Bernard Baruch was known as the Lone Wolf of Wall Street, but he wore many hats. He was a speculator, an investor, a deal maker, a philanthropist, and an advisor to Presidents.
Baruch was born in Camden, South Carolina in 1870. The family moved to New York when he was 10. He got his first job on Wall Street in 1889 as a runner for $3 a week. It was there he first learned the art of arbitrage, reorganizations, and speculation.
He became a partner at A.A. Housman & Company at age 25, playing speculator and dealmaker for the firm. In one instance, he put arbitrage skills to work after learning of the potential end to the Spanish-American War. It was July 3rd. The New York exchange was closed on the 4th. So he bought stocks on the London exchange, expecting to sell them for a big profit when the exchange opened on the 5th. When the New York exchange opened on the 5th, his stock prices soared.
In another instance, he played dealmaker in a tobacco merger. He convinced Liggett & Myers to merge with Union Tobacco. At the last minute, a third company, Continental Tobacco, joined to create the monopoly known as The American Tobacco Company. Baruch earned a cool $150,000 for his effort.
By 33, he was a millionaire, bought a seat on the exchange, and set out on his own. Continue Reading…