Defying the odds: The journey and wisdom of Wall Street’s First Lady

Defying the odds: The journey and wisdom of Wall Street’s First Lady

Resolute, fearless and gutsy were some of the special qualities prerequisite for women to survive in the all-male bastion of Wall Street in the 1960s.

This Wall Street pioneer not only survived that challenge, but also became a role model for other women for the way she lived her life and made a name for herself on Wall Street.

Known as the First Lady of Wall Street, stockbroker Muriel Siebert earned her place and respect among other Wall Street legends and made history in 1967 when she became the first woman to own a seat on the New York Stock Exchange.

Siebert was known not only for her skill in picking stocks that turned into winners, but also for the company she built from scratch, turned into one of the US’s best known discount stock broking firms.

Throughout her career, Siebert took many risks and was known for being fearless, outspoken, smart and determined. She was the only female trader among 1,300-plus male traders on Wall Street for more than a decade, and was the first woman to own a discount brokerage firm. She later launched initiatives to help women understand and take control of their finances.

Although she did not have a college degree, Siebert was the first woman to become the superintendent of banking for New York state.

Early days

Siebert attended business classes at the Western Reserve University and was often the only girl in her class. She often visited the New York Stock Exchange and was determined to work there one day. Unfortunately, her father was diagnosed with cancer in 1952, and she had to leave school early.

Despite many setbacks in her life, she was able to achieve her dream of working on Wall Street at a time when the only women allowed on Wall Street were secretaries and support staff.

How she became a member of NYSE

Siebert was very disturbed about the way women were treated in the financial world when she was an entry-level research analyst, and felt women deserved the same respect as men. Her investor friend Gerald Tsai advised her to buy a seat on the New York Stock Exchange and become a part of the system to change everyone’s perspective towards women.

Although it was a daunting task, she managed to convince an investor after getting rejected by many to sponsor her application to buy a seat on NYSE.

Then with great difficulty she received a loan from Chase Manhattan Bank after two years to buy a seat and on December 28, 1967, she became the first woman member of the New York Stock Exchange.

She always believed in giving back to the community and made many generous contributions through the Siebert Entrepreneurial Philanthropic Plan to charities and did a lot to encourage women to actively enter the financial world.

She also ran a famous campaign where she got a ladies washroom installed on the seventh floor of the New York Stock Exchange, because there was no toilet for women during most of her time there.

Siebert died of cancer on August 24, 2013. The New York Stock Exchange named a room after her, called Siebert Hall, to honour her. This was the first time a room was named after a person on the stock exchange.

In 2002, Siebert published her autobiography Changing the Rules: Adventures of a Wall Street Maverick, where she described her experiences and adventures of Wall Street and also offered young investors tips to survive in the investment world.

Here are some of the tips that she shared in her book for investors, many of which are relevant to this day.

1. Understand risk

Siebert attributed her success to three four-letter words ending in ‘K’ which were-

She believed risk was the ability to study the information, assess liability and be brave enough to make a decision. “If you’re not willing to accept the worst that can happen, don’t do it. Recognizing the capacity for calculated risk is the key to success,” she once said in an interview.

Siebert was of the view that there were always inherent risks in investing. So she advised fellow investors to start buying stocks only when they had enough funds to do so.

She felt investors should prioritise saving funds for monthly expenses, debt and also some savings to cover emergencies and then only should they think of investing in stocks.

Further, she felt, one should allocate the money for investment which they do not need at least for next five years. She suggested investors to choose investments that reduced chances of the worst-case scenario of losing all the money.

Also, she felt investors should diversify portfolio by investing in a variety of companies in different industries or buying a broader collection of stocks through an exchange-traded fund or mutual fund.

Siebert believed putting all the money into a single stock was risky because then the investment would be dependent on only one company’s performance.

According to Siebert, younger investors should consider allocating a larger share of their portfolio (70 per cent or more) to equities rather than bonds. As they grow older and approach retirement, they can change that approach and bring down the allocation to stocks to cut down the risk.

2. Stay the course

Siebert believed investors should avoid the temptation of chasing hot stocks when their picks are underperforming on the basis of some attractive stock tips. She felt pursuing stock tips without deep and thorough research was more of gambling than investing.

Siebert felt it was best for investors to invest for the long term and ‘stay the course’ as investing in stocks required a stomach of steel in tough times and a telescope-like focus on the long term.

According to Siebert, investors who did not panic and rush for exit during tough times eventually got rewarded, as stocks with strong fundamentals did bounce back in due course.

“So I tell people, stick to your guns. You will make money eventually. There undoubtedly will be tough years during the course of your investment horizon, but a commitment to investing and a well-diversified strategy have consistently proven fruitful in the long term,” she said.

3. Know a lot about a little

Siebert believed that it was essential for investors to shortlist a few companies they were planning to invest in and conduct an in-depth research on them as it would help them pick the right stocks.

She felt it wasn’t necessary to focus on a large group of companies, instead one should pick up a select few and study them often from every possible angle.

She advised investors to talk to customers, suppliers and engineers and spend time with executives and keep up to date on all contracts, cancellations, slowdowns and bids.

She said investors should study everything there is to know about the management, production, suppliers, competition, research and labour conditions.

Investors should have that level of knowledge that if a company had a disappointing quarter, they could figure out whether it was a systemic problem in the organisation or something beyond its control, she said.

An investor should also have a keen business acumen so that when she interacts with the company staff and management, she can ask the right questions to benefit from informative answers, as it is obvious a company’s management may hold back information, she said

4. Analyzing the market is both art & science

According to Siebert, analysing the market could be considered both an art and science. While analysing the market, the financial data shows how a company fits into the economy, and that makes up the science part. But seeing a pattern in those numbers and then looking ahead is an art.

“While learning everything possible there is to know about a company, it is the numbers that eventually tell the story,” says she.

Siebert’s legacy goes beyond her professional achievements and deserves more than just a footnote in the history books. She’s regarded as a trailblazer who made investing more accessible for women everywhere.

In her own words, she explained her life motto as: “When you hit a closed door and it doesn’t budge, just rear back and kick it in, but hold it open so others can follow you.”

(Disclaimer: This article is based on Muriel Siebert’s various interviews and her book Changing the Rules: Adventures of a Wall Street Maverick )

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