Editing Roger Babson (section)

== Work on financial theory ==
Babson's success as an investor was based on unorthodox views of the operation of markets. According to his biographer John Mulkern, Babson attributed the business cycle "to Sir [[Isaac Newton]]'s [[law of action and reaction]]... (with a) pseudoscientific notion that gravity can be used to explain movement in the stock markets." His market forecasting techniques are expounded in articles in ''Traders World Magazine'' and the [[Gravity Research Foundation]] he founded.<ref>[http://gravityresearchfoundation.org/pdf/awarded/2005/Jaenisch_Jaenisch_2005.pdf http://gravityresearchfoundation.org/pdf/awarded/2005/Jaenisch_Jaenisch_2005.pdf] {{webarchive|url=https://web.archive.org/web/20120711013936/http://gravityresearchfoundation.org/pdf/awarded/2005/Jaenisch_Jaenisch_2005.pdf |date=2012-07-11 }}</ref>

He graduated from MIT with a degree in engineering. As a college student, he lobbied the dean to include a business course, which resulted in a course known as "Business Engineering." Eventually, the business engineering program was expanded, and it is now seen as the forerunner of the [[Master of Business Administration|MBA]] degree.<ref>{{cite web|url=http://www3.babson.edu/Archives/research_publications/college_history.cfm|title=Continuity and Change: Babson College, 1919-1994|author=John Mulkern|publisher=Babson College Archives and Special Collections|year=1994|access-date=2006-09-25|archive-url=https://web.archive.org/web/20061011100944/http://www3.babson.edu/Archives/research_publications/college_history.cfm|archive-date=2006-10-11|url-status=dead}}</ref>

Babson authored more than 40 books on economic and social problems, the most widely read being ''Business Barometers'' (eight editions) and ''Business Barometers for Profits, Security, Income'' (10 editions). Babson also wrote hundreds of magazine articles and newspaper columns. He was a popular lecturer on business and financial trends.

Babson was an investor and sometimes director of many corporations, including some traded on the [[New York Stock Exchange]]. He established the investment advisory company ''Babson's Reports'', which published one of the first investment newsletters in the U.S.

=== Babson's Ten Commandments of Investing ===
Babson had "Ten Commandments" he followed in investing and encouraged his readers to do the same. These were:
# Keep speculation and investments separate.
# Don't be fooled by a name.
# Be wary of new promotions.
# Give due consideration to market ability.
# Don't buy without proper facts.
# Safeguard purchases through diversification.
# Don't try to diversify by buying different securities of the same company.
# Small companies should be carefully scrutinized.
# Buy adequate security, not super abundance.
# Choose your dealer and buy outright (don't buy on margin).<ref>{{cite book |first=Ken |last=Fisher |title=100 Minds That Made the Market |url=https://archive.org/details/mindsthatmademar00fish_311 |url-access=limited |publisher=Wiley |year=2007 |pages=[https://archive.org/details/mindsthatmademar00fish_311/page/n155 129]–132 |isbn=9780470139516 }}</ref>

===Forecast of Wall Street Crash===
On September 5, 1929, Babson gave a speech to the National Business Conference at Babson College, in which he proclaimed, "More people are borrowing and speculating today than ever in our history. Sooner or later a crash is coming, and it may be terrific". Speaking at a time when expectations of a continuing boom economy were high, Babson's prescient advice was "wise are those investors who now get out of debt and reef their sails. This does not mean selling all you have, but it does mean paying up your loans and avoiding margin speculation".<ref>{{cite book |first=John Kenneth |last=Galbraith |title=The Great Crash, 1929 |publisher=Houghton Mifflin Harcourt |year=1997 |page=[https://archive.org/details/greatcrash19290000galb/page/84 84] |isbn=0-395-85999-9 |url=https://archive.org/details/greatcrash19290000galb/page/84 }}</ref>

Later that day, the stock market declined by about 3%.<ref>{{Cite web|url=https://internationalman.com/articles/babsons-warning/|title=Babson's Warning|date=2014-09-15|website=International Man|language=en-US|access-date=2019-01-04}}</ref><ref>{{Cite web|url=https://www.newswise.com/articles/the-man-who-predicted-the-crash-of-29|title=The Man Who Predicted the Crash of "˜29|website=www.newswise.com|access-date=2019-01-04}}</ref> This became known as the "Babson Break." The [[Wall Street Crash of 1929]] and the [[Great Depression]] soon followed.

=== Role in development of Andrews Pitchfork ===
Babson learned to draw a nominal line through zigzagging market action on charts from [[George Fillmore Swain|George F. Swain]], a professor of engineering, when he worked with him, and he later taught this technique to Alan H. Andrews, who further refined it into "Andrews Pitchfork," a now-commonly used trendline indicator.<ref>{{cite web |url=http://www.marketmasters.com.au/74.0.html |author=Neil A. Costa |title=Dr. Alan H. Andrews - Market Master |url-status=dead |archive-url=https://web.archive.org/web/20140526000615/http://www.marketmasters.com.au/74.0.html |archive-date=2014-05-26 }}</ref>