Evening star., 1922-09-28
WARNS INVESTORS
70 BEWARE POOLS
Stock Exchange Trader De-
scribes Pitfalls in Talk to
0ptimist Club.
TELLS TICKER STORIES;
J. :. -. 4 e.
Uses Tape in Illustrating Methods
" by Which Public Loses
Money. /.
TELLS TICKER STORIES.

The ms and outs Of stock pool trading,
with clear exposition Of the scant:
chances for many blind poor' ventures
to return profits, were displayed to the
Optimist Club yesterday at the regular
meeting in the Arlington Hotel. by A.
NJ. Fisher Of the Stock Exchange Be-
curity Corporation.
IAN blind pools are. unsound as In
vestment or speculative sources" Mr..
Fisher said. "They are subject to runs.
They hold themselves ready to repay
deposits Of their clients upon demand,
and as a result when there is any furry
in the market they have to get out of
tho market TO make their refunds i'm
mcdiately. often resulting disastrously."
Mr.. Fisher produced charts and figures
to support his statements. He also
brought along a few yards Of ticker
tape to illustrate his talks.
Describes "safen Pool.
Marginal trading. he said. which is the
basic operative principle Of many pools,
Y the curse Of the game. He showed
that the expenses, including brokerage
made the cost Of 500 transaction
$3t. This, in turn, he said. means that
every thirtieth transaction wipes out
somebody. He showed tho ticker tape
with the thirtieth transaction marked
Tor few yards to show the frequency
with which some one was wiped out.
It must occur from evidence Of the tape,
every time a few feet Of the paper Is
licked of from the machine.
He supported one type Of pool, how
corporated cooperative arrangement.
The stockholders cannot demand their
money back at any time from the
treasury of the corporation. When
the money comes in, in payment for
stock. 1t Is made working capital.
dtted and stockholders can order the
audit.
A cardinal rule. he said. should be
no marginal trading. Minor rules
should be actuarial studies of the
market. made on the same principles
and trading on only short-priced
stocks. because of the enormous In
creased percentages In the huctua-
tions: elimination Of marginal trad
ing, he said. excludes the possibility
OF being caught in a short corner. be-
cause there can, be no short selling
under the system of outright pur-
chase OF stock. Another rule, he de-
clared. should be the buying OF stocks
as they decline to certain point.
vi tLc deCl1nS, ana pldC~
ing a "stop-loss' order to sell when
;; 1t hits dangerously low mark. This
insures, he said. the getting into the
market at rock-bottom figure on
| the average. and results eventually
In greater profits.
Periodical Profits.
Concluding, he said he had never
been able to discover how it was that
stock promotions could promise Pc.
riodieal profits OF weekly or monthly
regularity and still be steady In the
market. The nature of movements
and the frequency Of ups and downs
put the odds against regularity of
profit taking. he declared.
President Wade H. Atkinson pre-
sided. Secretary G. e. s. Williams
drew the first prize Of the meeting,
presented by Optimist Harry viner.
Lee L. Herrell next week will de-
liver an address on climber in the
Forest and in the Lumber Yard" ex-
planning the progressive stages OF it's
journey to the city and various i'm.
provements in the preparation OF
timber for use. :.