Evening star., 1903-08-01

. stringent money market Tho speouiator,
therefore, must be sure Of that market
Then. while the one stock in which he is
interested is selling too low, 1t might be
hazardous to buy when general trade con-
ditions were unsound and prevailing lack
Of confidence was so unsettling the market
that all stocks, good and bad alike, suf-
fered. Political conditions must also sbe
watched. The proceedings Of Congress
must be followed. revolution In Mace
donia, a famine in India, an outbreak in
China may disturb the markets of the
world. Twice a complication growing out
Of the affairs of the little South Amerl-
can republic of Venezuela caused nearly
panic. The scientific speculator in stocks
therefore. must keep a firm grasp on the
affairs Of the entire globe, so as to know
when to buy and when to sell This, 1t Is
needless to say. Is something more than
the Tipping up OF COIN
Market Manipulation.
But there is still something more. The
stock market is controlled not alone by
values and general conditions. but also by
manipulation. The scientific speculator
bases his operations on value and keeps
watch on world wide influences, but he also
understands the art Of manipulation. This
may be described as the making Of prices
SO that they conform to the manipula tor s
ideas OF value Manipulation can be car
ried on commonly only by spectators Of
large means and inside information. There
are two kinds of manipulation. One Is
distinctly immoral. This is when an op-
market as to unload upon 1t worthless
property. This is done by making 1T ap-
pear to be what 1t is not. 1t Is species OF
selling goods under false pretenses But
there is a manipulation which is considered
legitimate. For instance. Spectator VINO
has bought a line of stocks may be tusti-
fed in using various expedientS to prevent
the public from knowing that he is selling
n q % u-h
would destroy his market. Secrecy Is, in
deed, the first essential element in ma
nipulation. One Of the greatest capitalists
in the world said not long ago that modern
business could not be conducted on large
scale without secrecy; and this was the
basis of his criticism Of President Roosevelt.
whose policy of publicity in regard to the
trusts, he declared, would strike at one of
the founda ton principles Of commercial
success.
There are many ways in which a specu-
lator may conceal his operations. 1t would
be protitless. however, to enter upon an
exhaustive description of tho various de-
vices of a skillful manipulation. The possi-
BILE combinations are as numerous as in
the game of chess. Speculation. however.
may be better compared to American poker,
in which chance has considerable share,
but which nevertheless requires keen ap-
probation of the value of the cards one
holds. The first essential Of poker Is con-
cealment of ones own cards and the ability
to read what one opponent hOldS IN the
expression of his face or the movement of
his hands. In stocks a common method
Of concealing ones operations is by em-
ploying several brokers at once, so that,
by using all, the street is uncertain what
you are actually doing.
Selling "Short."
What has been said has been based, in
general, upon the assumption that the spec
ulator is buying stocks, so as to sell, just
as the merchant may buy woolens and
silks to sell them at profit, But the
stock market contains a mechanism by
which the speculator may sell what he does
not own. In the hope of buying later at
lower price, and thus being able to make
delivery to the original buyer. This is
what Is called selling short" Outsiders
have difficulty in understanding this pro-
cess and. indeed. general rule. none
but professional operators speculate on the
short side 1t Is distinctively a bear op-
Grafton. 1t Is the act of a man who be-
lieves that prices are going to decline. In
order to profit by that belief he orders his
broker to sell a stock or stocks for him.
Now, he does not own these stocks and
50 he cannot deliver the goods he has sold.
What does his broker do? He goes to an
other broker and borrows the stock. This
broker is generally glad to make the loan,
as it reduces the cost of carrying the
curitieS, that cost being the interest on the
money invested in them. With the stock
borrowed, the broker acting for the bear
operator makes delivery to those to whom