Yankee genius : a biography of Roger W. Babson, pioneer in investment counseling and business forecasting who capitalized on investment patience [Hardcover]

Earl L. Smith (Author)

Product Details

• Hardcover
• Publisher: Harper; 1St Edition edition (1954)
• ASIN: B00005Y02C
• Product Dimensions: 9.3 x 6.1 x 1.3 inches
• Shipping Weight: 1.3 pounds
• Average Customer Review: 4.0 out of 5 stars  See all reviews (1 customer review)
• Amazon Best Sellers Rank: #3,192,315 in Books (See Top 100 in Books)

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This review is from: Yankee genius;: A biography of Roger W. Babson, pioneer in investment counseling and business forecasting who capitalized on investment patience (Hardcover)

The following Review of Yankee Genius, A Biography of Roger W. Babson, by Earl L. Smith (Harper & Brothers Publishers, New York, 1954 summarizes the life of a seminal figure in American history. Mr. Smith describes in detail the living conditions and hardships of an American growing up in a New England town in the late nineteenth and early twentieth centuries. The book is also a Horatio Alger success story showing what intelligence and industry can do for an individual and for the community in which he lived.


Roger Babson (1875-1967), a nationally respected economist in the United States in the 20's & 30's was born in Gloucester, Massachusetts. His father was a shopkeeper and his mother a member of the Congregational Church. Between the two Babsons he acquired a taste for mathematics and a sense of propriety that fostered standards of morality and of fortitude that inspired him as he pursued his education and his business. He was a graduate of the Massachusetts Institute of Technology (1898) at a time when scientific and business education was not as rigorous and specialized as it was to become. His aptitude for mathematics and his moral up-bringing attracted the attention of would-be employers. Knowing about the booms and busts of American business and also aware how stockbrokers gambled with paper stocks rather than with the produce the stocks represented, he was skeptical of the relation of stock prices to their past and present values. He saw how stock speculation based on the anticipation of future yields in production could lead to exaggerated stock values that were not based on conditions of supply and demand. Misjudged anticipations of stock market values could bring about inflation, excessive stock accretion, and a situation in which the expansive optimism of investors could result in a succession of booms and busts as stocks and commodities adjusted to oversupplies and decreasing demands. Prone as he was to mathematics, his compilations and analyses of business statistics went against prevailing opinion. As a result, he was thought to be a Cassandra to whom nobody would listen. Finally the stock market crash of 1929 proved the wisdom of Babson's gloomy theories and predictions.

Proofs Babson advanced to back up his ideas attracted reporters and investors. It was only a matter of time before he set up institutions to spread his ideas, one of which Babson College in Wellesley, Mass. exists to this day.

Ultimately the bureau and the periodicals that Babson established to advertise his theories were acquired and replaced by Standard and Poors, whose rating system for stock purchases has given usually accurate but not always infallible information. In terms of finance, Babson's great warning was to use caution whenever a bubble was thought to be developing, as occurred in the past with regards to whale oil and the railroad, real estate and copper mining industries. Babson's advice to buy low and sell high has become a mantra among investors, though the difficulty lies in determining when the high is too high & the low is too low. This practical advice is of limited value when commodities on the stock marker are of no value whatsoever. That is why success in the stock market is not always guaranteed and luck can sometimes be more important than science.

While Babson's writings and schools concentrated on the best ways to earn a fortune, he was entrenched in the ideals of his childhood. Like Benjamin Franklin, though in a more Puritanical way, he counseled his students to work hard, to live clean lives, to avoid liquor, and to attend church regularly. He was an admirer of William Tyndale who was the first to translate the Bible into English from Hebrew and Greek texts. He believed that he could find what God expected him to do by reading the Book. In a like manner he could understand the stock market by examining its operations rather than by listening to other people's views..

Always a native of Gloucester and a New Englander he gave people in Gloucester much avuncular advice. Like Benjamin Franklin's maxims in his Almanac, Babson inscribed on the granite boulders of Dogtown maxims that had guided his life: HELP MOTHER, GET A JOB, KEEP OUT OF DEBT. As an indication that he knew that their was more to life than pens and ledgers, he took pains to establish a bird sanctuary and a watershed for reservoirs in Dogtown, efforts that may have been prompted by his economic leanings but were also derived from his moral sense that the future of man and of nature needed guidance and protection.

He may not be hip in the modern sense of the word, but the old-fashioned notions of Roger Babson and the old-fashioned world in which he lived has helped to show succeeding generations what to cherish and what to seek.