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Reminiscences of a Stock Operator
As soon as I saw Union Pacific making new high records I said to myself, "This is no
stock for me to be short of."
All I had in the world was up as margin in Harding's office. I was neither cheered nor
made stubborn by the knowledge of that fact. What was plain was that I had read the
tape accurately and that I had been a ninny to let Ed Harding shake my own resolution.
There was no sense in recriminations, because I had no time to lose; and besides, what's
done is done. So I gave an order to take in my shorts. The stock was around 165 when I
sent in that order to buy in the four thousand UP. at the market. I had a three-point loss
on it at that figure. Well, my brokers paid 172 and 174 for some of it before they were
through. I found when I got my reports that Ed Harding's kindly intentioned interference
cost me forty thousand dollars. A low price for a man to pay for not having the courage
of his own convictions! It was a cheap lesson.
I wasn't worried, because the tape said still higher prices. It was an unusual move and
there were no precedents for the action of the directors, but I did this time what I thought
I ought to do. As soon as I had given the first order to buy four thousand shares to cover
my shorts I decided to profit by what the tape indicated and so I went along. I bought
four thousand shares and held that stock until the next morning. Then I got out. I not
only made up the forty thousand dollars I had lost but about fifteen thousand besides. If
Ed Harding hadn't tried to save me money I'd have made a killing. But he did me a very
great service, for it was the lesson of that episode that, I firmly believe, completed my
education as a trader.
It was not that all I needed to learn was not to lake tips but follow my own inclination. It
was that I gained confidence in myself and I was able finally to shake off the old method
of trading. That Saratoga experience was my last haphazard, hit-or-miss operation. From
then on I began to think of basic conditions instead of individual stocks. I promoted
myself to a higher grade in the hard school of speculation. It was a long and difficult
step to take.
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