Russell Sage: The Money King

[giofranchi]

I have started reading

 

[amazonsearch]Russell Sage: The Money King[/amazonsearch]

 

There can be no history: only biography

--Ralph Waldo Emerson

 

So long as some men have more sense and self-control than others, just so long will some men be wealthy.

--Russell Sage

 

Highly recommended! :)

 

giofranchi

[giofranchi]

I made my millions from maxims, chief of which was the one my father favored, which went 'Any man can earn a dollar, but it takes a wise man to keep it!'

--Russell Sage

 

 

giofranchi

[giofranchi]

About the Panic of 1857:

 

Instead of dreading a market decline, Sage welcomed it. He was prepared to make a killing. And he did.

--Russell Sage: The Money King

 

 

giofranchi

[giofranchi]

If a stock is high enough to be sold, it is high enough to be also sold short.

--Russell Sage

 

 

giofranchi

[giofranchi]

Sage subsequently developed a penchant for perfection in three areas of business: money-lending, corporate consolidations, and stock-market trading.

--Russell Sage: The Money King

 

 

giofranchi

[giofranchi]

To educate himself in the art of profits from stock-price changes, he analyzed and studied the methods of Drew, Vanderbilt, Keene, Jerome and other financial titans.

--Russell Sage: The Money King

 

 

giofranchi

[JEast]

I bought a used hardcopy a few years ago and enjoyed the read for its financial history content.  Anytime an investor can get a little financial history, you should.

 

For Sage himself, the author paints the picture that he was considered the lender of last resort and most hated him for it.  But the times were somewhat different (or were they?) and he was not trying to make friends.

 

 

Cheers

JEast

[giofranchi]

Indeed he [sage] was one of the country's great risk-takers and though constantly fishing in speculative waters, had the happy faculty of assuming his risks in a low priced market.

 

 

giofranchi

[wescobrk]

I don't have a link but Buffett said on cnbc on wed that sage obtained his money in a terrible way but his charity has done some great things.

[Ian L]

If a stock is high enough to be sold, it is high enough to be also sold short.

--Russell Sage

 

 

giofranchi

 

He ignores scarcity of capital and margin of safety. A stock can very simply be described as cheap, roughly fair value or expensive. You might want to sell a stock that you bought cheap when it becomes fair value, but you normally wouldn't want to sell it short at fair value.

[giofranchi]

Buffett said on cnbc on wed that sage obtained his money in a terrible way

 

Can I ask why?

 

giofranchi

[giofranchi]

If a stock is high enough to be sold, it is high enough to be also sold short.

--Russell Sage

 

 

giofranchi

 

He ignores scarcity of capital and margin of safety.

 

I advise to read the book. You will surely understand that almost nobody in history understood scarcity of capital and margin of safety as well as Mr. Sage did. :)

 

giofranchi

 

[giofranchi]

Let honesty and industry be thy constant companion.

Spend each day one cent less than thy clear gains.

--Russell Sage

 

 

giofranchi

 

 

[giofranchi]

Sage never made a bid for any merchandise. It was his practice to examine someone else's offer. He well knew that the price of any commodity was usually arrived at by the pearson "most anxious to do the business."

 

 

giofranchi

[giofranchi]

When the Civil War ended, one of the most urgently needed commodities required to start the war-torn nation back on the road to recovery was money - a commodity Russell Sage never ran out of. Sage's boast, "I have always had more ready cash at my command than any bank," if not exactly accurate, was in good measure true.

 

 

giofranchi

[giofranchi]

It was a typical Sage deal. Slocum and Wheeler put up most of the money, Sage the brains and management ability. Profits were to be split three ways.

 

 

giofranchi

 

[giofranchi]

Buy straw hats in the winter, when nobody wants them, and sell them in the summer when everybody needs them.

--Russell Sage

 

 

Gio

[giofranchi]

Sage also averred that the use of a call to protect a short sale and the use of a put to protect a long position were the only sensible ways for any speculator to trade the market. And he was right.

 

 

Gio

[giofranchi]

An important part of business, to Russell Sage, was revenue.

It was the opinion of Professor Grodinsky that during Sage's tenure, revenue that should have been ploughed back into maintenance and improvements of the right-of-way and equipment of the leased roads was continuosly and ingeniously transferred to the treasury of the MOP, from which it flowed uninterruptedly into the pockets of Sage and his colleagues, in the form of interest payments, dividend payments and service charges. As a result of the continual plunder of the leased roads by the MOP, their equipment broke down, their assets were looted "and their financial condition became deplorable."

 

This reminds me of Mr. Malone, who might have known and studied Mr. Sage’s methods.

I must take heed and try to follow in their steps! ;)

 

Gio

 

[giofranchi]

Outwardly he diligently fostered his public image of habitual miser. Inwardly he enjoyed himself at the public's inability to understand  his actions. The neighbors set their clocks with his comings and goings. From the first handshake in the morning with the neighborhood policeman, each business day followed the same pattern.

 

Gio

[giofranchi]

At the age of 3, Russell Sage lived through his first panic. He was too young to profit from it, but during his lifetime he made up for that lost opportunity with all the others that followed.

 

 

Gio

[giofranchi]

Sage, by the spring of 1893, had "pulled in his horns." When chided for his timidity, he replied that the first rule to learn about Wall Street is to "keep what you already have."

 

 

Gio

[giofranchi]

According to one tale that winter, Sage stood his post on the corner of Board and Wall when he was approached by a younger, less-affluent money changer.

“That’s a fine coat you have on Mr. Sage,” he said.

“Like it do you?” asked the financier.

“Yes, Sir,” sighed the younger man. “I sure would like to own a fine coat like that, Sir.”

“Well,” said Sage, “It’s for sale.”

At this the kerb-broker leaned over and fingered Sage’s lapel. “Why, Mr. Sage,” he exclaimed, “that coat’s new isn’t it?”

“Yes Sir. One of my nephews had it made for me at his own tailor.”

(The story went that Sage’s nephew had had the coat made for $75. But he knew Sage would never pay more than $15. So he had the tailor charge Uncle Russell $15 – he, himself, supplied the difference. Sage, an unsurpassed judge of values, whether it was horses or shoebuttons, realized that at $15 he had bought a bargain.)

“Well, Mr. Sage, how much do you want for that coat?”

“$30.”

“Done.”

With that magic word, the trade was sealed. Sage immediately shrugged out of the overcoat, pocketed the $30 and went off to the office for his old coat, chuckling at his fast profit.

 

 

Gio

 

[giofranchi]

The only partner I ever had was my wife.

--Russell Sage

 

 

Gio

[giofranchi]

Mr. Sage, when will you retire?

Retire is not a Yankee word.

When will you take a vacation?

Vacations, Sir, are the result of business abnormality.

 

 

Gio