Bernard Baruch once said that Wall Street provided an extended course on investor behavior. It taught him that human nature was the driving force behind markets and investing mistakes.

Baruch was born in 1870 and began his career as a broker. He quickly learned that every investment carries some risk. It’s always a gamble.

What we can try to do perhaps is to come to a better understanding of how to reduce the element of risk in whatever we undertake. Or put another way…our problem is how to remain properly venturesome and experimental without making fools of ourselves.

He must have figured it out because, by the turn of the century, he had his own brokerage firm, a seat on the NYSE, a few million to his name, and a reputation as a savvy financier.

His fortune continued to grow during the 1920s bull market. But as luck would have it, he sidestepped the crash. Continue Reading…