"Buy low, sell high” is the mantra of making money on Wall Street, but when is it low enough to buy? According to one Wall Street proverb, the time to buy is when there is “blood in the streets.” The proverb has been attributed to financier Bernard Baruch and to industrialist John D. Rockefeller, Sr., but it’s most frequently attributed to Baron Rothschild.
During the Panic of 1871 in Paris, when everyone was selling, Baron Rothschild (according to the story) was buying. The Rothschild account is described in print in 1894, 1907, 1917 and 1931.
The term “Rothschild Moment” has been cited in print since at least 2006.
Wikipedia: Rothschild family
The Rothschild family (often referred to simply as the Rothschilds), is an international banking and finance dynasty of German Jewish origin that established operations across Europe, and was ennobled by the Austrian and British governments.
Elevated to the nobility
In 1816, four of the brothers were each ennobled by Austrian Emperor Francis I; Nathan was elevated in 1818. All of them were granted the Austrian title of baron or Freiherr on 29 September 1822. As such, some members of the family used “de” or “von” Rothschild to acknowledge the grant of nobility. In 1885, Nathan Mayer Rothschild II (1840–1915) of the London branch of the family, was granted the peerage title Baron Rothschild in the Peerage of the United Kingdom.
Rothschild family banking businesses pioneered international high finance during the industrialisation of Europe and were instrumental in supporting railway systems across the world and in complex government financing for projects such as the Suez Canal. Major businesses directly founded by Rothschild family capital include Alliance Assurance (1824) (now Royal & SunAlliance); Chemin de Fer du Nord (1845); Rio Tinto Group (1873); Société Le Nickel (1880) (now Eramet); and Imétal (1962) (now Imerys).
There are two branches of the family connected to France. The first was son James Mayer de Rothschild (1792–1868), known as “James”, who established de Rothschild Frères in Paris. Following the Napoleonic Wars, he played a major role in financing the construction of railroads and the mining business that helped make France an industrial power. James’ sons Gustave de Rothschild and Alphonse James de Rothschild continued the banking tradition and were responsible for raising the money to pay the compensation demanded by the occupying Prussian army in the 1870s Franco-Prussian War. Ensuing generations of the Paris Rothschild family remained involved in the family business, becoming a major force in international investment banking. The Rothschilds have led the Thomson Financial League Tables in Investment Banking Merger and Acquisition deals in the UK, France and Italy. In the United States, their Investment Banking Restructuring group has landed such deals as United Airlines and Delphi. The onslaught of competition from publicly traded banking giants from the United States and the European Union, who came with enormous capital at their disposal, resulted in the 2003 merger of the privately owned Rothschild banking house in France with its British banking cousins to create a single umbrella holding company.
The second French branch was founded by Nathaniel de Rothschild (1812–1870). Born in London he was the fourth child of the founder of the British branch of the family, Nathan Mayer Rothschild (1777–1836). In 1850, Nathaniel Rothschild moved to Paris, ostensibly to work with his uncle, James Mayer Rothschild. However, in 1853 Nathaniel acquired Château Brane Mouton, a vineyard in Pauillac in the Gironde département. Nathaniel Rothschild renamed the estate, Château Mouton Rothschild and it would become one of the best known labels in the world. In 1868, Nathaniel’s uncle, James Mayer de Rothschild acquired the neighboring Chateau Lafite vineyard.
1 January 1894, Chicago (IL) Daily Tribune, “Better Times Ahead” by H. Allaway, pg. 14 col 2
It is related that in the old days of the Commune in Paris a panic-stricken investor turned up in the office of M. de Rothschild and exclaimed:
“You advise me to buy securities now. You are my enemy. The streets of Paris run with blood.”
And Rothschild’s answer was this: “My dear friend, if the streets of Paris were not running with blood do you think you would be able to buy at the present prices?”
10 May 1907, Wall Street Journal, “In the Price,” pg. 1:
Baron Rothschild (if his memory will bear one more legend) once advised the purchase of French Rentes. “But,” exclaimed he to whom the advice was imparted, “the streets of Paris are running with blood.” To which the Baron calmly replied: “If the streets of Paris were not running with blood you could not buy Rentes at this price.”
26 December 1917, The Gas Record, pg. 402, col. 1:
BUY SECURITIES NOW
In 1871 when the Commune in Paris was at its height and the streets were red with blood, a young man called on the great banking firm of Rothschild to ask advice about a large fortune to which he had become heir. The head of the house told him to buy French Government Securities. “What, buy securities when the streets of Paris are running with blood!” was the young man’s surprised exclamation. Baron Rothschild is reported to have said: “My young friend, that is the very reason that today you can buy securities for 50 percent of their face value.” The young man invested his entire fortune on the advice of Rothschild and within three years it almost doubled. The moral of this, as W. B. Jackson very cleverly poitns out in the Electric Journal is that no one should be afraid to purchase good investment securities at their present price.
29 November 1931, New York (NY) Times, pg. RE4:
PROTECTING HIS INTERESTS
How Baron Rothschild Bought Paris Realty in Panic of 1871.
That this is the time to buy real estate when prices are low and discontent and uncertainty are in the air, recalls the story of one o the great Rothschild bankers who lived in 1871.
It is told of this Baron Rothschild that in the days following the defeat of France in the Franco-Prussian War, when the mod ruled Paris, that a friend went to him and said “What are you going to do to protect your interests in this dreadful hour?” The Baron said to him, “Can you keep a secret?” He said, “Yes,” and the Baron said, “Well, if the truth must be told, I am protecting myself by buying real estate.” His friend said, “Do you mean to say you are buying real estate with the gutters of Paris running with blood and the city in the hands of a mob?”
Rothschild said, “Yes, my friend, I mean that very thing, and that is the only time, when the gutters are running with blood, that you can buy real estate at 50 cents on the dollar.”
To substantiate the fact that there was a baron Rothschild in paris in 1871, genealogical records show that baron Rothschild (born in England in 1808) at the close of the Franco-Prussian War in , was the head of a group of financiers who guaranteed the maintenance of the foreign exchanges to facilitate the payment of the French indemnity.
17 August 1976, Columbus (NE) Telegram, “Gold stocks drop like lead balloon” by Donald G. Bauder, pg. 19, col. 3:
“Buy when blood runs in the streets,” said Mark Nobel, quoting a Rothschild.
12 September 1976, New York (NY) Times, “When Your Gold Has Turned to Dross” by Vartanig G. Vartan, pg. 118:
“The time to buy gold shares,” he (James Dines, an investment counselor—ed.) declares, “is when there is blood in the streets.”
15 December 1985, Miami (FL) Herald, “To buy, or not to buy?” by Robert J. Bruss, pg. 15H:
As Bernard Baruch said, “Buy when there’s blood in the streets.”
11 May 1986, New York (NY) Times, pg. F2:
“As Baron Rothschild once said, ‘buy when there’s blood in the streets,’” Mr. Hemingway observed.
9 December 1987, New York (NY) Times, “Market Place” by Anise C. Wallace, pg. D10:
Added another (fund manager—ed.): “They buy when there’s blood in the streets.”
BUY WHEN BLOOD IS RUNNING ON THE STREETS
AN INTERVIEW WITH MARK MOBIUS Manager of TEMPLETON EMERGING MARKETS FUND
By Mark Mobius
October 31, 1994
As one of the Rothschilds once said, you must buy when blood is running on the streets—even when it’s your own.
The Quotable Tycoon: An Irreverent Collection of Brutally Honest and Inspirational Business Wisdom
By David Olive
Published by Sourcebooks, Inc.
The way to make money is to buy when blood is running in the streets.
JOHN D. ROCKEFELLER, SR.
U.S. oilman and co-founder in 1862 of the predecessor company to Standard Oil.
New York City • Banking/Finance/Insurance • Tuesday, September 30, 2008 • Permalink