VOObyM

Reminiscences of a Stock Operator
run as far and as fast and as long as the impelling forces determine.
After Saratoga I began to see more clearly perhaps I should say more maturely that since
the entire list moves in accordance with the main current there was not so much need as
I had imagined to study individual plays or the behaviour of this or the other stock. Also,
by thinking of the swing a man was not limited in his trading. He could buy or sell the
entire list. In certain stocks a short line is dangerous after a man sells more than a certain
percentage of the capital stock, the amount depending upon how, where and by whom
the stock is held. But he could sell a million shares of the general list if he had the price
without the danger of being squeezed. A great deal of money used to be made
periodically by insiders in the old days out of the shorts and their carefully fostered fears
of corners and squeezes.
Obviously the thing to do was to be bullish in a bull market and bearish in a bear market.
Sounds silly, doesn't it? But I had to grasp that general principle firmly before I saw that
to put it into practice really meant to anticipate probabilities. It took me a long time to
learn to trade on those lines. But in justice to myself I must remind you that up to then I
had never had a big enough stake to speculate that way. A big swing will mean big
money if your line is big, and to be able to swing a big line you need a big balance at
your broker's.
I always had or felt that I had to make my daily bread out of the stock market. It
interfered with my efforts to increase the stake available for the more profitable but
slower and therefore more immediately expensive method of trading on swings.
But now not only did my confidence in myself grow stronger but my brokers ceased to
think of me as a sporadically lucky Boy Plunger. They had made a great deal out of me
in commissions, but now I was in a fair way to become their star customer and as such
to have a value beyond the actual volume of my trading. A customer who makes money
is an asset to any broker's office.
The moment I ceased to be satisfied with merely studying the tape I ceased to concern
myself exclusively with the daily fluctuations in specific stocks, and when that happened
I simply had to study the game from a different angle. I worked back from the quotation
to first principles; from price fluctuations to basic conditions.
Of course I had been reading the daily dope regularly for a long time. All traders do. But
- 74 -