Reminiscences of a Stock Operator quotes

You can spot, for instance, where the buying is only a trifle better than the selling. A battle goes on in the stock market and the tape is your telescope. You can depend upon it seven out of ten cases.

Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills.

Whatever happens in the stock market to-day has happened before and will happen again. I’ve never forgotten that. I suppose I really manage to remember when and how it happened. The fact that I remember that way is my way of capitalizing experience.

Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills.

Whatever happens in the stock market to-day has happened before and will happen again.

I’ve never forgotten that. I suppose I really manage to remember when and how it happened. The fact that I remember that way is my way of capitalizing experience.

The reason for what a certain stock does to-day may not be known for two or three days, or weeks, or months. But what the dickens does that matter?

Your business with the tape is now—not to-morrow. The reason can wait.

But you must act instantly or be left. Time and again I see this happen. You’ll remember that Hollow Tube went down three points the other day while the rest of the market rallied sharply. That was the fact.

She didn’t quite believe it was real money. She used to worry and fret about it. But I didn’t think of anything except that I could keep on proving my figuring was right.

That’s all the fun there is—being right by using your head.

If I was right when I tested my convictions with ten shares I would be ten times more right if I traded in a hundred shares. That is all that having more margin meant to me—I was right more emphatically. More courage? No! No difference!

If I was right when I tested my convictions with ten shares I would be ten times more right if I traded in a hundred shares. That is all that having more margin meant to me—I was right more emphatically. More courage? No! No difference!

If all I have is ten dollars and I risk it, I am much braver than when I risk a million, if I have another million salted away.

Anyhow, at fifteen I was making a good living out of the stock market. I began in the smaller bucket shops, where the man who traded in twenty shares at a clip was suspected of being John W. Gates in disguise or J. P.

There is a time for all things, but I didn’t know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class.

There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time.

No man can always have adequate reasons for buying or selling stocks daily—or sufficient knowledge to make his play an intelligent play.

And with my eyes wide open, to boot! And it wasn’t the only period of my life when I did it, either.

A stock operator has to fight a lot of expensive enemies within himself.

Anyhow, I came to New York with twenty-five hundred dollars. There were no bucket shops here that a fellow could trust. The Stock Exchange and the police between them had succeeded in closing them up pretty tight.

but I knew there wasn’t anything wrong with me; only with my play. I don’t know whether I make myself plain, but I never lose my temper over the stock market.

I never argue with the tape. Getting sore at the market doesn’t get you anywhere.

I was so anxious to resume trading that I didn’t lose a minute, but went to old man Fullerton and said to him, “Say, A. R., lend me five hundred dollars.”

It takes a man a long time to learn all the lessons of all his mistakes.

They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side.

It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock speculation.

He should. But that should not breed indecision. All my life I have made mistakes, but in losing money I have gained experience and accumulated a lot of valuable don’ts.

I have been flat broke several times, but my loss has never been a total loss.

Otherwise, I wouldn’t be here now. I always knew I would have another chance and that I would not make the same mistake a second time. I believed in myself.

That is why I don’t believe in tips. If I buy stocks on Smith’s tip I must sell those same stocks on Smith’s tip. I am depending on him. Suppose Smith is away on a holiday when the selling time comes around?

No, sir, nobody can make big money on what someone else tells him to do.

I know from experience that nobody can give me a tip or a series of tips that will make more money for me than my own judgment.

Both of these things came easy to me. I owe my early success as a trader to them and not to my brains or knowledge, because my mind was untrained and my ignorance was colossal.

The game taught me the game. And it didn’t spare the rod while teaching.

I remember my very first day in New York. I told you how the bucket shops, by refusing to take my business, drove me to seek a reputable commission house.

That the machine wasn’t as it ought to be, my eleven hundred vanished dollars plainly told me. But as long as the machinist was all right there was no need to stew.

Ignorance at twenty-two isn’t a structural defect.

After a few days I said to myself, “I can’t trade this way here. The ticker doesn’t help as it should!” But I let it go at that without getting down to bed rock.

Everything happened as I had foreseen. I was dead right and—I lost every cent I had! I was wiped out by something that was unusual.

If the unusual never happened there would be no difference in people and then there wouldn’t be any fun in life.

The game would become merely a matter of addition and subtraction. It would make of us a race of bookkeepers with plodding minds. It’s the guessing that develops a man’s brain power. Just consider what you have to do to guess right.

If the unusual never happened there would be no difference in people and then there wouldn’t be any fun in life. The game would become merely a matter of addition and subtraction. It would make of us a race of bookkeepers with plodding minds.

It’s the guessing that develops a man’s brain power.

Just consider what you have to do to guess right.

They always did that when I had taken no more than my usual line. I accused them of being short sports or worse, but they denied it and it ended by my going back to trading as usual.

The beauty of doing business with a crook is that he always forgives you for catching him, so long as you don’t stop doing business with him.

It’s all right as far as he is concerned. He is willing to meet you more than half-way. Magnanimous souls!

But I didn’t know why I had lost after my return from St. Louis or after the May ninth panic. I had theories—that is, remedies for some of the faults that I thought I found in my play. But I needed actual practice.

There is nothing like losing all you have in the world for teaching you what not to do.

And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!

If a stock doesn’t act right don’t touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going.

No diagnosis, no prognosis. No prognosis, no profit.

It is a very old thing, this of noting the behavior of a stock and studying its past performances. When I first came to New York there was a broker’s office where a Frenchman used to talk about his chart.

Why wasn’t I?

There was as much to learn from partial victory as from defeat.

For instance, I had been bullish from the very start of a bull market, and I had backed my opinion by buying stocks. An advance followed, as I had clearly foreseen. So far, all very well. But what else did I do?

for I often took profits and waited for a reaction that never came. And I saw my stock go kiting up ten points more and I sitting there with my four-point profit safe in my conservative pocket.

They say you never grow poor taking profits. No, you don’t. But neither do you grow rich taking a four-point profit in a bull market.

Where I should have made twenty thousand dollars I made two thousand. That was what my conservatism did for me.

The tyro knows nothing, and everybody, including himself, knows it. But the next, or second, grade thinks he knows a great deal and makes others feel that way too.

He is the experienced sucker, who has studied—not the market itself but a few remarks about the market made by a still higher grade of suckers.

The second-grade sucker knows how to keep from losing his money in some of the ways that get the raw beginner. It is this semisucker rather than the 100 per cent article who is the real all-the-year-round support of the commission houses.

It is naturally the semisucker who is always quoting the famous trading aphorisms and the various rules of the game.

He knows all the don’ts that ever fell from the oracular lips of the old stagers—excepting the principal one, which is: Don’t be a sucker!

This semisucker is the type that thinks he has cut his wisdom teeth because he loves to buy on declines. He waits for them. He measures his bargains by the number of points it has sold off from the top.

And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this:

It never was my thinking that made the big money for me. It was always my sitting.

Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets.

And their experience invariably matched mine—that is, they made no real money out of it.

Men who can both be right and sit tight are uncommon.

I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money.

That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money.

The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.

Old Turkey was dead right in doing and saving what he did. He had not only the courage of his convictions but the intelligent patience to sit tight.

the beginning of a reversal of general conditions. You have to use your brains and your vision to do this; otherwise my advice would be as idiotic as to tell you to buy cheap and sell dear.

One of the most helpful things that anybody can learn is to give up trying to catch the last eighth—or the first. These two are the most expensive eighths in the world.

They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent.

I knew that if I did I might lose my position and with it the certainty of a big killing.

It is the big swing that makes the big money for you.

If I learned all this so slowly it was because I learned by my mistakes, and some time always elapses between making a mistake and realizing it, and more time between realizing it and exactly determining it.

I speak in a general sense. But the average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell.

He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.

It is too much bother to have to count the money that he picks up from the ground.

I also was better equipped than the average customer of Harding Brothers in that I was utterly free from speculative prejudices. The bear side doesn’t appeal to me any more than the bull side, or vice versa.

My one steadfast prejudice is against being wrong.

Even as a lad I always got my own meanings out of such facts as I observed. It is the only way in which the meaning reaches me. I cannot get out of facts what somebody tells me to get.

But you find many people, reputed to be intelligent, who are bullish because they have stocks. I do not allow my possessions—or my prepossessions either—to do any thinking for me. That is why I repeat that I never argue with the tape.

To be angry at the market because it unexpectedly or even illogically goes against you is like getting mad at your lungs because you have pneumonia.

I had been gradually approaching the full realization of how much more than tape reading there was to stock speculation.

I had made a mistake. But where? I was bearish in a bear market. That was wise. I had sold stocks short. That was proper. I had sold them too soon. That was costly.

My position was right but my play was wrong.

However, every day brought the market nearer to the inevitable smash. So I waited and when the rally began to falter and pause I let them have as much stock as my sadly diminished margins permitted.

I decided that I began too soon, but that I really couldn’t help it. Then the market began to sell off. That was my opportunity. I sold all I could, and then stocks rallied again, to quite a level.

There I was—right and busted!

I tell you it was remarkable. What happened was this: I looked ahead and saw a big pile of dollars. Out of it stuck a sign. It had “Help yourself,” on it, in huge letters.

All I could do was wait watchfully, as I should have done before plunging. It wasn’t a case of locking the stable after the horse was stolen. I simply had to be sure, the next time I tried.

If a man didn’t make mistakes he’d own the world in a month. But if he didn’t profit by his mistakes he wouldn’t own a blessed thing.

Well, sir, one fine morning I came downtown feeling cocksure once more. There wasn’t any doubt this time.

Sell ’em! Of course!

The public, with their eyes fixed on the stock market, saw little—that week. The wise stock operators saw much—that year.

That was the difference.

“Yes,” I answered. “First they sink to the bottom. Then they come up; but not right away.

They’ve got to be good and dead a couple of days. It isn’t time for these corpses to rise to the surface.

They are not quite dead yet.”

underlying conditions. They were helping me with all their might. Perhaps they were a trifle slow at times bringing up the reserves, but they were dependable, provided I did not get too impatient. I was not pitting my tape-reading knack or my hunches against chance.

The inexorable logic of events was making money for me.

The thing was to be right; to know it and to act accordingly. General conditions, my true allies, said “Down!” and Reading disregarded the command. It was an insult to us.

What happened shows you that I am right in never trading at limits. Suppose I had limited my selling price to 300? I’d never have got it off. No, sir!

When you want to get out, get out.

Now, my stock cost me about 300. They got off five hundred shares—full shares, of course—at 299¾. The next thousand they sold at 299⅝. Then a hundred at ½; two hundred at ⅜ and two hundred at ¼.

I was no longer betting blindly or concerned with mastering the technic of the game, but with earning my successes by hard study and clear thinking. I also found out that nobody was immune from the danger of making sucker plays.

And for a sucker play a man gets sucker pay; for the paymaster is on the job and never loses the pay envelope that is coming to you.

Our office made a great deal of money. My own operations were so successful that they began to be talked about and, of course, were greatly exaggerated. I was credited with starting the breaks in various stocks.

“Use them! That’s what reserves are for!” And the banks obeyed and invaded the reserves to the extent of about twenty million dollars. It saved the stock market. The bank panic didn’t come until the following week.

He was a man, J. P. Morgan was. They don’t come much bigger.

That was the day I remember most vividly of all the days of my life as a stock operator. It was the day when my winnings exceeded one million dollars. It marked the successful ending of my first deliberately planned trading campaign.

It marked the successful ending of my first deliberately planned trading campaign. What I had foreseen had come to pass. But more than all these things was this: a wild dream of mine had been realised.

I had been king for a day!

I’ll explain, of course.

Money does not give a trader more comfort, because, rich or poor, he can make mistakes and it is never comfortable to be wrong. And when a millionaire is right his money is merely one of his several servants.

Losing money is the least of my troubles. A loss never bothers me after I take it.

I forget it overnight. But being wrong—not taking the loss—that is what does the damage to the pocketbook and to the soul. You remember Dickson G. Watts’ story about the man who was so nervous that a friend asked him what was the matter.

And when a millionaire is right his money is merely one of his several servants. Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight.

But being wrong—not taking the loss—that is what does the damage to the pocketbook and to the soul.

You remember Dickson G. Watts’ story about the man who was so nervous that a friend asked him what was the matter.

He does not feel the difference much—that is, he does not vividly remember how it felt not to be a millionaire. He only remembers that there were things he could not do that he can do now.

It does not take a reasonably young and normal man very long to lose the habit of being poor. It requires a little longer to forget that he used to be rich.

I suppose that is because money creates needs or encourages their multiplication. I mean that after a man makes money in the stock market he very quickly loses the habit of not spending.

The one game of all games that really requires study before making a play is the one he goes into without his usual highly intelligent preliminary and precautionary doubts.

He will risk half his fortune in the stock market with less reflection than he devotes to the selection of a medium-priced automobile.

This matter of tape reading is not so complicated as it appears. Of course you need experience. But it is even more important to keep certain fundamentals in mind. To read the tape is not to have your fortune told.

up to 130 and down to 120. It may look very weak at the bottom; or, on the way up, after a rise of eight or ten points, it may look as strong as anything.

A man ought not to be led into trading by tokens.

He should wait until the tape tells him that the time is ripe. As a matter of fact, millions upon millions of dollars have been lost by men who bought stocks because they looked cheap or sold them because they looked dear.

The thing to do is to watch the market, read the tape to determine the limits of the get-nowhere prices, and make up your mind that you will not take an interest until the price breaks through the limit in either direction.

A speculator must concern himself with making money out of the market and not with insisting that the tape must agree with him.

Never argue with it or ask it for reasons or explanations. Stock-market post-mortems don’t pay dividends.

A speculator must concern himself with making money out of the market and not with insisting that the tape must agree with him. Never argue with it or ask it for reasons or explanations.

Stock-market post-mortems don’t pay dividends.

Not so long ago I was with a party of friends. They got to talking wheat. Some of them were bullish and others bearish. Finally they asked me what I thought. Well, I had been studying the market for some time.

After the real movement started, how long would it take me to make up the fifty thousand dollars I had dropped in order to make sure that I began to load up at exactly the right time? No time at all!

It always pays a man to be right at the right time.

As I think I also said before, this describes what I may call my system for placing my bets.

The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear.

In speculation when the market goes against you you hope that every day will be the last day—and you lose more than you should had you not listened to hope

—to the same ally that is so potent a success-bringer to empire builders and pioneers, big and little. And when the market goes your way you become fearful that the next day will take away your profit, and you get out—too soon.

Fear keeps you from making as much money as you ought to. The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses.

Instead of hoping he must fear; instead of fearing he must hope.

He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit. It is absolutely wrong to gamble in stocks the way the average man does.

It is all I have ever done. I think I know what I am talking about. And the conclusion that I have reached after nearly thirty years of constant trading, both on a shoestring and with millions of dollars back of me, is this:

A man may beat a stock or a group at a certain time, but no man living can beat the stock market!

A man may make money out of individual deals in cotton or grain, but no man can beat the cotton market or the grain market. It’s like the track. A man may beat a horse race, but he cannot beat horse racing.

A man may make money out of individual deals in cotton or grain, but no man can beat the cotton market or the grain market. It’s like the track.

A man may beat a horse race, but he cannot beat horse racing.

If I knew how to make these statements stronger or more emphatic I certainly would. It does not make any difference what anybody says to the contrary. I know I am right in saying these are incontrovertible statements.

A man can’t spend years at one thing and not acquire a habitual attitude towards it quite unlike that of the average beginner. The difference distinguishes the professional from the amateur.

It is the way a man looks at things that makes or loses money for him in the speculative markets.

The public has the dilettante’s point of view toward his own effort. The ego obtrudes itself unduly and the thinking therefore is not deep or exhaustive.

The public has the dilettante’s point of view toward his own effort. The ego obtrudes itself unduly and the thinking therefore is not deep or exhaustive.

The professional concerns himself with doing the right thing rather than with making money, knowing that the profit takes care of itself if the other things are attended to.

A trader gets to play the game as the professional billiard player does—that is, he looks far ahead instead of considering the particular shot before him. It gets to be an instinct to play for position.

It is always the play itself, the reason why. In the first place I wish to know my own limitations and habits of thought. Another reason is that I do not wish to make the same mistake a second time.

A man can excuse his mistakes only by capitalising them to his subsequent profit.

Well, having made a five-hundred dollar mistake but not yet having localised the trouble, I just looked at the fellow to size him up as a first step. I’ll be hanged if he didn’t actually smile at me—an understanding little smile!

“That’s too much!” I said.

Everybody knew that it was much harder to get into Mr. Morgan’s private office empty handed than into the White House with a parcel that ticked like an alarm clock.

But he declared, “I did.”

But he kept at it until I no longer felt sure of my own information as gathered from the trade papers and the dailies. That meant I couldn’t set the market with my own eyes.

A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse

, for that means that he cannot trade with confidence and comfort.

The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. It was an utterly foolish play, but all I can say in extenuation is that it wasn’t really my deal, but Thomas’.

Of all speculative blunders there are few greater than trying to average a losing game.

My cotton deal proved it to the hilt a little later. Always sell what shows you a loss and keep what shows you a profit.

Of all speculative blunders there are few greater than trying to average a losing game. My cotton deal proved it to the hilt a little later.

Always sell what shows you a loss and keep what shows you a profit.

That was so obviously the wise thing to do and was so well known to me that even now I marvel at myself for doing the reverse.

It has always seemed to me, however, that I might have learned my lesson quite as well if the cost had been only one million.

But Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill, knowing you have to pay it, no matter what the amount may be.

Having learned what folly I was capable of I closed that particular incident. Percy Thomas went out of my life.

A man has to have experience and he has to pay for it. But there was something that hurt a whole lot in that experience of mine in Dan Williamson’s office, and that was the loss of a great opportunity.

The money a man loses is nothing; he can make it up.

But opportunities such as I had then do not come every day.

It was proper for me as a man to act the way I did in Dan Williamson’s office, but it was improper and unwise for me as a speculator to allow myself to be influenced by any consideration to act against my own judgment.

Noblesse oblige—but not in the stock market, because the tape is not chivalrous and moreover does not reward loyalty.

I realise that I couldn’t have acted differently. I couldn’t make myself over just because I wished to trade in the stock market. But business is business always, and my business as a speculator is to back my own judgment always.

We ran smack into a long moneyless period; four mighty lean years. There was not a penny to be made. As Billy Henriquez once said,

“It was the kind of market in which not even a skunk could make a scent.”

It looked to me as though I was in Dutch with destiny. It might have been the plan of Providence to chasten me, but really I had not been filled with such pride as called for a fall.

A trader, in addition to studying basic conditions, remembering market precedents and keeping in mind the psychology of the outside public as well as the limitations of his brokers, must also know himself and provide against his own weaknesses.

There is no need to feel anger over being human.

I have come to feel that it is as necessary to know how to read myself as to know how to read the tape.

That the public did not turn all their paper profits into good hard cash or that they did not long keep what profits they actually took was merely history repeating itself.

Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street.

When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators to-day differ from yesterday. The game does not change and neither does human nature.

Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street. When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators to-day differ from yesterday.

The game does not change and neither does human nature.

I went along with the rise in 1916. I was as bullish as the next man, but of course I kept my eyes open. I knew, as everybody did, that there must be an end, and I was on the watch for warning signals.

That a bull market has added to my bank account or a bear market has been particularly generous I do not consider sufficient reason for sticking to the bull or the bear side after I receive the get-out warning.

A man does not swear eternal allegiance to either the bull or the bear side. His concern lies with being right.

And there is another thing to remember, and that is that a market does not culminate in one grand blaze of glory. Neither does it end with a sudden reversal of form.

But, as I have told you before, my experience of thirty years as a trader is that such accidents are usually along the line of least resistance on which I base my position in the market. Another thing to bear in mind is this:

Never try to sell at the top. It isn’t wise. Sell after a reaction if there is no rally.

I cleared about three million dollars in 1916 by being bullish as long as the bull market lasted and then by being bearish when the bear market started.

When I lose money by reason of some development which nobody could foresee I think no more vindictively of it than I do of an inconveniently timed storm.

Life itself from the cradle to the grave is a gamble

and what happens to me because I do not possess the gift of second sight I can bear undisturbed.

Sometimes I do not see the facts—all the facts—clearly enough or early enough; or else I do not reason logically. Whenever any of these things happen I lose. I am wrong. And it always costs me money to be wrong.

No reasonable man objects to paying for his mistakes.

There are no preferred creditors in mistake-making and no exceptions or exemptions. But I object to losing money when I am right. I do not mean, either, those deals that have cost me money because of sudden changes in the rules of some particular exchange.

Please bear in mind that I first became bullish on coffee while the price was practically at a pre-war level, and don’t forget that after I bought it I carried it the greater part of a year and then took a big loss on it.

The punishment for being wrong is to lose money. The reward for being right is to make money.

Being clearly right and carrying a big line, I was justified in expecting to make a killing. It would not take much of an advance to make my profit satisfactory to me, for I was carrying several hundred thousand bags.

Tips! How people want tips!

They crave not only to get them but to give them. There is greed involved, and vanity. It is very amusing, at times, to watch really intelligent people fish for them.

It has always seemed to me the height of damfoolishness to trade on tips. I suppose I am not built the way a tip-taker is.

I sometimes think that tip-takers are like drunkards.

There are some who can’t resist the craving and always look forward to those jags which they consider indispensable to their happiness. It is so easy to open your ears and let the tip in.

To be told precisely what to do to be happy in such a manner that you can easily obey is the next nicest thing to being happy—which is a mighty long first step toward the fulfilment of your heart’s desire.

It is not so much greed made blind by eagerness as it is hope bandaged by the unwillingness to do any thinking.

And it is not only among the outside public that you find inveterate tip-takers. The professional trader on the floor of the New York Stock Exchange is quite as bad.

“Why in Hades didn’t you tell me you meant him!” yelled the broker. “You cost me thirty-five hundred dollars!” He didn’t believe in family tips.

The farther away the source the purer the tip.

Old Westlake was a rich and successful banker and promoter. He ran across John W. Gates one day. Gates asked him what he knew. “If you will act on it I’ll give you a tip.

“I didn’t give you any tip,” said Westlake, frowning.

“Sure you did. And it was a Jim Hickey of a tip too. I made sixty thousand dollars.”

“Sure! Don’t you remember? You told me to sell Reading; so I bought it! I’ve always made money coppering your tips, Westlake,” said John W. Gates pleasantly. “Always!”

Old Westlake looked at the bluff Westerner and presently remarked admiringly,

“Gates, what a rich man I’d be if I had your brains!”

The other day I met Mr. W. A. Rogers, the famous cartoonist, whose Wall Street drawings brokers so greatly admire. His daily cartoons in the New York Herald for years gave pleasure to thousands. Well, he told me a story.

But Hood shook his head disapprovingly and said in all seriousness,

“We’ll never get another tip from him if you send that telegram!”

A professional trader actually said that. Now what’s the use of talking about sucker tip-takers? Men do not take tips because they are bally asses but because they like those hope cocktails I spoke of.

It is that he has diagnosed the case according to his observations of such cases during a period of many years; and, naturally, after he has diagnosed it, he can only treat it in the way that experience has taught him is the proper treatment.

You can transmit knowledge—that is, your particular collection of card-indexed facts—but not your experience.

A man may know what to do and lose money—if he doesn’t do it quickly enough.

With no buying power in the market, the price ought to go down. Thinking the way I did I must find whether I was right or not. As old Pat Hearne used to remark, “You can’t tell till you bet.”

Between being bearish and selling there is no need to waste time.

Experience has taught me that the way a market behaves is an excellent guide for an operator to follow. It is like taking a patient’s temperature and pulse or noting the colour of the eyeballs and the coating of the tongue.

Later on we learned—officially, as it were—that insiders had indeed been selling it, knowing full well that the condition of the company was not good. The reason, as usual, was disclosed after the break. But the warning came before the break.

I don’t look out for the breaks; I look out for the warnings.

I didn’t know what was the trouble with Chester; neither did I follow a hunch. I merely knew that something must be wrong.

The late Dickson G. Watts, ex-President of the New York Cotton Exchange and famous author of “Speculation as a Fine Art,” says that courage in a speculator is merely confidence to act on the decision of his mind.

With me, I cannot fear to be wrong because I never think I am wrong until I am proven wrong.

In fact, I am uncomfortable unless I am capitalising my experience. The course of the market at a given time does not necessarily prove me wrong.

I was not indebted to hunches or to skillful tape reading or to stubborn courage. It was a dividend declared by my faith in my judgment and not by my cleverness or by my vanity.

Knowledge is power and power need not fear lies—not even when the tape prints them.

The retraction follows pretty quickly.

It was a dividend declared by my faith in my judgment and not by my cleverness or by my vanity. Knowledge is power and power need not fear lies—not even when the tape prints them.

The retraction follows pretty quickly.

A year later, TT was jacked up again to 150 and hung around there for a couple of weeks. The entire market was entitled to a good reaction for it had risen uninterruptedly and it did not bull any longer.

On the other hand there is profit in studying the human factors—the ease with which human beings believe what it pleases them to believe; and how they allow themselves—indeed, urge themselves—to be influenced by their cupidity or by the dollar-cost of the average man’s carelessness.

Fear and hope remain the same; therefore the study of the psychology of speculators is as valuable as it ever was.

Weapons change, but strategy remains strategy, on the New York Stock Exchange as on the battlefield. I think the clearest summing up of the whole thing was expressed by Thomas F. Woodlock when he declared:

and how they allow themselves—indeed, urge themselves—to be influenced by their cupidity or by the dollar-cost of the average man’s carelessness. Fear and hope remain the same; therefore the study of the psychology of speculators is as valuable as it ever was.

Weapons change, but strategy remains strategy, on the New York Stock Exchange as on the battlefield.

I think the clearest summing up of the whole thing was expressed by Thomas F. Woodlock when he declared:

Weapons change, but strategy remains strategy, on the New York Stock Exchange as on the battlefield. I think the clearest summing up of the whole thing was expressed by Thomas F. Woodlock when he declared:

“The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past.”

In booms, which is when the public is in the market in the greatest numbers, there is never any need of subtlety, so there is no sense of wasting time discussing either manipulation or speculation during such times;

it would be like trying to find the difference in raindrops that are falling synchronously on the same roof across the street.

The sucker has always tried to get something for nothing, and the appeal in all booms is always frankly to the gambling instinct aroused by cupidity and spurred by a pervasive prosperity.

People who look for easy money invariably pay for the privilege of proving conclusively that it cannot be found on this sordid earth.

The sucker has always tried to get something for nothing, and the appeal in all booms is always frankly to the gambling instinct aroused by cupidity and spurred by a pervasive prosperity.

People who look for easy money invariably pay for the privilege of proving conclusively that it cannot be found on this sordid earth.

At first, when I listened to the accounts of old-time deals and devices I used to think that people were more gullible in the 1860’s and ’70’s than in the 1900’s.

and that made it too high to buy; and if it was too high to buy it was just right to sell. That sounds pretty modern, doesn’t it?

They were thinking of the price, and the Commodore was thinking of the value!

And so, for years afterwards, old-timers tell me that people used to say, “He went short of Harlem!” whenever they wished to describe abject poverty.

Huntington was always hard up because he always needed twenty or thirty millions more than the bankers were willing to lend him.

Vision without money means heartaches; with money, it means achievement; and that means power; and that means money; and that means achievement; and so on, over and over and over.

Of course manipulation was not confined to the great figures of those days. There were scores of minor manipulators. I remember a story an old broker told me about the manners and morals of the early ’60’s. He said:

Keene worked as he always did—that is, doing his big selling on the way down after the big rise. Of course his tactical moves were directed by his needs and by the minor currents that changed from day to day.

In the stock market, as in warfare, it is well to keep in mind the difference between strategy and tactics.

One of Keene’s confidential men—he is the best fly fisherman I know—told me only the other day that during the Amalgamated campaign Keene would find himself almost out of stock one day—that is, out of the stock he had been forced to take in marking …

He had in superlative degree the qualities of mind that are associated with successful speculators anywhere. That he did not argue with the tape is plain.

He was utterly fearless but never reckless.

He could and did turn in a twinkling, if he found he was wrong.

He would have been as successful in his undertakings in 1922 as he was in 1901 or in 1876, when he first came to New York from California and made nine million dollars in two years.

There are men whose gait is far quicker than the mob’s. They are bound to lead—no matter how much the mob changes.

As a matter of fact, the change is by no means as radical as you’d imagine. The rewards are not so great, for it is no longer pioneer work and therefore it is not pioneer’s pay.

The rewards are not so great, for it is no longer pioneer work and therefore it is not pioneer’s pay. But in certain respects manipulation is easier than it was; in other ways much harder than in Keene’s day.

There is no question that advertising is an art, and manipulation is the art of advertising through the medium of the tape.

The tape should tell the story the manipulator wishes its readers to see. The truer the story the more convincing it is bound to be, and the more convincing it is the better the advertising is.

and that also is exactly what I would do with that same stock if I did not happen to be manipulating it. The principal marketing of the stock, as you know, is done on the way down.

It is perfectly astonishing how much stock a man can get rid of on a decline.

I repeat that at no time during the manipulation do I forget to be a stock trader. My problems as a manipulator, after all, are the same that confront me as an operator.

My problems as a manipulator, after all, are the same that confront me as an operator. All manipulation comes to an end when the manipulator cannot make a stock do what he wants it to do.

When the stock you are manipulating doesn’t act as it should, quit. Don’t argue with the tape.

Do not seek to lure the profit back. Quit while the quitting is good—and cheap.

All manipulation comes to an end when the manipulator cannot make a stock do what he wants it to do. When the stock you are manipulating doesn’t act as it should, quit. Don’t argue with the tape. Do not seek to lure the profit back.

Quit while the quitting is good—and cheap.

The speculative appeal was absent, and from the investor’s point of view the price stability and dividend permanency of the stock were not yet demonstrated. It was a stock that never behaved sensationally.

It was so gentlemanly that no corroborative rise ever followed the insiders’ eminently truthful reports.

On the other hand, neither did the price decline.

the seller is too much at the mercy of the loaded-up inside clique. Similarly, there is no inducement to buy such a stock. To the investor Imperial Steel therefore remained a speculation.

To the speculator it was a dead one—the kind that makes an investor of you against your will by the simple expedient of falling into a trance the moment you go long of it.

The chap who is compelled to lug a corpse a year or two always loses more than the original cost of the deceased; he is sure to find himself tied up with it when some really good things come his way.

As a matter of fact, it was not much more likely that all the untrusteed stock would be thrown on the market at one fell swoop than that all the policyholders of a life-insurance company would die at the same hour, the same day.

There are unprinted actuarial tables of stock-market risks as well as of human mortality.

Having protected myself from some of the avoidable dangers of a stock-market deal of that sort, I was ready to begin my campaign. Its objective was to make my calls valuable.

Well, you would be surprised at the frequency with which some of our most successful promoters behave like peevish women because the market does not act the way they wish it to act.

They seem to take it as a personal slight, and they proceed to lose money by first losing their temper.

There has been much gossip about a disagreement between John Prentiss and myself. People have been led to expect a dramatic narrative of a stock-market deal that went wrong or some double-crossing that cost me—or him—millions; or something of that sort. Well, it wasn’t.

That is all tommyrot. I was not bearish because I was short of stocks. I was bearish because that was the way I sized up the situation, and I sold stocks short only after I turned bearish.

There never is much money in doing things wrong end to; not in the stock market.

My plan for selling the pool’s stock was based on what the experience of twenty years told me alone was feasible and therefore wise. Prentiss ought to have been enough of a trader to see it as plainly as I did.

That is why those outsiders who are wise enough not to buy at the top make up for it by not taking profits.

The big money in booms is always made first by the public—on paper. And it remains on paper.

Also there are belated promotions. The reason why promoters make that mistake is that being human they are unwilling to see the end of the boom. Moreover, it is good business to take chances when the possible profit is big enough.

The top is never in sight when the vision is vitiated by hope.

The average man sees a stock that nobody wanted at twelve dollars or fourteen dollars a share suddenly advance to thirty—which surely is the top—until it rises to fifty. That is absolutely the end of the rise. Then it goes to sixty; to seventy;

That was the crisis and they did not meet it as it should have been met. It shows you that every business has its own needs.

General wisdom is less valuable than specific savvy.

The promoters, delighted by the unexpected oversubscription, concluded that the public was ready to pay any price for any quantity of that stock. And they actually were stupid enough to underallot the stock.

As time went on the banks’ excesses in the matter of extensions of credits made people think. The day of the boy banker was over. The banking business appeared to be on the ragged edge of suddenly relapsing into conservatism.

Intimate friends were now asked to pay off loans, for all the world as though they had never played golf with the president.

There was no need to threaten on the lender’s part or to plead for more time on the borrower’s. The situation was highly uncomfortable for both. The bank, for example, with which my friend Jim Barnes did business, was still kindly disposed.

A girl who sat next to Josh and had not heard him use his mouth except for masticating purposes, turned to him and looking anxious to hear the great financier’s opinion asked him, “Oh, Mr. Wolff, what do you think of Balzac?”

Josh politely ceased to masticate, swallowed and answered, “I never trade in them Curb stocks!”

Such were the three largest individual holders of Consolidated Stove.

I had to protect myself. More than one promising deal has failed to pan out as expected because the members of the pool or clique failed to keep faith with one another.

Dog has no foolish prejudices against eating dog in Wall Street.

At the time the second American Steel and Wire Company was brought out the insiders accused one another of breach of faith and trying to unload. There had been a gentlemen’s agreement between John W.

It now proved less of a job than I had anticipated to put up the stock. After all, Governor Flower was right. Whenever he was accused of manipulating his firm’s specialties, like Chicago Gas, Federal Steel or B. R. T., he used to say: “

The only way I know of making a stock go up is to buy it.

” That also was the floor traders’ only way, and the price responded.

I did not put up the price to the highest possible point and then begin my real selling. I didn’t even do my principal selling on the way down, but on the way up.

It was like a dream of Paradise to find an adequate buying power created for you without your stirring a finger to bring it about, particularly when you were in a hurry.

I once heard a friend of Governor Flower’s say that in one of the great bull-leader’s operations for the account of a pool in B. R. T. the pool sold fifty thousand shares of the stock at a profit, but Flower & Co.

The only way to sell on such a market is to sell not necessarily recklessly but really regardless of price. No other way was possible, but I suppose they do not believe this. They are still angry. I am not.

Getting angry doesn’t get a man anywhere.

More than once it has been borne in on me that a speculator who loses his temper is a goner. In this case there was no aftermath to the grouches. But I’ll tell you something curious. One day Mrs.

Livingston: “I hope Mr. Livingston puts up Consolidated Stove soon. We have some that we bought because we were told he was going to put it up, and we’d always heard that he was very successful in all his deals.”

I tell you it isn’t pleasant to think that innocent people may have lost money following a tip of that sort.

Perhaps you understand why I never give any myself. That dressmaker made me feel that in the matter of grievances I had a real one against Wolff.

Speculation in stocks will never disappear. It isn’t desirable that it should.

It cannot be checked by warnings as to its dangers. You cannot prevent people from guessing wrong no matter how able or how experienced they may be. Carefully laid plans will miscarry because the unexpected and even the unexpectable will happen.

There are many thousands of people who buy and sell stocks speculatively but the number of those who speculate profitably is small. As the public always is “in” the market to some extent, it follows that there are losses by the public all the time.

The speculator’s deadly enemies are: Ignorance, greed, fear and hope.

All the statute books in the world and all the rules of all the Exchanges on earth cannot eliminate these from the human animal. Accidents which knock carefully conceived plans skyhigh also are beyond regulation by bodies of cold-blooded economists or warm-hearted philanthropists.

Did a leading banker really say that and if he said it why did he say it? Why does he not allow his name to be printed?

Is he afraid that people will believe him if he does?

Here is another one about a company the stock of which has been active this week. This time the man who makes the statement is a “prominent director.” Now which—if any—of the company’s dozen directors is doing the talking?

Quite apart from the intelligent study of speculation everywhere the trader in stocks must consider certain facts in connection with the game in Wall Street. In addition to trying to determine how to make money one must also try to keep from losing money.

It is almost as important to know what not to do as to know what should be done.

It is therefore well to remember that manipulation of some sort enters into practically all advances in individual stocks and that such advances are engineered by insiders with one object in view and one only and that is to sell at the best profit possible.

As this well-informed but unostentatious buying keeps on, the stock rises. The financial reporters, knowing that the insiders ought to know the reason for the rise, ask questions.

The unanimously anonymous insiders unanimously declare that they have no news to give out.

They do not know that there is any warrant for the rise. Sometimes they even state that they are not particularly concerned with the vagaries of the stock market or the actions of stock speculators.

The public ought to grasp firmly this one point: That the real reason for a protracted decline is never bear raiding.

When a stock keeps on going down you can bet there is something wrong with it, either with the market for it or with the company.

If the decline were unjustified the stock would soon sell below its real value and that would bring in buying that would check the decline.

If the decline were unjustified the stock would soon sell below its real value and that would bring in buying that would check the decline.

As a matter of fact, the only time a bear can make big money selling a stock is when that stock is too high.

And you can gamble your last cent on the certainty that insiders will not proclaim that fact to the world.