
Justice Samuel Putnam, creator of the Prudent Man Rule. Image from page 56 of “History of Essex County, Massachusetts: with biographical sketches of many of its pioneers and prominent men” (1888)
I recently received this message from a client:
EJ, it was great talking to you yesterday. While doing a little reading last night I came across a quote I thought you might like. The Old Testament book of Proverbs was compiled by King Solomon who many consider to be the wisest person ever. So I looked this up and I think Ben Graham and Warren Buffet and Dick Young are in good company, at least philosophically. The quote is from the book of Proverbs chapter 21 verse 5. “Steady plodding brings prosperity; hasty speculation brings poverty .“ Sounds like Solomon would have made a great financial adviser like the aforementioned men. Now I need a quote on how to handle a Pandemic and a contentious election and an anxious wife in a darkening Winter. I may not need Solomon just a little more Basil Hayden (bourbon). Take Care and Thanks.
In the September 2015 issue of Richard C. Young’s Intelligence Report, Dick Young wrote:
The Prudent Man Rule is based on common law stemming from the 1830 Massachusetts court formulation Harvard College v. Amory. The Prudent Man Rule directs trustees “to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital invested.”
Since I started our family investment management firm in 1989, I have operated under the assumption that the Prudent Man Rule to this day carries as much weight as it did in 1830. Common sense and prudence just don’t go out of style—ever.
E.J. Smith - Your Survival Guy
Latest posts by E.J. Smith - Your Survival Guy (see all)
- Survive and Thrive June 2023: Your Survival Guy in Rome 30-Years A.B. (After Babson) - May 30, 2023
- Happy Memorial Day: Your Survival Guy: Proud To Be an American - May 29, 2023
- Your Survival Guy in Rome 30-Years A.B. (After Babson) - May 26, 2023
- Insurers Now Fleeing the Net Zero Insurance Alliance - May 26, 2023
- A Three-Week International Research Trip to Paris via Rome - May 25, 2023