his opportunities.. He could already afford private equity. For example, the company was founded on his capital Texasgulf Inc., engaged in services in the then growing oil industry. However, he was not interested in participating in the management of this company.. And he did not go further than financing its creation.. And although Texasgulf Inc.. over time turned into a fairly profitable company, Baruch had only a small part of this wealth left, since after numerous issues of shares, its share has been greatly reduced. Bernard Baruch was reckoned with, and rarely major transactions took place without consulting him. He was called the owner of a large fortune, his speculations on the stock exchange were feared no less, than action J. P. Morgan or Joseph Kennedy. Yes, Baruch, not seeking to trade solely on insider information, received many opportunities for profitable investment of capital.
TO 1903 he had his own brokerage firm Baruch Brothers, and in their 33 year he became a millionaire. Despite the then flourishing practice of creating various trusts for the purpose of market manipulation, Bernard Baruch did all his operations alone. For which he received the nickname "the lone wolf of Wall Street". Even if you become a millionaire, Baruch did not forget, how he lost all his money in the stock market several times. Therefore, in 1907 year he spent $55 thousand. to purchase 15 thousand. acres of land in their homeland of South Carolina. According to his calculations, in the event of another fall in prices on the stock exchange, this land would not leave him without a livelihood. In the same year, he bought a fairly stable company, engaged in trade mainly between England and the United States,— M. Hentz & Co.
Active penetration of Bernard Baruch into political life began in 1912 year. With his money, he supported Woodrow Wilson in his presidential campaign.. Baruch contributed to the Democratic Fund $50 thousand. In gratitude for this, Wilson 1916 appointed him to the Department of National Defense. Immediately after, how Bernard Baruch got his first public office, Rumors spread on the market, that he is using his position for insider trading. IN 1917 even an investigation was carried out against him, accused of disclosing classified documents. Checking out his deals, the investigation stumbled upon the operations he had performed a few months earlier. Estimated, on the purchase and resale in a month of shares of factories, falling within the scope of his interests in public office, Bernard Baruch earned around $1 million. However, it was not possible to bring him down.. Baruch built his defense on the basis, that he created his entire fortune on the resale of papers, and in this sense, the last operations were no different from the previous ones.. And already in 1918 Bernard Baruch became US Secretary of Defense. The investigation led to, that he sold his place on the stock exchange, but involvement in the distribution of military orders gave him much more opportunities to earn money. Yes, and he did not completely move away from investments. Only now they were more targeted.. Baruch's favorites were companies producing weapons and various military ammunition. According to some information, by the end of World War I, Bernard Baruch owned shares in most factories, carrying out military orders. Naturally, and generous funds, received by factories from the state budget, stayed in his pocket. Claim, that by the end of the war his fortune had increased to $200 million.
After the war, Bernard Baruch did not slow down his political ambitions.. Successfully investing your money in a career in politics, he could seriously influence the solution of various issues of the US economy. After Woodrow Wilson, he remained the constant companion of Presidents Warren Harding., Herbert Hoover, Franklin Roosevelt and Harry Truman. Indeed, his place in politics gave him much more information, than other traders. So, to the Great Depression 1929 Baruch was fully trained. Also in 1928 he sold all his shares and bought bonds with the proceeds. BUT 24 October 1929 of the year, on the famous "Black Tuesday" of the American stock exchange, Baruch appeared in her hall with Winston Churchill. And they watched the second biggest crash in the US stock market.. Say, that Bernard Baruch appeared on the stock exchange with Churchill only then, to demonstrate to him his power over the market.
Although Bernard Baruch did not get rich in the Great Depression, seems to be, he could have done it. And after the Great Depression, Baruch continued to enjoy his privileged position. One can only guess, how much money did he make off the gold standard. This standard existed until April 1933 of the year, until it was abolished by President Franklin Roosevelt. In order to bring the country out of depression, the government announced the purchase of gold from the population. Refusing to hand over gold could be punished with a fine or a long prison sentence.. Irredeemable paper money was issued in exchange for gold. And already 22 October 1933 of the year, once most of the gold has been surrendered, Roosevelt announced the devaluation of the dollar, that is, the government from that moment began to buy gold at an increased price. Now one dollar could only buy 1/35 ounces, while before the abolition of the gold standard - 1/20 ounces. Being close to the president, Bernard Baruch, undoubtedly, took advantage of the opportunity to make money on gold. But not only on it.. According to some information, towards the middle 1933 Baruch held options on a third of the world's known silver reserves at the time. A few months later, while the hype around the devaluation of gold has not subsided yet, Roosevelt doubled silver buyback price. The official pretext was to help the miners, working in the silver mines. But in reality, Bernard Baruch received the subsidy..
During World War II, Baruch's role as an authority on war economics became even more prominent.. Believe, that he had a hand in the plan for the reconversion of the American economy, and in general the economic policy of the country, according to many, heavily dependent on Baruch. Later he solved many problems, related to the spread of nuclear technology, and actively influenced American policy towards the USSR. But at the same time, his activity in the stock market has clearly waned.. Bernard Baruch devoted himself entirely to politics, remaining the “gray eminence” of the White House administration until his death in 1965 year.
