Finance Trends Letter

Legendary speculator Bernard Baruch discusses trading on inside information, stock tips, and the problems of information overload back in 1957 (excerpt from Bernard Baruch - My Own Story ). Bernard Baruch on inside information : "The longer I operated in Wall Street, the more distrustful I became of tips and "inside" information of every kind. Given time, I believed that "inside" information can break the Bank of England or the United States Treasury". Baruch adds that most "inside information" is designed to mislead the gullible and that corporate insiders are just as likely to be led astray by their "infallible" informational advantage and belief in the company. His comments closely resemble Jesse Livermore's sentiments on stock tips and insider information.  Trading on tips : Echoing Joseph Kennedy's anecdote about the stock-tipping shoe shine boy of 1929 , Baruch relates his own tale of taxi drivers, shoe shine ...

Bernard Baruch with Winston Churchill (left) and Dwight Eisenhower (right) in 1953 (via loc.gov ). Related posts : 1. Speculation drives human progress .  2. Bernard Baruch: Why I Still Believe in the Future .

Speculation, in all its forms, is what drives human progress. This is the core message behind Michael Bigger's recent post, "The Desire to Speculate" . An excerpt from Michael's essay: " It is said that the desire to speculate is very strong in the American people. That is why our country has made greater progress than any other country in the world, because progress is the result of speculation . We are not referring merely to stock speculations, but to the word in its broadest sense. Every new undertaking is a speculation. An inventor speculates on what he is going to invent. Often such speculations result in losses, because many inventors, or would-be-inventors, never accomplish very much. They spend their money, time, and efforts, and probably live years in poverty, and then if the invention is not profitable, they are heavy losers. It is the same thing with every new business. It is purely a speculation... " This is a great point, and one that...

Checking out this article from Raymond James strategist, Jeff Saut, on the "Intrigue of Permanent Investments" (hat tip: Derek Hernquist ). There are some very interesting comments here on gold, farmland, and the "intriguing concept" of a permanent investment portfolio - if such a thing can ever really exist. Rather than spoil the surprise (or front-run the excellent Bernard Baruch story), we'll let you read it for yourself. Enjoy the article! Related articles and posts: 1. Tangible Investments - Financial Sense Online. 2. Unloved, Undervalued, & Underowned - Jim Puplava at FSO.

The financials seem to be the prevailing theme in this Friday's, "Features of the week" . But Lehman , BKX , and Ambac aren't the only items we have in store for you; there's lots more to see and hear. Read on! 1. Lehman Brothers may raise $5 billion in capital in an effort to de-lever the balance sheet. The bank had been seen as a sale target earlier in the week. For more, see: "Making sense of David Einhorn vs. Lehman Brothers" , and, Jim Cramer's Blogging Stocks piece, "Einhorn gutted Lehman, and that's OK" . 2. US unemployment rises at fastest rate since 1986. 3. Morgan Stanley, Merrill, Lehman ratings cut by S&P . 4. Some were taking this week's breakdown in the bank index ( BKX ) as an ominous sign; will there be an upcoming bounce for the banking sector? 5. MBIA and Ambac lose their S&P AAA ratings , affecting over $1 trillion in debt securities guaranteed by the companies. 6. IEA says world needs $45,000bn ener...