Essentially, many of the stories we know about the Rothchilds are half truths or lies. These stories don’t break that pattern. Regardless, the underlying investing advice is darn good.
The Origin of the “Blood on the Streets” Contrarian Investing Quote
Nathan Mayer Rothschild, likely didn’t say the “blood on the streets” quote, and further the story of him making a fortune at Waterloo likely isn’t true. With that said, both stories are useful none-the-less, as both offer excellent investing advice.
“Buy when there’s blood in the streets, even if the blood is your own.” – It is very likely that Nathan Mayer Rothschild never said this.
NOTE: We will make the case below that everything one thinks they know about Nathan Mayer Rothschild is at best legend, but in a darker light… is essentially propaganda (those global elite banker types tend to be the subject of much propaganda historically, if you haven’t noticed).Buy When There’s Blood in the Streets.
FACT: Nathan’s relative Mayer Amschel Rothschild, a court Jew to the German royals in Frankfurt, can be considered the father of modern global finance and banking in many respects (see the history of banking). The range of conspiracy theories surrounding the Rothschild family, banking, and the Jewish people can sometimes detract from the important role the Rothchilds played in modern western history. If you dig into the history of banking and the Rothschild family, via a good book and not an Alex Jones, there is a bevy of interesting stories to be found… like the ones below. You’ll also find out the horrible secret painted as pure villainy time and time again, that is, banks often continue lending relationships with countries, even when those countries happen to be at war with each other (as they so often have been in history).
How to Understand the Blood on the Streets Quote
Nathan Mayer Rothchild rumored to have said, “Buy when there’s blood in the streets, even if the blood is your own.” The origin of the quote is uncertain, and thus it is likely not true that Rothchild himself said it, but that aside… its message is correct.
The meaning of the “blood on the streets” quote is this: One of the best times to buy into an investment is after a crash when everyone else is selling in a panic (and conversely one of the worst times is when everyone is manically buying).
The reasons for this are:
- If you buy low an the asset recovers, the result is that you bought in at a low price.
- If you buy high and the asset’s price drops, you lost money and have less money to buy again when the price is down.
- In a crash people tend to sell in a panic, and the lowest of prices can be far below the actual value of the asset.
The strategy is obviously risky, but of course, investing is risky in the first place.What Is Contrarian Investing?
TIP: Betting against everyone else, by “shorting a stock” or “waiting until their is blood on the streets” is inherently a rather antisocial investing strategy. If you are going to do it, try not to go around touting it. When you make big gains, it is likely that others have suffered losses.
TIP: This type of investing strategy is known as contrarian investing. Buffet, Soros, and more made got bits of their fortunes investing in what seemed like the worst of times. You can read more about that on Investopedia’s Buy When There’s Blood in the Streets.
Baron Rothschild and the Waterloo Legend
Speaking of uncertain things about this particular Baron Rothschild (there are many Baron Rothschilds and more than one Nathan), the other famous story about him is also arguably not true (but also full of useful, but again antisocial, investing advice).
The story goes that Nathan used early knowledge of victory at the Battle of Waterloo to speculate on the stock exchange and make a vast fortune (one of the places the Rothschild fortune is said to come from; although, again, the whole story is likely not true, so keep that in mind).
Regardless of if the quote or story is true, the message as noted above is a great way to convey contrarian investing advice.
When everyone is selling in a panic, that is the time to buy… now, causing the panic by offering up wrong information to the public (which is what Nathan is said to have done) is not something one would be advised to do (for a number of reasons). However, you should be on the lookout for others doing it. People often spread fake stories in order to “pump” and/or “dump” a stock to spur on a bull-run or crash.
“Buy Rentes,” advised Rothschild.
“But the streets of Paris are running with blood.”
“That is why you can buy Rentes so cheap.”
– Likely never said this either. This one likely originates with Thomas Gibson’s Market Letters for 1907.
TIP: See: The Rothschild Libel – Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed? Hint, the answer is again, you know, Shakespeare covered this with his Shylock character already. I’m not going to bother spelling it out for you.
“I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never sets. The man who controls the British money supply controls the British Empire, and I control the British money supply.”
– Another questionable-that-he-actually-said-it quote from Nathan Mayer Rothschild
TIP: When you watch the video below, remember, a lot of what we think we know about Nathan is often in part legend.Nathan Rothschild and the Battle of Waterloo.
TIP: The story of Nathan and Waterloo is full of holes. Like the quote, it tells us interesting investing advice and gives us a fun story, just likely not true. See reasons against the story and learn more about the story itself on Wikipedia’s page on “the Waterloo Legend.”