Arnold Bernhard

Arnold Bernhard

American businessman, founder and chief executive officer of 'Value Line Inc.'
Date of Birth: 02.12.1901
Country: USA

  1. Arnold Bernhard: Founder of Value Line Inc.
  2. The Birth and Early Life of Arnold Bernhard
  3. The Success of Value Line Inc.
  4. The Later Years and Legacy of Arnold Bernhard

Arnold Bernhard: Founder of Value Line Inc.

Arnold Bernhard was an American businessman and founder of Value Line Inc., the world's largest investment advisory company. He was included in Forbes' list of the 400 richest Americans. Bernhard believed that the market was heavily influenced by its past and future, and he built his own financial success on this idea. For over five decades, he led the company he created and oversaw the publication of the Value Line Investment Survey, a weekly report providing information on the predicted market performance of 1700 stocks. This computerized system, primarily based on a company's market history and potential, attracted over 134,000 subscribers who were willing to pay $495 annually for access to this review. His innovations in market forecasting challenged other Wall Street brokerage firms that relied on more traditional techniques. His approach also contradicted the efficient market hypothesis, which states that important information is rapidly reflected in the market value of securities, making long-term perspectives futile.

The Birth and Early Life of Arnold Bernhard

Arnold Bernhard was born on December 2, 1901, in New York City. His parents were immigrants, with his father coming from Germany and his mother from Romania. Bernhard attended Stuyvesant High School, where he was considered a highly talented student. However, he did not complete his education, disregarding school requirements. Nonetheless, his high grades allowed him to attend Williams College, where he graduated with honors and became a member of the Phi Beta Kappa fraternity. After college, Bernhard worked as a theater critic for Time magazine and wrote a play that was never produced. Despite this, he funded numerous Broadway productions later on when he achieved wealth. Bernhard worked for legendary stock market speculator Jesse Livermore for some time before joining Moody's Investors Service as an analyst and responsible broker. However, he lost his job in 1931 due to the Great Depression. That same year, he founded his own company, Arnold Bernhard & Company, as some former clients asked him to continue managing their money. Today, Value Line serves as an investment consultant for 14 mutual funds and manages the assets of pension funds and other clients totaling around $7 billion.

The Success of Value Line Inc.

From the very beginning, with the first publication of the investment survey in 1936, printed using a mimeograph machine, Bernhard aimed to develop an evaluation method for stock prices that would eliminate excessive emotional bias. This approach stemmed from his personal experience, as his mother lost all the remaining money from his father's insurance in 1929. Bernhard advised her to sell immediately, but she refused, hoping for a better outcome. In the end, the stock prices dropped from $50 to $2 per share. Initially, Bernhard used separate mathematical equations for each company, but in the mid-1960s, working with Samuel Eisenstadt, his chief statistician, he devised a way to apply a single formula to a range of stocks. The success of his calculations made the Value Line Investment Survey an integral part of the financial world, despite not being entirely immune to errors, the most significant of which concerned oil market prospects in 1981. Despite its strict corporate discipline, Bernhard's company became a launching pad for hundreds of excellent analysts, financial managers, and brokers. Former employees of the company hold special meetings and gatherings, similar to reunions of prestigious university graduates. However, Bernhard himself was never invited to these events, as he was not known for his sociability. In April 1985, it was announced that upon Bernhard's retirement, the management of Value Line Inc. would be passed on to his daughter, Jean Bernhard Buttner, who became the president and chief operating officer of the company. Her twin brother, Arnold Van Hoven Bernhard, worked in the company for some time but did not participate in its management.

The Later Years and Legacy of Arnold Bernhard

In his later years, Bernhard lived in Manhattan and his home in Westport, Connecticut. On December 22, 1987, at the age of 86, Arnold Bernhard passed away at the Columbia Presbyterian Medical Center. He was survived by his wife, Janet Marie Kinghorn, his daughter, son, and five grandchildren. Bernhard left behind a lasting legacy in the financial industry, with Value Line Inc. continuing to thrive and provide valuable investment advice to clients worldwide.