Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-04-23

happened some years ago-that he once
bought 5000 shares of a stock he heard was
going up. friend drew him aside and
said:
You have just bought some p. Q. and
Yes. hear It's going up
DO you know what that is?"
Sure. It's good thing
DO you know anything about that
road?'
"Naw.'
well. It's a rotten road Why, man. it's
bonded for $4,000 a miller Think OF the
fixed charges"
"Oh, about 1900. And bonded for $50. COO
a mile"
The trader figured apidly. The total was
appalling. He promptly sold out his line"
He lost $4,000. Then the stock went up.
He would have won $4,000 If he had not
known what the bonded debt was. After
that experience his trading motto has been:
ITO hades with statistics. Give me the
tape every time. He feels for the man
who demands statistical information the
same contempt that the old practical
miner" has for the college-bred dude theor-
list" But he is superlative good judge of
technical market conditions. and remark
ably clever reader of the tape. With this
and his plunsing proclivities he has made
big winnings. And big losses, too.
And yet even the ShreWdeSt professionals
do not always grasp the Importance of GER
tain bits of news which even tyro should
know must affect prices. They grasp the
concerns one stock, but when 1t is more
sweeping they are often at I remember
meeting a well-known professional trader
just after receiving an Associa ted Press dis
patch. The news was bad and unexpected.
1 told 1t to him. He turned a blank stare
and asked:
"Wil that affect the market?"
Its a hundred to one that it will
(which way?"
I explained the bearing of the news on
the general railway situation. But even
then he asked:
What stocks would you sel?'
Perhaps he was an exceptional case. But
the fact remains that when these profess
SIGNALS the active element in the
market fluctuations resulting from their
operations must be read differently than
when they the outcome of the more
legitimate buying and selling Of a broader
and active market. For one thing 1t Is in
fnitely harder for the outsider to know
when to take a profit or when to stop
loss. A stock may look as If 1t had just be-
gun to go up, and. as matter of fact 1t
is at the end of the advance The profess
sional recognizes this and cashes in. Sim
ilarly on a decline the market begins to
look particularly 'sick'' when 1t Is scraplng
bottom. But If the public Is fooled by the
insignificance of price-fuctuations in a
trading market, the professional is apt to
fare i'll when a "big swing Is on. At the
time of the reelection Of Mckinley in 1900,
when the biggest stock boom In our history
started, time and again the professionals
"bucked' the advance. falling to grasp the
tremendous momentum Of that memorable
rise, and time and again lost. The shrewd-
est traders, the most experienced Of the pro-
fessionals were in point Of fact the heaviest
losers. 1t was only when they confessed
that they could not read the market and
bought because everybody else was buying
that they made money.
About Tips.
Even the character of the tips" that
furnish excuses for buying or selling stocks
t. In, rIrnf
seldom of such a nature to make the
would-be buyer look ahead several months;
they are always of the minute. Your hear
less Of what roads are doing, how earnings
are and ought to continue to be, and more
of what they" are going to do with one
another stock. 1t is mysterious body of
unnamed magnates, to whom the tfpsters
refer invariably as they" This week when
the rumors of the impending resumption of
hostilities between Messrs. Hartman and
Hill helped TO depress prices 1t was per-
fectly amazing to learn how many people
were in the confidence of one or the other
financier Corroboratiye details were forth
coming, the very words Mr.. Hartman applied
to the Great Northern giant being given,
and when you heard what Mr.. Hill had said
of Mr.. Hartman, you were forced to admit
is sounded Characteristic enough especially
if you knew how Mr.. Hill talked May
10, 1901. Stocks declined. The next day
stocks rallied. Were the tpsters discon-
certed? Not a whit. They said logically
enough, that both parties had realized how
serious the consequence of another fight
would be and in order to avert panic had
buried the Ratchet.
The outsider is apt to follow tips. The big
men, the captains of finance, sometimes
convey impressions which may result in
financial losses to those who have received
them, but. a rule their advice is based
on real developments. If they tell you that
vast sums have been spent in improving the
physical condition of a railroad and the mo-
tive power or rolling stock, they add that
this Improvement must result in greater
profits. But this does not mean that the
price of the stock is going up the next day.
Ii may be weeks or months before the price
will be higher. But in a trading market
that Is too long to walt Quick small
profits are wanted; not long pulls. And this
is what the public fails to realize.