Franklin D. Roosevelt [CapiPedia]

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======Franklin D. Roosevelt======
Franklin Delano Roosevelt (FDR) was the 32nd President of the United States, serving from 1933 to 1945. While not an investor himself, his presidency stands as one of the most consequential in the history of American finance and, by extension, for every investor today. Taking office in the depths of the [[Great Depression]], FDR's administration unleashed a wave of reforms known as the [[New Deal]], fundamentally reshaping the relationship between government and the economy. For investors, his most enduring legacy is the creation of a robust regulatory framework designed to protect the public from the speculative excesses and outright fraud that led to the devastating stock market crash of 1929. These reforms, including the establishment of the [[SEC]] (Securities and Exchange Commission), introduced unprecedented transparency and accountability to financial markets. This foundation of reliable information and investor protection is the very bedrock upon which modern [[value investing]] is built, allowing investors to analyze companies with a degree of confidence that was unimaginable before his time.
===== The New Deal and the Birth of Modern Regulation =====
FDR's "first hundred days" in office saw a flurry of legislative activity aimed at stabilizing the collapsing American financial system. The goal was twofold: restore public confidence and prevent a similar catastrophe from ever happening again. This resulted in landmark legislation that every investor, whether they know it or not, benefits from to this day.
==== Key Legislative Pillars ====
The New Deal's financial architecture was built on several key pieces of legislation that created the "rules of the road" for modern markets:
  * **The [[Glass-Steagall Act]] (1933):** This monumental act separated commercial banking (which takes deposits) from investment banking (which underwrites and deals in securities). The logic was simple: banks shouldn't be gambling with depositors' money on risky stock market ventures. It also established the [[FDIC]] (Federal Deposit Insurance Corporation), which insures bank deposits and effectively ended the terrifying "bank runs" of the era.
  * **The [[Securities Act of 1933]]:** Often called the "truth in securities" law, this act tackled the primary market—the initial sale of stocks and bonds. It requires companies to register their securities with the SEC and provide investors with a detailed [[prospectus]] containing all material information about the business and the security being offered. It effectively told companies: //You can sell a bad investment, but you cannot lie about it.//
  * **The [[Securities Exchange Act of 1934]]:** This act addressed the secondary market, where securities are traded after their initial offering (think the New York Stock Exchange). It created the SEC to act as the ultimate watchdog of the markets, empowering it to regulate stock exchanges, brokers, and dealers to prevent fraud, manipulation, and [[insider trading]].
===== FDR's Legacy for the Value Investor =====
For a [[value investor]], whose craft depends on sober analysis and a long-term perspective, the Roosevelt era provides profound lessons and indispensable tools. The chaos of the 1920s and '30s, and the subsequent regulatory response, directly shaped the environment in which an investor like [[Benjamin Graham]] could develop and codify his principles.
==== A Foundation of Transparency and Safety ====
The single most important gift of the New Deal to the value investor is **information**. The SEC's mandate for regular, audited financial reporting (like the 10-K and 10-Q filings) provides the raw material for [[fundamental analysis]]. Without this reliable, standardized data, calculating a company's [[intrinsic value]] would be a speculative guessing game. FDR's reforms replaced a system of //caveat emptor// (let the buyer beware) with one where investors could, for the first time, reasonably trust the numbers. This shift created a playing field where diligence and analysis, rather than inside tips and rumors, could lead to success.
==== A Lesson in Crisis and Opportunity ====
The Great Depression itself offers a timeless lesson in market psychology. The panic that gripped the nation pushed the stock prices of excellent companies to absurdly low levels, far below their tangible worth. This is the very definition of the [[margin of safety]] that value investors seek. While FDR's policies were aimed at macroeconomic recovery, they ultimately helped restore the economic engine that allowed these undervalued companies to thrive once again. His presidency serves as a powerful reminder that periods of maximum pessimism often present the greatest opportunities for the disciplined investor who can tune out the noise, focus on the underlying value of a business, and act with courage when others are paralyzed by fear.