Mark J. Higgins, CFA, CFP®

Mark J. Higgins, CFA, CFP®

mark@enlightenedinvestor.com

Mark J. Higgins, CFA, CFP®

Mark Higgins - Bio Picture - 2023-08

Financial Historian and Senior Investment Advisor

Financial Historian and Senior Investment Advisor

Mark J. Higgins, CFA, CFP® is a widely respected financial historian, author, and speaker. His works appear regularly in publications, such as the Museum of American Finance's Financial History Magazine and the CFA Institute's Enterprising Investor. Prior to writing Investing in U.S. Financial History, Mark served as a senior investment advisor for more than twelve years. In this role, he provided investment advice to trustees of large institutional investment plans, such as endowments, pension plans, foundations, and corporate plans, with aggregate assets of more than $60 billion. Mark is also a frequent speaker both domestically and internationally on topics related to U.S. financial history and institutional investment management.

Mark graduated from Georgetown University Phi Beta Kappa and Magna Cum Laude with a bachelor's degree in English and Psychology. He received an MBA from the Darden School of Business at the University of Virginia. Mark is a CFA charterholder and CFP® practitioner. 

My Favorite Quotes from the Annals of Financial History

My Favorite Quotes from the Annals of Financial History

Importance of Financial History

 

“Whoever wishes to foresee the future must consult the past; for human events ever resemble those of preceding times. This arises from the fact that they are produced by men who ever have been, and ever shall be, animated by the same passions, and thus they necessarily have the same results.”

– Nicolo Machiavelli

Resistance to Learning from History

 

“Facing a choice between changing one’s mind and proving that there is no need to do so, almost everybody gets busy working on the proof.”

– John Kenneth Galbraith

Wealth and Happiness

 

“A calm and modest life brings more happiness than the pursuit of success combined with constant restlessness.”

– Albert Einstein

Repetition of Financial Innovation

 

“As to new financial instruments, however, experience establishes a firm rule, and on few economic matters is understanding more important and frequently, indeed, more slight. Financial operations do not lend themselves to innovation. what is recurrently so described and celebrated is, without exception, a small variation on an established design, one that owes its distinctive character to the brevity of financial memory. The world of finance hails the invention of the wheel over and over again, often in a slightly more unstable version.”

- John Kenneth Galbraith

Dangers of Speculation

 

"When a speculator wins, he don’t stop ‘til he loses.”

– George Lorimer

Ego and Financial Recklessness

 

“Nothing so undermines your financial judgement as the sight of your neighbor getting rich.”

- J. Pierpont Morgan

Importance of Public Credit (1790s)

 

“Exigencies are to be expected to occur, in the affairs of nations, in which there will be a necessity for borrowing. That loans in times of public danger, especially from foreign war, are found an indispensable resource, even to the wealthiest of them…it is essential that the credit of a nation should be well established.”

– Alexander Hamilton

Paradox of American Speculation (1800 - 1850)

 

“In the midst of all this speculation, while some enrich and some ruin themselves, banks spring up and diffuse credit; railroads and canals extend themselves over the country; steamboats are launched into rivers, the lakes, and the seas...Some individuals lose, but the country is the gainer; the country is peopled, cleared, cultivated; its resources are unfolded, it's wealth increased.”

- Michel Chevalier

Gilded Age Securities Markets (1866 -1900)

“For many denizens of Wall Street at the time, the measure of a man was not his honor, the value of his word, or even his net worth; it was the audacity of his scheming, regardless of whether the securities he was trading were legitimate, fabricated, or even his to sell.”

- Michael Hiltzik

Gilded Age Securities Markets (1866 -1900)

 

“It might be said that the development of American commerce and industry was made possible by natural resources, the unwise investments of Europeans, and the dumb good luck of domestic investors.”

– Robert Sobel

Market Efficiency in the Gilded Age (1866 -1900)

 

“He [Daniel Drew] once told Gould that to speculate on Wall Street without inside information made as much sense as to drive black pigs in the dark.”

– Edward Renehan, Jr.

Gilded Age Securities Markets (1866-1900)

 

"People who are honest nowadays are accused of being mad."

- Hetty Green, the Queen of Wall Street

The Panic of 1907

 

“In the history of every great catastrophe, you’ll find some masterly bit of stupidity set fire to the oil-soaked rags.”

– Edwin LeFevre

The Panic of 1907

 

“If you have any money in that place [the Knickerbocker Trust], get it out the first thing tomorrow. The men in that bank are too good looking. You mark my words.”

- Hetty Green, the Queen of Wall Street

The Roaring 20s

 

“Men have been swindled by other men on many occasions. The Autumn of 1929 was, perhaps, the first occasion when men succeeded on a large scale in swindling themselves.”

– John Kenneth Galbraith

The Roaring 20s

 

"There is no way of constructing a rascality index, but if one could be made, the highs of the Drew-Fisk-Gould era would be overshadowed by the peaks of the 1920s.”

- Robert Sobel

The Roaring 20s

 

"An Aristocracy of Successful Investors advertised a new guide to investment. The headline read "He Made $70,000 After Reading 'Beating the Stock Market." No doubt whoever it was did. He might have made it without reading the volume or being able to read."

- John Kenneth Galbraith

The Roaring 20s

 

“Periods of speculative frenzy always draw both scoundrels and suckers to Wall Street, the way a three-alarm fire attracts onlookers and pickpockets.”

- Robert Sobel

The Great Crash of 1929

 

“The descent is always more sudden than the increase; a balloon that has been punctured does not deflate in an orderly way.”

- John Kenneth Galbraith

Value of Securities Regulation (1930s)

 

“After five short years, we may now need to be reminded what Wall Street was like before Uncle Sam stationed a policeman at its corner, lest, in time to come, some attempt be made to abolish that post.”

– Ferdinand Pecora

World War II and the Arsenal of Democracy (1940s)

 

“America is like a giant boiler…once the fire is lighted under it, there is no limit to the power it can generate.”

- Winston Churchill

Rehabilitation of the Brokerage Industry (1940-1960)

 

“The customer may not always be right, but he has rights. And upon our recognition of his rights and our desire to satisfy them resets our chance to succeed.”

- Charles Merrill

The Unattractive Prospects of Active Management (1960s)

 

“My basic point here is that neither Financial Analysts as a whole nor the investment funds as a whole can expect to ‘beat the market,’ because in a significant sense they (or you) are the market.”

– Ben Graham

The Great Inflation (1968 - 1982)

 

“Inflation is always and everywhere a monetary phenomenon, in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.”

– Milton Friedman

Rise of Index Funds (1970s)

 

“[Efficient market theory] is only controversial among people that don’t want to believe it.”

- Eugene Fama

Rise of Index Funds (1970s)

 

“Sure, it’d be great to get out of stocks at the high and get back in at the low. But in 55 years in the business, I not only have never met anybody who knew how to do it, I’ve never met anybody who had met anybody who knew how to do it.”

– Jack Bogle

Rise of Portfolio Complexity (1990s)

 

“As a general rule of thumb, the more complexity in a Wall Street creation, the faster and further investors should run.”

– David Swensen

Overuse of Alternative Investments (2000s)

 

“You don’t want to be average [investing in private equity]; it’s not worth it, does nothing. In fact, it’s less than the market. The question is ‘How do you get to first quartile?’ If you can’t, it doesn’t matter what the optimizer says about asset allocation.”

– Allan S. Bufferd

Impact of Twenty-Four Hour News on Investing (2000s)

 

"Any time you hear financial experts talking about how the market went up because of such and such - Just remember it's all nonsense."

- Jim Simons

Overuse of Active Management by Institutional Investors (2000s)

 

“Any pension fund manager who doesn't have the vast majority—and I mean 70% or 80% of his or her portfolio—in passive investments is guilty of malfeasance, nonfeasance, or some other kind of bad feasance!”

– Merton Miller

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