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Reminiscences of a Stock Operator
Chapter XXIII
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. Disaster may come from
a convulsion of nature or from the weather, from your own greed or from some man's
vanity; from fear or from uncontrolled hope. But apart from what one might call his
natural foes, a speculator in stocks has to contend with certain practices or abuses that
are indefensible morally as well as commercially.
As I look back and consider what were the common practices twenty-five years ago
when I first came to Wall Street, I have to admit that there have been many changes for
the better. The old-fashioned bucket shops are gone, though bucketeering "brokerage"
houses still prosper at the expense of men and women who persist in playing the game
of getting rich quick. The Stock Exchange is doing excellent work not only in getting
after these out-and-out swindlers but in insisting upon strict adherence to its rules by its
own members. Many wholesome regulations and restrictions are now strictly enforced
but there is still room for improvement. The ingrained conservatism of Wall Street rather
than ethical callousness is to blame for the persistence of certain abuses.
Difficult as profitable stock speculation always has been it is becoming even more
difficult every day. It was not so long ago when a real trader could have a good working
knowledge of practically every stock on the list. In 1901, when J. P. Morgan brought out
the United States Steel Corporation, which was merely a consolidation of lesser
consolidations most of which were less than two years old, the Stock Exchange had 275
stocks on its list and about 100 in its "unlisted department" ; and this included a lot that a
chap didn't have to know anything about because they were small issues, or inactive by
reason of being minority or guaranteed stocks and therefore lacking in speculative
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