Their son, Edwin, bore dual citizenship and was sent to the United States when he was a boy. He completed his education at Lehigh University , where he received training as a mining engineer. At the age of nineteen, however, he began his career as a journalist and eventually became a stockbroker, as well. In , he was appointed ambassador to Spain and Italy by his native country, Panama. He later returned to his home in Vermont where he resumed his literary work, providing short stories for magazines such as, The Saturday Evening Post , and writing novels.
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Whatever happens in the stock market to-day has happened before and will happen again. 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. They say there are two sides to 1- "Another lesson I learned early is that there is nothing new in Wall Street. 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. The game would become merely a matter of addition and subtraction.
It would make of us a race of bookkeepers with with plodding minds. Just consider what you have to do to guess right. 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! It always was 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. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.
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. It is the only way in which the meaning reaches me. I cannot get out of facts what somebody tells me to get. If I believe something you can be sure it is because I simply must. And after he makes them he will ask himself why he made them; and after thinking over it cold-bloodedly a long time after the pain of punishment is over he may learn how he came to make them, and when, and at what particular point of his trade; but not why.
And then he simply calls himself names and lets it go at that. Of course, if a man is both wise and lucky, he will not make the same mistake twice. But he will make any one of the ten thousand brothers or cousins of the original.
The Mistake family is so large that there is always one of them around when you want to see what you can do in the fool-play line. 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.
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. 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. There is no need to feel anger over being human. But the inverted tip that is, the explanation that does not explain—serves merely to keep you from wisely selling short. The natural tendency when a stock breaks badly is to sell it. There is a reason—an unknown reason but a good reason; therefore get out. But it is not wise to get out when the break is the result of a raid by an operator, because the moment he stops the price must rebound.
Inverted tips! There are people who go on hope sprees periodically and we all know the chronic hope drunkard that is held up before us as an exemplary optimist. Tip-takers are all they really are. The behaviour of a certain stock is all you need at times.
You observe it. Then experience shows you how to profit by variations from the usual, that is, from the probable. 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. 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. 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. It requires more time and more work to keep posted and to that extent stock speculation has become much more difficult for those who operate intelligently.
Reminiscences of a Stock Operator Quotes