Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-11-16
CHAPTER VII.
Raceut Rear Pools.

I'm describing some of the recent
bear pools in this article. 1t Is shown
that the short interests" have their
virtues as we'll as their vices ana
often contribute to the settling OF the
market and normalizing values)
From the Spring of 1925 until near
the end of 1928 the bears In Wall Street
we're compelled to. hide out" During
the early part of this long bullish season
the setting Of "bear traps" was favor
tie sport of pool operators, and bear
steaks" were frequently served for the
enjoyment of the victorious bulls. Later
the bears learned that the market adj
vance represented huge expansion OF
business activity, which would terminate
only when 1t had fully run its course.
Many famous bear operators retired;
some went broke; while the others either
were converted to the bull side or con-
tented themselves with "Scalptng few
points" on minor technical reactions.
In 1928 the great strength OF the bull
movements of the stock market was due,
in part, to this lack Of short interest.
The bears hibernated for the season,
but they were not exterminated-aS
more recent events testify. One friend
OF mine who prefers operations on the
short side, left for Europe early in 1927
and watched the bull markets of the
next two years from the cafe tables of
Paris. His was not an isolated case.
Many operators in the stock market
understand short selling tactics, and do
not understand the psychology necessary
to success in bull markets. These CON
genital bears" leave the market when
conditions are unfavorable for trading
on the short side. Sometimes they re-
main quiet for long time, but sooner
or later they always return to activity.
The alternating bears began to wake
up and take a serious interest in life
at the time the copper stocks staged
their rapid advance in the early months
of this year. 1t is tradition among
professional spectators that boom in
the copperS" marks the end Of every
bull market. Like other supposedly in
fallible indices of market movements,
suspect this dogma is a little too facile,
but it cannot be denied that last Spring
when the price OF copper metal reached
20 cents p round and the copper stocks
shot through the roof" many sleeping
bears swoke with q snort and prepared
for action.
MY friend in Paris dropped his study
the first boat for New York and took
up the more intensive study Of charts
of price movements in the copper stocks.
When greeted him in his new offices
he announced with enthusiasm: IT
believe this prosperity I've heard SO
much of is about to arrived"
$15,OOO,OOO Bear Pool in Coppers.
This man has earned his reputation
for successful bear operations. He has
been among the guests at every big bear
to organize 5000 900 pool to finance
his renewed activity. This pool closed
in June, after having materially as
sisted In the readjustment Of prices In
three copper stocks. Prosperity arrived
on schedule for one big bear.
In this connection I hope that no
reader will fail to note the fact that the
copperS were very, very high. Con-
sentative opinion was almost unanimous
that reaction Of the copper stocks was
inevitable. Bears cannot force market
break; they can only take advantage of
inherent weaknesses in the financial
structure to hasten the day of judg-
ment For my part, confess to q SYM
pathetic attitude toward the bears on
these occasions. see more virtue in re-
ducing overboomed stock prices to
proper levels than in boosting prices to
figures which can neither be justified
nor maintained.
And it should not be deduced from
the above references to "congenitaI
bears" that this group alone participates
in bear raids on the market. other
pool managers and large SPECTATORS
are more versatile. They are able to
operate successfully on the long side
in fun seasons, and on the short side
in bear seasons. I know of more than
one pool operator who quickly switched
to the short side in October. Several