Tuesday, October 10, 2006

Book Review of "Bernard M. Baruch: The Adventures of a Wall Street Legend"

Bernard M. Baruch: The Adventures of a Wall Street Legend

What Is It About?

This biography covers the life of Bernard Baruch. Baruch was a famous stock market participant who made, lost, and made again several millions over several decades on Wall Street. The most interesting aspect of this book is discovering that Mr. Baruch was not only one of the more prominent investors/traders of his day, but was also a leading political player as an economic advisor to several U.S. presidents. The book is well written and presents a balanced narrative of an obviously complex man.

What Did I Learn As A New Investor?

As is the case with many biographies, this book presents a balanced examination of Mr. Baruch’s entire life – not just the part that involved the stock market. The most important part of this book, from an investing/trading perspective is a two page memo Baruch wrote on the basics of investment and speculation.

The memo covers such topics as:

Self Reliance - Do your own thinking. Remove emotions from the process.

Judgment - Consider and think on all facts. Do not let what you want to happen influence you.

Pliability - Be flexible. Recognize when your initial analysis was wrong and act accordingly.

There is also a short, but insightful, discussion of psychology and how it impacts investing and trading. Overall, I think this part of the book provides a new investor/trader with an introduction to the importance of having rules and following them.

The Good News

This is a good biography of an interesting man. The memo (referenced above) is well worth the time to read and study.

The Bad News

As mentioned, there is not much specific information on Bernard Baruch's investment process. While it is a good biography, those looking for a more definitive how-to guide should search elsewhere.

The Bottom Line

For those who like biographies, this book is a good read. For those more focused on searching for a how-to manual, I would recommend simply reading that portion of the book which contains the memo.

Overall this is a good book; but, one I recommend you borrow from the library rather than buy.

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