Evening star. [volume] (Washington, D.C.) 1854-1972, 1905-04-23
The Inside of Wall Street
By EDWIN LEFEvRE.
Copyright, 1908, by Mcclure, Phillips 4 Co..

At various times during the course of
a big market swing" whether 1t be an
upward or n downward movement there
come periods Of dullnese. In bull market
such have had for a year past this
happens when the capacity OF the public to
absorb stocks has been flied temporarily.
But the market IS never in a state of
perfect equilibrium - that is. as between
market quotations and actual values-there
iust always be fluctuations In the quoted
prices. At times these huctua lions are to
so great an extent the result OF opera
tons by professional spectators that the
street calls It professional market" In
the same way there come times when
stocks are high. but let us say, not much
higher than basic conditions actual and
prospective, warrant. Then small rises
are followed by small declines. The great
hnanCierS are not especially busy. so far
as the manipulation of the stock market is
concerned, and the public is not willing to
make new ventures large scale. The
market rests. 1t then happens that if
prices rise point or two the active traders
endeavor to take profits, or somebody else
before them tries to do So and recessions
follow until sufficient buying power de-
ve,opS at the lower level and the decline is
checked. The street calls this trading
market. and gives the excellent advice to
the public to buy stocks when they are
weak and sell them when they are strong.
If the swing is upward, that is If underly-
Ing conditions on which security values are
based continue to improve, the upward
course of prices is resumed, and, OF course,
II unsettling circumstances arise, a crop
failure, Signs of decreasing commercial &C
tivity, etc, the reaction toward a still
lower level of values extends beyond the
ordinary decline of a trading market
These are elemental facts hiCh 1t seems
unnecessary to recite. But 1t also is an ell
emental fact that not one in hundred out
siders ever puts into practice what all of
them Indignantly assure you they recog-
nize in theory. 1t may be that the aver
age gambler whose money is at stake loses
the sense of perspective. second-rate
chess player looking on often sees mas
ter make unwise moves. 1t is easy to
judge financial matters dispassionately
when ones personal fortune is not involved,
and the market commitments of the aver
age man influence his thoughts and affect
his point of view. Now and then an out
slider comes into Wall street who let's his
opinions influence his operations instead of
the reverse, and If he is an accurate OBJ
server he stays in Wall street because he
makes money there far more easily and
quickly than anywhere else.
Big and Little.
In a trading market it is the professional
Spectator who is responsible for the greater
part of the transactions on the exchange.
The smaller of them, the "piker'' and the
eral thousand shares daily, buying and
selling the same stock, 1t may be, dozen
times in an hour, content with fractional
profit. and prompt to limit his losses to the
smallest possible fraction of a point. He
does not always succeed Not long ago one
of them traded in 5000 shares in one day.
He made money on some of his turns and
lost on others. The net result for the day
nil; he came out exactly even. These
men a rule follow and not lead. Be
lr1Ga of nan Hia1 Inc IN nj
do not make fluctuations, but merely bet
on them. They see stock becoming ac-
tive, and they go with the tide as they see
It. But the larger traders, especially of
late, have been operating on scale I'M
dreamed of a few years ago. The number
of professional speculators-men who live
exclusively by their daily stock operations
who can and do buy and carry thirty or
forty thousand shares or, as the case may
be, will go short that much is so large that
between them they can influence the course
of the market very decidedly. particularly
in q trading market Such men have no
prejudices and no partialities. They sell as
easily as they buy; indeed. the average pro
fessional would rather sell than Duy WhIe
with the public the opposite is true because
the average American is an optimist The
professional will sometimes permit himself
to talk of conditions and earnings ana the
business outlook, but his heart IS wound
about with ticker tape. and his mind is on
the visible buying or selling of particular
stock instead of on the financial condition
OF the company in whose securities he is
trading.
An Example.
One of the boldest and most successful Of
OF all the room traders is a man whose lg-
norance of those factors which determine
real values is simply colossal, complete and
absolute. He Will blithely buy 10000
shares of the stock of a company concern
ing whose affairs he knows several hundred
mol less than nothing. But he DuyS
because he thinks the market in general
and the stock in particular are going up
and he helps the rise with all his might
Providence guided his footsteps IN the d.
rection OF Wall street, and he is there gam
bling and he might have been making
book at a race ira k or helping the rou-
lette wheel to revolve In some Jerome
less town 1t is a matter of record-lt