Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-12-31


period Of per ~
Sistently risi ng
quotations.
The year was
repiete with in c.o,r. r Hurh..
terestin~ Incl
dents. They included the WheelnS
& Lake Erie corner in February: the
break that followed President Cool
idges Il do not choose" announce
mert; the excited speculation that
followed Henry Ford's re-entrance
into the field OF active motor car
Production. and many minor events
which caused violent swings one way
or another. The real feature of the
year. however. was not the breadth
or the activity of the market or its
reaction to any specific development.
IT was the markets astounding vi
tality.
Setbacks Surprisingly Moderate.
There were setbacks from time to
time. as has always been the case
In advancing markets: hut they were
OF surprisingly short duration. Time
and again ii would look as though
THE back OF the bun market had
been broken" but invariably il was
an illusion. The market always
stunned. perhaps under different lead
ership, bdt still resumed. This char
acteristic was predominant well up
toward the end.
II was the usual thing all year in
every market chronicle 10 stress the
'new highs" Some of them were of
stocks that simply sold higher than
at any time earlier in the year, but
a goodly proportion of them marked
new highs for all time. For instance.
three. Atchison. General Motors and
United States Steel all distinguished
themselves in this respect during
1897. There were scores of others.
and while there were stocks that
moved contrary to the trend they
were exceptions and seldom called
for comment.
Now. before discussing the back
ground OF this phenomenal advance
in stocks. the fundamentals con-
cerned, the investment element that
played 20 prominent A part, il may
he in order TO say a few words from
the strictly speculative viewpoint.
A market which enjoyed so prolonged
and uniform an advance. would rea-
aonably be assumed TO be one in
which spectators and traders
amassed huge profits. That al least
would be the conclusion of the out
slider. He has always been led to
believe that rising prices in stocks
spell great gains for spectators. In
part such a belief was well founded,
but only in part. Statistics on the
subject obviously are unobtainable,
hut IL In doubtful whether the av-
rage Wall Street trader made any.
thing like the amount ne would he
supposed 10 make in market OF
the kind the past year experienced.
A. . matter Of fact, some unfortu-
mates had no profits at all. and good
many had large losses. II IL human
nature 10 brsg about ones winnings.
but 10 say nothing about the other
side. And yet every customers man
sn he street could tell stories Of
clients 10 whom 1921 had been dis
sstrolis year.
Many Spectators Guessed Wrong.
Let is see how this "a me about. In
the first place the average profess
sionzi specuIafor was skepticsl about
the market fully half the time. The
more experience ne had had in Wall
street the more sksptjcai he was. The
consequence was that even when he
bought siocks that subsequently, sold
much higher ne never waited for The
FSfSS tFBFt ~ HitSit JIG ~ Nv "a
hJ' took . few points when he might
have Rad 10 Worse yet. he allowed
min self TO be frightened out 81 his
commitment and took an entirely un-
necessary l0sF on = minor reaction,
Then there were those that "pis ned
the snort SIDE They did moi believe
sn tho market. and they acted accord
tngly Soi ~ Of them were small fry
either There we're plenty ~ thai
Kind for the technique Of short sell
ing IL be,lsr understood today than tt
ever sss t,efore and 'he story ~ the
best known bear in recent years
and MS exploits along ihs} line u
LuOsp Ds heart ~ the ffeau@nterS Of
ever fyps ydfoon Buf "hi2 men"
ma de mistakes sBd costly ones also
4 Million Dollar I<pNes.
Just 10 mention ease or iwo per
soya lIT kFn@n 10 the writer There
vsas one millionaire vino sent down
from mir Summer camp ~ the A0iT,n-
dscks 10 one Of the largest Ia nkln2
houses in the Street asking them I"
send up az week end guer, . u1a Il
.shG could tell him what 30 80 1iton'
he position IN the market. IS" waS
Fhpta sn1 he'd pa per loss 81 u"ari
4 400 900
Then there ~ss 3 customer of Ger
tsIn large brokerage fr0. He sDid
Ssogt 500 sbs res ~ 81 ifadiuG lndUs
ira early IN the year The comps . s
IN which hf mad i reverse Interest ds-
rlsgef . large STORY dividend. ln"Teas
FMS n3s Ttsk suf eiii he siased shagi
ne Iept putting up margin until
finally the ioss on thlS one tn Insertion
Ysn into six figures Then he aos tired
~ sdvsneing m0neY snG Ms tF51Rh'
tn d." ~ DIES nof taks many inrlIents
~ ifiE Kind "a Dhdo pfofliabls trades
rs D5her sisrbf.
~ nurse there we're traders WIZ
made money anG soDIs III them tit
yasney but lhey were not as nnmsf
D4s ~ H. commonly beliTsed
Even TovpoTsti0n HTads FIR,
E.en alFelf1tt sn6 ess"uiltts 3"
snise - ibe coFpDfstIDns, 30" 80" b.
sf nbi1h were speculative faFotIteF
gsEkee fam ~ rae nIafbri st"''
sbsn one diseetDF soid bir siork he
ssns4 he ib1Ught u ~aF TOO ligh an
tUer ns0 10 boy ~ batf h%s. so
81 even twenty ppjnts higher. M"t
shsn ane executive told bjs friend
s,st they hBd i,ettsr sell toe sio"k %
the concern in whleu he VAS inter
eSsed Le.aUse iis financial positj"n dl'
nol wsfrsut ths ua1t"t prize IN
ssila bly, saafptsHc@ 81 iislF adHi's IN
Nj N i0ss
"a would b. Improper shd . b'"af.'
II confidence 10 De too specific abDu
instances of this KIND suf'1se u q
esP tilsi il tbe uBtnes ~ corporation
ptekaaenlk and thsifnrn III b"s q
&sio tool ibiz sl3jlndr "pnid be n"h
g