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"The tape says they're buying it," I insisted.
Reminiscences of a Stock Operator
"Larry, I got heart disease when your orders began to come in. For the love of Mike,
don't be a sucker. Get out! Right away. It's liable to bust wide open any minute. I've
done my duty. Good-by!" And he hung up.
Ed Harding was a very clever chap, unusually well-informed and a real friend,
disinterested and kindhearted. And what was even more, I knew he was in position to
hear things. All I had to go by, in my purchases of UP., was my years of studying the
behaviour of stocks and my perception of certain symptoms which experience had
taught me usually accompanied a substantial rise. I don't know what happened to me,
but I suppose I must have concluded that my tape reading told me the stock was being
absorbed simply because very clever manipulation by the insiders made the tape tell a
story that wasn't true. Possibly I was impressed by the pains Ed Harding took to stop me
from making what he was so sure would be a colossal mistake on my part. Neither his
brains nor his motives were to be questioned. Whatever it was that made me decide to
follow his advice, I cannot tell you; but follow it, I did.
I sold out all my Union Pacific. Of course if it was unwise to be long of it it was equally
unwise not to be short of it. So after I got rid of my long stock I sold four thousand
shares short. I put out most of it around 162.
The next day the directors of the Union Pacific Company declared a 10 per cent
dividend on the stock. At first nobody in Wall Street believed it. It was too much like the
desperate maneuver of cornered gamblers. All the newspapers jumped on the directors.
But while the Wall Street talent hesitated to act the market boiled over. Union Pacific
led, and on huge transactions made a new high-record price. Some of the room traders
made fortunes in an hour and I remember later hearing about a rather dull-witted
specialist who made a mistake that put three hundred and fifty thousand dollars in his
pocket. He sold his seat the following week and became a gentleman farmer the
following month.
Of course I realised, the moment I heard the news of the declaration of that
unprecedented 10 per cent dividend, that I got what I deserved for disregarding the voice
of experience and listening to the voice of a tipster. My own convictions I had set aside
for the suspicions of a friend, simply because he was disinterested and as a rule knew
what he was doing.
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