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 serves as a senior vice president for IFA Institutional where he specializes in providing advisory services to institutional plans, such as endowments, foundations, pension plans, various corporate plans, and select high net worth individuals. In this role, he leverages nearly fifteen years of experience serving as both a non-discretionary investment consultant and discretionary advisor.

Mark is also the author of the award-winning book, Investing in U.S. Financial History: Understanding the Past to Forecast the Future. The book recounts the financial history of the United States, beginning with the innovative financial programs of Alexander Hamilton in 1790 and ending with the Federal Reserve’s ongoing battle to contain inflation. In March 2024, Investing in U.S. Financial History was awarded a bronze medal in the prestigious 2024 Axiom Book Awards under the category of “Personal Finance/Retirement Planning/Investing.” In October 2024, Investing in U.S. Financial History won the best book in "Finance" at the New York City Big Book Awards and the best book in Business: Personal Finance/Investing at the American Book Fest's Best Book Awards.

Mark is a member of the Editorial Board of the Museum of American Finance, and he is a frequent writer for the Museum’s Financial History magazine. Insights from his writing and experiences as a consultant to institutional investment plans have been quoted by journalists at CNBC, the Wall Street Journal, Business Insider, Morningstar, and many other financial publications throughout the world.

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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