Roger Ward Babson (1875–1967) statistician and stock market analyst

Babson was born into a well-established New England family. His father was a successful dry-goods merchant who did not believe in the principles of higher education. He was undisciplined as a youth and was a member of a street gang for a brief period before obtaining his high school diploma. He then attended MIT because it provided a “technical education,” which was more acceptable. After graduating in 1898, he went to work for a Boston stockbroker. He was soon fired for his overly analytical methods and independent spirit. After working for himself briefly in New York City, he returned to Massachusetts to work for another Boston broker. He then established Babson’s Statistics Organization with $1,200 in 1904. The company was later known as Babson’s Reports. The original company was one of the first to accumulate and analyze business statistics and sell the service to subscribers. It was so successful that he was able to diversify his interests after several years in business.

Following the Panic of 1907 on Wall Street, Babson, already wealthy because of his service’s success, expanded it to include stock market reporting and advice. The service included business and stock market predictions and made Babson very well known in investment circles. He was one of the few market analysts to accurately predict the stock market crash of 1929 although many on Wall Street did not agree. In the 1920s, statistical analysis was not universally accepted. Many Wall Street bankers did not accept that business conditions were anything less than ideal before the crash and continued to believe in a rosy future even after 1929.

In addition to his analytical services, Babson was also interested in public service. He served in Woodrow Wilson’s administration as an assistant secretary of labor and advocated joining the League of Nations. Later in life, he ran for president on the National Prohibition Party ticket in 1940. But he was best known for his stock market services. In addition to his service, Babson also wrote on financial matters in regularly scheduled articles. From 1910 to 1923, he wrote about business and other matters as a regular columnist for the Saturday Evening Post. He also contributed to the New York Times and to the newspapers owned by the Scripps Syndicate. He eventually formed his own syndicate, the Publishers Financial Bureau, to distribute his writings to papers across the United States. His reputation was enhanced in the late 1920s when he began predicting a strong stock market reaction to the speculative bubble. After the crash, his reputation grew, and he became one of the most sought-after market analysts.

During his lifetime, Babson authored 47 books, including his autobiography, Actions and Reactions. His writings covered a wide array of social and economic topics in addition to his statistical and forecasting work. He founded Babson Institute (today Babson College) in Massachusetts in 1919 and was also instrumental in establishing Webber College for Women in Florida, in part because of his wife’s support for women’s education. His success opened the field to a wide array of newsletters and market analyses that created an industry of information services surrounding Wall Street and business cycles.