Evening star., 1926-10-15
MEN AND MONEY
By NJ. S. Rukeyser.
Copyright. 1026.t
Pity the poor Wall Street Bear

Iht lIS BOOL w All street Bear.
He may win fortune. That is
problematical. but it is certain that
he will arouse popular wrath. The
bear speculator thrives on mass super
stitions and mistakes. He disbelieves
that the trees of prosperity can grow
without interruption up to the skies.
He takes the position that even good
stocks sometimes sell above their in
trinsic values. He hopes to profit
by restoring reason, and, ina smuch
as he helps to Illustrate the ambitions
of many amateurs who are guided
by greed and unreasoning hopes and
fears, he is hated.
The bear, for self protection, COW
ers up his operation, and avoids pub
lie interviews.
In the popular mind. jesse Liver
more is considered the outstanding
hear of the present generation of
Wall Street plungers. He was ldenti'
fed with the February and March
collapse of the earlier bull specula-
ton at the New York Stock Exchange,
and current gossip links his name
with the latest setback in the market
Switches His Position.
Like all successful spectators, Mr..
J5yermore switches from the bear.
~, nessimistic. to the bull or optinis-
iic side. in accordance with his an
.icipations of changing positions.
Contrary to general belief, MI
Iivermore saws that he has made the
most money on the bull side; that Is,
,.y'buyinc stock and holding IT 1or
rise. He finds bear position. whlch
involves selling short. fraught with
more risk. Selling short entails max
tn Io1iUnr the next
day stock which you do not possess.
In order to fulfill the contract, you
borrow the stock from some one who
has it. and give him 100 per cent IN
cash for it as long as you keep IT,
Then YOU deliver the borrowed stock
10 your customer. and return similar
shares to the broker who lent stock
at such time as YOU choose TO go INTO
the market and buy 1t. In order tc
make a profit, the bear. or short sell
Ier. must be able to buy back the
stock. or cover, at a lower price than
the quotation at which he originally
sold the stock. When a speculator
anticipates a decline, he sells stock
short. The public is usually optlmls-
tic and is vague about the technique
of short selling,
Mr. Iivermore makes it "a RUE
never to sell more than 10 per cent
nj the total capitalization of a cor
noration short. because he finds In
nractice that it is not safe to assume
that he can readily borrow more than
that amount. If a, speculator seils
short and then finds himself unable
to ho,.roW stock, he is cornered. ana
Is. at the financial mercy OF those
with whom he has made contracts
which he cannot fulfill.
Looks Younger Than Years.
In spite of spectacular ups ana
downs in his exciting career, Mr.
,ivermore. a tall. blonde figure, with
hlue ewes and a fair complexion, LOOKS
far Younger than his years. Althoush
he is on the threshold OF mlddle age
wall Street still thinks OF hlm as
the boy plunger, name which ne
won many years ago, When' dS d
youth of IA. he matched wits with
i,oorers of old-fashioned bucket shops
in Roston. The old bucket shops
Waved against their customers. and
coon excluded Livermore because MS
iudgment proved uncanny. the DUCK
Of shops were looking for suckers, not
viva lds.
successful spectators are rare BIRDS,
and even Livermore has made costly
mistakes. Before the war he was
u-in.d ont and went into bankruptcy.
Although not legally obligated. ne
later paid off his debts in full. III ne
cuesses wrong again, however ne VIII
not spend his old age in poverty 1or
he bought a large life insurance an
nuity. which cannot be toucileu ny
the vicissitudes of speculatlon'
Many of the other bears are moor
La Stnnk Exchange OF
whom the public has never heard.
Bernard NJ. Baruch, who took as
large a fortune out of the stock mar
ket as any individual of his time. lald
the basis for his estate by short sell
ing on a colossal scale before tne
panic of 1907. For time the market
moved against him, continuing ~
rise. and il took rare courage to face
the prospects of ruin. Finally events
proved he was right. and profits be-
gan to come in in horses and car
ria geS.
Bull Markets Longer.
The history of Wall Street shows
that ordinarily bull or rising markets
last twice as long as bear or falling
markets. Liquidation proceeds with
greater dispatch than accumulation
for a rise. Moreover. bull markets
turn into bear markets more suddenly
and with less warning than bull mar
ketS start The fact makes the public
habit of waiting for the last eighth
of a point of profit an almost certain
cause of ultimate loss.
The multitudes fail at margin
which calls for indie
pendent thinking and instantaneous
action.
Otto II. Kahn. member of the firm