Andrew Carnegie - David Nasaw

[giofranchi]

[amazonsearch]Andrew Carnegie[/amazonsearch]

 

What Andrew Carnegie learnt when he was 16:

 

Andy’s reaction to getting his first dividend check, as recorded in his Autobiography and elsewhere, was euphoric, as it should have been: he was getting a guaranteed 24 percent interest on his investment. "I shall remember that check as long as I live … It gave me the first penny of revenue from capital – something that I had not worked for with the sweat of my brow. ‘Eureka!’ I cried. ‘Here’s the goose that lays the golden eggs.’" Before cashing the check, he showed it to his friends at their Sunday afternoon gathering. "The effect produced … was overwhelming. None of them had imagined such an investment possibility." They were all amazed, he would later write in an article in Youth’s Companion, by the magical properties of investment capital. "How money could make money, how, without any attention from me, this mysterious golden visitor should come, led to much speculation upon the part of the young fellows, and I was for the first time hailed as a ‘capitalist.’"

 

I am reading [amazonsearch]Andrew Carnegie[/amazonsearch] by David Nasaw: a brilliant piece of financial history.

Highly recommended!

 

Cheers,

 

Gio

 

[ERICOPOLY]

Carnegie is the one who fought for the inheritance/estate tax and claimed "The man who dies rich dies disgraced".  He also lobbied other rich to give their wealth away:  see "The Gospel of Wealth".

 

One can see a lot of Carnegie in Buffett, but for whatever reason the media never points this out.

 

[cobafdek]

Long before Buffett's widespread fame, I learned of Carnegie.  In my elementary school years, I saw the name on a plaque in front of this library in the little town where I grew up.  Lots of fond memories of hours spent inside:

 

http://www.galionlibrary.org/about/

[boilermaker75]

Carnegie is the one who fought for the inheritance/estate tax and claimed "The man who dies rich dies disgraced".  He also lobbied other rich to give their wealth away:  see "The Gospel of Wealth".

 

One can see a lot of Carnegie in Buffett, but for whatever reason the media never points this out.

 

Carnegie and Rockefeller had a competition to see who could acquire the most money and then to see who could be the most charitable.

[giofranchi]

There was risk involved in proceeding on his own, but that could be minimized, if not eliminated entirely, by following the rules of the game he had learned from his mentors: Only invest in companies you have investigated yourself; only invest in companies about which you have insider knowledge; only invest in companies that sell goods or services for which demand is growing; never invest as an individual, but always with a group of trusted associates who together will own a controlling or dominant interest in the company.

 

 

Gio

 

[giofranchi]

Later in life, when Carnegie was called upon to advise young men on how to succeed in business, he never suggested that unceasing hard work was a prerequisite for acquiring wealth. Though born a Scotsman, he was not a Calvinist in any sense of the word. He did not regard hard work as a virtue in itself. Nor did he believe that the accumulation of wealth was a sign of his “election” or a just reward for past diligence. The piling up of wealth signified nothing in itself, except that one had been in the right place at the right time, avoided a variety of moral vices, and wisely concentrated one’s energies and talents.

 

 

Gio

 

[giofranchi]

In later years Carnegie would insist that he had never traded or manipulated or speculated in stocks, but had made his money from manufacturing iron and steel products. His Autobiography backs up his assertions, but only by carefully editing out a critical period in his business career. From 1866, when he returned from his yearlong tour of Europe, to 1872, when he entered the steel business, Carnegie would accumulate the fortune that was later reinvested in his steel mills by doing precisely what he would later condemn: buying and selling shares in companies whose assets he knew were worth far less than the value of their stock.

 

 

Gio

 

[cobafdek]

In later years Carnegie would insist that he had never traded or manipulated or speculated in stocks, but had made his money from manufacturing iron and steel products. His Autobiography backs up his assertions, but only by carefully editing out a critical period in his business career. From 1866, when he returned from his yearlong tour of Europe, to 1872, when he entered the steel business, Carnegie would accumulate the fortune that was later reinvested in his steel mills by doing precisely what he would later condemn: buying and selling shares in companies whose assets he knew were worth far less than the value of their stock.

 

 

Gio

 

Did the publisher employ a proofreader?  Shouldn't that last line read "buy and selling shares in companies whose assets he knew were worth far more than the value of their stock"?

 

P.S.  Since Carnegie toured Europe, let us know if he saw Liguria and what he thought of it.

[giofranchi]

Did the publisher employ a proofreader?  Shouldn't that last line read "buy and selling shares in companies whose assets he knew were worth far more than the value of their stock"?

 

Of course I had the same thought! ;)

 

P.S.  Since Carnegie toured Europe, let us know if he saw Liguria and what he thought of it.

 

At the end I decided NOT to buy the apartment... So, no more need to know what Carnegie would have done! ;D

 

Gio

[cobafdek]

Did the publisher employ a proofreader?  Shouldn't that last line read "buy and selling shares in companies whose assets he knew were worth far more than the value of their stock"?

 

Of course I had the same thought! ;)

 

Alternatively, maybe the line as printed is correct:  it could refer to momentum-trading and short-selling, and those were what Carnegie was condemning.

 

At the end I decided NOT to buy the apartment... So, no more need to know what Carnegie would have done! ;D

 

Gio

 

Damn!  I was looking forward to the pictures.

[giofranchi]

Alternatively, maybe the line as printed is correct:  it could refer to momentum-trading and short-selling, and those were what Carnegie was condemning.

 

Instead I simply thought that the assets of a company as reported on the books might have been undervalued for whichever reason, while instead Carnegie knew the value of its shares was worth far more because of the earnings the company was going to generate… But I admit it is not very clear…

 

Gio