The man who correctly predicted the U.S. stock market crash of 1929.  

 

GregBO
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25/04/2019 4:06 pm  

On September 5, 1929, Roger Babson presented a speech stating the “sooner or later, a (stock market) crash is coming, and it may be terrific".  The stock market declined about 3% later that day and the decline was reported as “the Babson Break”.  Experts called this a “healthy correction’ and a buying opportunity.  The ‘Stock Market Crash of 1929’ began on October 24th, 1929 and ended on October 29th, 1929  when the New York Stock Exchange collapsed.

Roger W. Babson was a man among men within the Investment houses of the North East from 1904 onward. He was also the 1940 U.S. Presidency candidate for the Prohibition Party.  

After contracting a severe, fully developed case of tuberculosis at age 26, he choose not to accept defeat, but instead fought and overcame the illness.  Babson refused to move to a warmer, drier environment at that time and instead stayed in the cold climate of the North East. His lifelong stronger-than-average work ethic ensured that he continued to overcome the initial onset of the illness.

Babson graduated from the Massachusetts Institute of Technology with a degree in Engineering.  While there, he successfully lobbied for the creation of the first “Business Engineering” course.  Upon graduation, Babson was instrumental in consolidating the "statistical data analyzation" banks were carrying out individually, and instead created the first central financial data analysis agency.  Babson's subsequent success as an investor was based upon attributing the business cycle to “Newton’s law of action and reaction” and ensured his rise as a stock market analyst and financial theorist. "Babson applied the concept of actions and reactions to classical economics, which led to the development of the Babsonchart of Economic Indicators. The Babsonchart was designed to not only assess current economic, business and investment conditions, but to predict future conditions as well."

He later founded the Babson Institute (College) in 1919 and the Institute offered the first “Certificate in Business Administration/Management” for students with actual business experience.  He later bought personal property in Florida for use as a winter residence, as well as to establish a second institute.  The Babson Institute library handbook states: “No man can hope to learn more than a small portion of collected knowledge, but to know where and how to find what is desired often will point the way to success or failure.”

Babson established the investment advisory company 'Babson's Reports', which published one of the first investment newsletters in the U.S. Babson also published many books, magazine articles and newspaper columns related to business and financial trends over this lifetime. 

Babson died at age 91 in Mountain Lake Florida,

​"What we have done for ourselves alone dies with us; what we have done for others and the world remains and is immortal." -Albert Pike

​"​My father didn't tell me how to live; he lived, and let me watch him do it.​" - Clarence Buddinton Kelland


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GregBO
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25/04/2019 4:13 pm  
Roger Babson had ten commandments he followed in investing and encouraged his readers to do the same.  

“Don’t look for society to give you permission to be yourself,"

  • 1. Keep speculation and investments separate.
  • 2. Don't be fooled by a name.
  • 3. Be wary of new promotions.
  • 4. Give due consideration to market ability.
  • 5. Don't buy without proper facts.
  • 6. Safeguard purchases through diversification.
  • 7. Don't try to diversify by buying different securities of the same company.
  • 8. Small companies should be carefully scrutinized.
  • 9. Buy adequate security, not super abundance.
  • 10. Choose your dealer and buy outright (i.e., don't buy on margin.)
  • “More people should learn to tell their dollars where to go instead of asking them where they went."

---------------------------------------------------------------

Many are still relevant today and are followed by many current financial traders.

​"What we have done for ourselves alone dies with us; what we have done for others and the world remains and is immortal." -Albert Pike

​"​My father didn't tell me how to live; he lived, and let me watch him do it.​" - Clarence Buddinton Kelland


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The Evil Genius
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25/04/2019 7:21 pm  

Point number 1 was turned into law with the Glass-Steagall Act of 1932 followed by the Banking Act of 1933. Glass-Steagall was repealed in 1999 turning our banks into casinos----again. 


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Uly The Cunning
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25/04/2019 7:30 pm  

I wonder what he would say about our current situation. While I don't see an immediate cause for alarm, I do see a lot of investments based on misguided information and naive investors. In no certain time-line, I expect many unhappy investors asking that question, having not made the decision. 

“More people should learn to tell their dollars where to go instead of asking them where they went."

I have zero confidence in our stock market, and even less confidence in the big names currently riding through it. 

"Remember, you're fighting for this woman's honor, which is probably more than she ever did."
Groucho Marx: Duck Soup (1933)


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GregBO
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25/04/2019 8:37 pm  
Posted by: The Evil Genius

Point number 1 was turned into law with the Glass-Steagall Act of 1932 followed by the Banking Act of 1933. Glass-Steagall was repealed in 1999 turning our banks into casinos----again. 

Check.  While I do not know specifically, I would feel certain that he a some degree of influence in these acts occurring. By all accounts he seems to have been a top notch person. 

​"What we have done for ourselves alone dies with us; what we have done for others and the world remains and is immortal." -Albert Pike

​"​My father didn't tell me how to live; he lived, and let me watch him do it.​" - Clarence Buddinton Kelland


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GregBO
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25/04/2019 8:46 pm  
Posted by: Uly The Cunning

I wonder what he would say about our current situation. While I don't see an immediate cause for alarm, I do see a lot of investments based on misguided information and naive investors. In no certain time-line, I expect many unhappy investors asking that question, having not made the decision. 

“More people should learn to tell their dollars where to go instead of asking them where they went."

I have zero confidence in our stock market, and even less confidence in the big names currently riding through it. 

I am certain that he would be very skeptical about the current market as he advocated reducing debt and taxation, while "assuring workers and consumers a fair share of industry's products and profits."  The current market is certainly skewed away from the individual investor and the continued rise has to end at some point.  

Investors need to get out of debt and have a small bankroll, but then pull back funds so that they can survive when the next market collapse comes.

​"What we have done for ourselves alone dies with us; what we have done for others and the world remains and is immortal." -Albert Pike

​"​My father didn't tell me how to live; he lived, and let me watch him do it.​" - Clarence Buddinton Kelland


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Flicker
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25/04/2019 8:52 pm  

I have investments but now is not a good time to buy. Many of the current companies are just waiting for the drop and know their stock is inflated with the politics causing so much attention. Without more certainty, they will not increase much more than they are and the risks are too high for the possible profit if you do choose well. If you do decide to invest, go with network communications. They are expanding their technologies and have the best chance of seeing an increase in the next 6 months while having the lowest chance of losing its place in the market.


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