Laszlo Birinyi, an investor who declared that he took little interest in corporate news, financial algorithms and even the economy itself, and who instead “listened” to the market, as he put it, developing a theory about the flow of money that made him one of the nation’s foremost stock pickers in the 1990s, died on Aug. 21 at his home in Southport, Conn. He was 79.
His wife, Jill Costelloe Birinyi, said the cause was chronic heart failure.
Mr. Birinyi (pronounced BUH-ree-nee), a former equities analyst at Salomon Brothers who founded his own money management firm in Westport, Conn., argued that the market had not only a history but also a “psychology,” and he used this insight as the basis for his market predictions.
The public began to sense that Mr. Birinyi was onto something in the 1990s. As a frequent guest of “Wall Street Week,” a popular show on PBS (and, briefly, CNBC) hosted by Louis Rukeyser, Mr. Birinyi again and again won an annual stock-picking competition among panelists.
From 1993 to 1998, his average annual return was 44 percent, against a 19.8 percent average annual rise by the Dow Jones industrials. His gain in 1997 was a whopping 74 percent.
“Born in Hungary, raised in Pennsylvania, he regularly makes a goulash of most other market analysts,” Mr. Rukeyser said while inducting Mr. Birinyi into the show’s Hall of Fame in 1999. “He has become Wall Street’s No. 1 number cruncher and, quite simply, the single best securities analyst operating in the 1990s.”
On the show, Mr. Birinyi had the nasal, high-pitched voice, round wire spectacles and self-assured tone of an archetypal financial whiz. He did not always deliver his predictions in layman’s English, but the genial Mr. Rukeyser was there for attentive follow-up questions and on-the-spot jargon translation.
After “Wall Street Week” went off the air in 2003, news outlets, including The New York Times, continued to consult Mr. Birinyi as a financial expert. He foresaw the bull market that began in 2009 during the financial crisis and presciently advised investors to stick with the market during the severe downtown of August 2015.
Yet some view the very idea of market prognostication with skepticism. In 2011, after Mr. Birinyi predicted that the S&P 500 would increase to 2,854 points by late summer 2013, Larry Swedroe, a wealth manager and financial writer, used him as a case study of why to be wary of financial forecasting.
Mr. Birinyi had been wildly off about how the same market index would perform from the end of 2000 to the end of 2001, Mr. Swedroe wrote in a column for the website CBS Moneywatch. And, in fact, Mr. Birinyi’s prediction about summer 2013 turned out to be off the mark by more than 1,000 points.
Mr. Birinyi founded his firm, Birinyi Associates, when he left Salomon Brothers in 1989. Today, the firm manages about $340 million, mainly from wealthy individuals, according to Jeffrey Yale Rubin, who became the firm’s president following Mr. Birinyi’s death.
In 2020, the Securities and Exchange Commission found that the firm unfairly advantaged a small group of clients focused on day trading against those pursuing longer-term investment strategies. Without admitting or denying the charges, Birinyi Associates agreed to pay a civil penalty of $100,000 and to retain an independent compliance consultant.
Mr. Birinyi often distilled his philosophy of the market in the phrase “follow the money.” He developed a system for determining whether a stock trade was initiated by buyers or sellers. That enabled him to go beyond the stock price, pinpointing investor interest and seeing whether money was likely to flow into or out of a stock.
“I try and see where savvy investors are putting their money,” he told The Times in 1998.
His study of market history taught him, he said, that long bull markets have four stages: reluctance, consolidation, grudging acceptance and exuberance. This last period is marked by fearless behavior, the entry into the market of unskilled day traders and, ominously, the likelihood of a coming crash.
This led Mr. Birinyi to the paradoxical conclusion that gloomy commentary by market watchers was actually encouraging — before the exuberance stage had taken hold — whereas sunny market reports signified danger.
“So you won’t think the market is going down till everybody thinks it’s going up,” Mr. Rukeyser remarked to Mr. Birinyi on an episode of “Wall Street Week” in 1996.
“Exactly right,” Mr. Birinyi said.
“Does this contempt for your colleagues ever bother you when you’re going to bed at night?” Mr. Rukeyser asked.
Mr. Birinyi was ready to follow his philosophy to any conclusion it led to; and in this case, the reluctance or grudging acceptance of others was a happy sign for his bull market.
“Most people,” he replied, “just aren’t accepting the good news.”
Laszlo Birinyi Jr. was born on Sept. 20, 1943, in Karcag, a town in eastern Hungary. His father was a railway station master, and his mother, Margit (Kontes) Birinyi, was a homemaker.
She knew enough English to write letters seeking sponsorship for the family to move to the United States after World War II. They had made a home in Lancaster, Pa., where Mr. Birinyi Sr. worked at a local factory.
Laszlo graduated from the University of North Carolina at Chapel Hill in 1967 with a bachelor’s degree in history. In the early 1970s, he worked at several financial firms as a computer programmer and at night studied at New York University for a master’s degree in business, which he received in 1975.
He began working at Salomon Brothers, then a leading brokerage firm, the next year. Mr. Birinyi rose to lead its equity market analysis group, developing detailed research on stock trading patterns and writing a weekly market commentary.
“His analysis of market data was virtually unique on Wall Street,” The Times wrote in 1989, after he resigned from Salomon Brothers.
Mr. Birinyi’s first marriage ended in divorce. He married Jill Costelloe in 1986. In addition to his wife, he is survived by their two daughters, Natalie Birinyi and Anna Danzer; a brother, Frank; and a grandson.
He continued writing market reports and reviewing his investment portfolios until the last week of his life.
In “The Heretics of Finance,” a 2009 book of interviews by Andrew W. Lo and Jasmina Hasanhodzic, Mr. Birinyi described the experience of visiting one of his daughters at what he called her “posh nursery school in Manhattan” for Father’s Day. He spent 20 minutes on his hands and knees playing with her. Then he stood up and realized that he and the other dads all wanted to do the same thing — talk about the stock market.
“For the really successful traders,” he said, “not the technicians, but the real traders, the real portfolio pros — the business is what they eat, sleep and breathe.”