雙語·股票大作手回憶錄 第十四章

IT has always rankled in my mind that after I left Williamson & Brown's office the cream was off the market．We ran smack into a long moneyless period；four mighty lean years．There was not a penny to be made．As Billy Henriquez once said，“It was the kind of market in which not even a skunk could make a scent．”

It looked to me as though I was in Dutch with destiny．It might have been the plan of Providence to chasten me，but really I had not been filled with such pride as called for a fall．I had not committed any of those speculative sins which a trader must expiate on the debtor side of the account．I was not guilty of a typical sucker play．What I had done，or，rather，what I had left undone，was something for which I would have received praise and not blame—north of Forty-second Street．In Wall Street it was absurd and costly．But by far the worst thing about it was the tendency it had to make a man a little less inclined to permit himself human feelings in the ticker district．

I left Williamson's and tried other brokers' offices．In every one of them I lost money．It served me right，because I was trying to force the market into giving me what it didn't have to give—to wit，opportunities for making money．I did not find any trouble in getting credit，because those who knew me had faith in me．You can get an idea of how strong their confidence was when I tell you that when I finally stopped trading on credit I owed well over one million dollars．

The trouble was not that I had lost my grip but that during those four wretched years the opportunities for making money simply didn't exist．Still I plugged along，trying to make a stake and succeeding only in increasing my indebtedness．After I ceased trading on my own hook because I wouldn't owe my friends any more money I made a living handling accounts for people who believed I knew the game well enough to beat it even in a dull market．For my services I received a percentage of the profits—when there were any．That is how I lived．Well，say that is how I sustained life．

Of course，I didn't always lose，but I never made enough to allow me materially to reduce what I owed．Finally，as things got worse，I felt the beginnings of discouragement for the first time in my life．

Everything seemed to have gone wrong with me．I did not go about bewailing the descent from millions and yachts to debts and the simple life．I didn't enjoy the situation，but I did not fill up with self-pity．I did not propose to wait patiently for time and Providence to bring about the cessation of my discomforts．I therefore studied my problem．It was plain that the only way out of my troubles was by making money．To make money I needed merely to trade successfully．I had so traded before and I must do so once more．More than once in the past I had run up a shoe string into hundreds of thousands．Sooner or later the market would offer me an opportunity．

I convinced myself that whatever was wrong was wrong with me and not with the market．Now what could be the trouble with me？I asked myself that question in the same spirit in which I always study the various phases of my trading problems．I thought about it calmly and came to the conclusion that my main trouble came from worrying over the money I owed．I was never free from the mental discomfort of it．I must explain to you that it was not the mere consciousness of my indebtedness．Any business man contracts debts in the course of his regular business．Most of my debts were really nothing but business debts，due to what were unfavourable business conditions for me，and no worse than a merchant suffers from，for instance，when there is an unusually prolonged spell of unseasonable weather．

Of course as time went on and I could not pay I began to feel less philosophical about my debts．I'll explain：I owed over a million dollars—all of it stock-market losses，remember．Most of my creditors were very nice and didn't bother me；but there were two who did bedevil me．They used to follow me around．Every time I made a winning each of them was Johnny-on-the-spot，wanting to know all about it and insisting on getting theirs right off．One of them，to whom I owed eight hundred dollars，threatened to sue me，seize my furniture，and so forth．I can't conceive why he thought I was concealing assets，unless it was that I didn't quite look like a stage hobo about to die of destitution．

As I studied the problem I saw that it wasn't a case that called for reading the tape but for reading my own self．I quite cold-bloodedly reached the conclusion that I would never be able to accomplish anything useful so long as I was worried，and it was equally plain that I should be worried so long as I owed money．I mean，as long as any creditor had the power to vex me or to interfere with my coming back by insisting upon being paid before I could get a decent stake together．This was all so obviously true that I said to myself，“I must go through bankruptcy．”What else could relieve my mind？

It sounds both easy and sensible，doesn't it？But it was more than unpleasant，I can tell you．I hated to do it．I hated to put myself in a position to be misunderstood or misjudged．I myself never cared much for money．I never thought enough of it to consider it worth while lying for．But I knew that everybody didn't feel that way．Of course I also knew that if I got on my feet again I'd pay everybody off，for the obligation remained．But unless I was able to trade in the old way I'd never be able to pay back that million．

I nerved myself and went to see my creditors．It was a mighty difficult thing for me to do，for all that most of them were personal friends or old acquaintances．

I explained the situation quite frankly to them．I said：“I am not going to take this step because I don't wish to pay you but because，in justice to both myself and you，I must put myself in a position to make money．I have been thinking of this solution off and on for over two years，but I simply didn't have the nerve to come out and say so frankly to you．It would have been infinitely better for all of us if I had．It all simmers down to this：I positively cannot be my old self while I am harassed or upset by these debts．I have decided to do now what I should have done a year ago．I have no other reason than the one I have just given you．”

What the first man said was to all intents and purposes what all of them said．He spoke for his firm．

“Livingston，”he said，“we understand．We realise your position perfectly．I'll tell you what we'll do：we'll just give you a release．Have your lawyer prepare any kind of paper you wish，and we'll sign it．”

That was in substance what all my big creditors said．That is one side of Wall Street for you．It wasn't merely careless good nature or sportsmanship．It was also a mighty intelligent decision，for it was clearly good business．I appreciated both the good will and the business gumption．

These creditors gave me a release on debts amounting to over a million dollars．But there were the two minor creditors who wouldn't sign off．One of them was the eight-hundred-dollar man I told you about．I also owed sixty thousand dollars to a brokerage firm which had gone into bankruptcy，and the receivers，who didn't know me from Adam，were on my neck early and late．Even if they had been disposed to follow the example set by my largest creditors I don't suppose the court would have let them sign off．At all events my schedule of bankruptcy amounted to only about one hundred thousand dollars；though，as I said，I owed well over a million．

It was extremely disagreeable to see the story in the newspapers．I had always paid my debts in full and this new experience was most mortifying to me．I knew I'd pay off everybody some day if I lived，but everybody who read the article wouldn't know it．I was ashamed to go out after I saw the report in the newspapers．But it all wore off presently and I cannot tell you how intense was my feeling of relief to know that I wasn't going to be harried any more by people who didn't understand how a man must give his entire mind to his business—if he wishes to succeed in stock speculation．

My mind now being free to take up trading with some prospect of success，unvexed by debts，the next step was to get another stake．The Stock Exchange had been closed from July thirty-first to the middle of December，1914，and Wall Street was in the dumps．There hadn't been any business whatever in a long time．I owed all my friends．I couldn't very well ask them to help me again just because they had been so pleasant and friendly to me，when I knew that nobody was in a position to do much for anybody．

It was a mighty difficult task，getting a decent stake，for with the closing of the Stock Exchange there was nothing that I could ask any broker to do for me．I tried in a couple of places．No use．

Finally I went to see Dan Williamson．This was in February，1915．I told him that I had rid myself of the mental incubus of debt and I was ready to trade as of old．You will recall that when he needed me he offered me the use of twenty-five thousand dollars without my asking him．

Now that I needed him he said，“When you see something that looks good to you and you want to buy five hundred shares go ahead and it will be all right．”

I thanked him and went away．He had kept me from making a great deal of money and the office had made a lot in commissions from me．I admit I was a little sore to think that Williamson & Brown didn't give me a decent stake．I intended to trade conservatively at first．It would make my financial recovery easier and quicker if I could begin with a line a little better than five hundred shares．But，anyhow，I realised that，such as it was，there was my chance to come back．

I left Dan Williamson's office and studied the situation in general and my own problem in particular．It was a bull market．That was as plain to me as it was to thousands of traders．But my stake consisted merely of an offer to carry five hundred shares for me．That is，I had no leeway，limited as I was．I couldn't afford even a slight setback at the beginning．I must build up my stake with my very first play．That initial purchase of mine of five hundred shares must be profitable．I had to make real money．I knew that unless I had sufficient trading capital I would not be able to use good judgment．Without adequate margins it would be impossible to take the cold-blooded，dispassionate attitude toward the game that comes from the ability to afford a few minor losses such as I often incurred in testing the market before putting down the big bet．

I think now that I found myself then at the most critical period of my career as a speculator．If I failed this time there was no telling where or when，if ever，I might get another stake for another try．It was very clear that I simply must wait for the exact psychological moment．

I didn't go near Williamson & Brown's．I mean，I purposely kept away from them for six long weeks of steady tape reading．I was afraid that if I went to the office，knowing that I could buy five hundred shares，I might be tempted into trading at the wrong time or in the wrong stock．A trader，in addition to studying basic conditions，remembering market precedents and keeping in mind the psychology of the outside public as well as the limitations of his brokers，must also know himself and provide against his own weaknesses．There is no need to feel anger over being human．I have come to feel that it is as necessary to know how to read myself as to know how to read the tape．I have studied and reckoned on my own reactions to given impulses or to the inevitable temptations of an active market，quite in the same mood and spirit as I have considered crop conditions or analysed reports of earnings．

So day after day，broke and anxious to resume trading，I sat in front of a quotation-board in another broker's office where I couldn't buy or sell as much as one share of stock，studying the market，not missing a single transaction on the tape，watching for the psychological moment to ring the full-speed-ahead bell．

By reason of conditions known to the whole world the stock I was most bullish on in those critical days of early 1915 was Bethlehem Steel．I was morally certain it was going way up，but in order to make sure that I would win on my very first play，as I must，I decided to wait until it crossed par．

I think I have told you it has been my experience that whenever a stock crosses 100 or 200 or 300 for the first time，it nearly always keeps going up for 30 to 50 points—and after 300 faster than after 100 or 200．One of my first big coups was in Anaconda，which I bought when it crossed 200 and sold a day later at 260．My practice of buying a stock just after it crossed par dated back to my early bucket-shop days．It is an old trading principle．

You can imagine how keen I was to get back to trading on my old scale．I was so eager to begin that I could not think of anything else；but I held myself in leash．I saw Bethlehem Steel climb，every day，higher and higher，as I was sure it would，and yet there I was checking my impulse to run over to Williamson & Brown's office and buy five hundred shares．I knew I simply had to make my initial operation as nearly a cinch as was humanly possible．

Every point that stock went up meant five hundred dollars I had not made．The first ten points' advance meant that I would have been able to pyramid，and instead of five hundred shares I might now be carrying one thousand shares that would be earning for me one thousand dollars a point．But I sat tight and instead of listening to my loud-mouthed hopes or to my clamorous beliefs I heeded only the level voice of my experience and the counsel of common sense．Once I got a decent stake together I could afford to take chances．But without a stake，taking chances，even slight chances，was a luxury utterly beyond my reach．Six weeks of patience—but，in the end，a victory for common sense over greed and hope！

I really began to waver and sweat blood when the stock got up to 90．Think of what I had not made by not buying，when I was so bullish．Well，when it got to 98 I said to myself，“Bethlehem is going through 100，and when it does the roof is going to blow clean off！”The tape said the same thing more than plainly．In fact，it used a megaphone．I tell you，I saw 100 on the tape when the ticker was only printing 98．And I knew that wasn't the voice of my hope or the sight of my desire，but the assertion of my tape-reading instinct．So I said to myself，“I can't wait until it gets through 100．I have to get it now．It is as good as gone through par．”

I rushed to Williamson & Brown's office and put in an order to buy five hundred shares of Bethlehem Steel．The market was then 98．I got five hundred shares at 98 to 99．After that she shot right up，and closed that night，I think，at 114 or 115．I bought five hundred shares more．

The next day Bethlehem Steel was 145 and I had my stake．But I earned it．Those six weeks of waiting for the right moment were the most strenuous and wearing six weeks I ever put in．But it paid me，for I now had enough capital to trade in fair-sized lots．I never would have got anywhere just on five hundred shares of stock．

There is a great deal in starting right，whatever the enterprise may be，and I did very well after my Bethlehem deal—so well，indeed，that you would not have believed it was the selfsame man trading．As a matter of fact I wasn't the same man，for where I had been harassed and wrong I was now at ease and right．There were no creditors to annoy and no lack of funds to interfere with my thinking or with my listening to the truthful voice of experience，and so I was winning right along．

All of a sudden，as I was on my way to a sure fortune，we had the Lusitania break．Every once in a while a man gets a crack like that in the solar plexus，probably that he may be reminded of the sad fact that no human being can be so uniformly right on the market as to be beyond the reach of unprofitable accidents．I have heard people say that no professional speculator need have been hit very hard by the news of the torpedoing of the Lusitania，and they go on to tell how they had it long before the Street did．I was not clever enough to escape by means of advance information，and all I can tell you is that on account of what I lost through the Lusitania break and one or two other reverses that I wasn't wise enough to foresee，I found myself at the end of 1915 with a balance at my brokers' of about one hundred and forty thousand dollars．That was all I actually made，though I was consistently right on the market throughout the greater part of the year．

I did much better during the following year．I was very lucky．I was rampantly bullish in a wild bull market．Things were certainly coming my way so that there wasn't anything to do but to make money．It made me remember a saying of the late H．H．Rogers，of the Standard Oil Company，to the effect that there were times when a man could no more help making money than he could help getting wet if he went out in a rainstorm without an umbrella．It was the most clearly defined bull market we ever had．It was plain to everybody that the Allied purchases of all kinds of supplies here made the United States the most prosperous nation in the world．We had all the things that no one else had for sale，and we were fast getting all the cash in the world．I mean that the wide world's gold was pouring into this country in torrents．Inflation was inevitable，and，of course，that meant rising prices for everything．

All this was so evident from the first that little or no manipulation for the rise was needed．That was the reason why the preliminary work was so much less than in other bull markets．And not only was the war-bride boom more naturally developed than all others but it proved unprecedentedly profitable for the general public．That is，the stock-market winnings during 1915 were more widely distributed than in any other boom in the history of Wall Street．That the public did not turn all their paper profits into good hard cash or that they did not long keep what profits they actually took was merely history repeating itself．Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street．When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators today differ from yesterday．The game does not change and neither does human nature．

I went along with the rise in 1916．I was as bullish as the next man，but of course I kept my eyes open．I knew，as everybody did，that there must be an end，and I was on the watch for warning signals．I wasn't particularly interested in guessing from which quarter the tip would come and so I didn't stare at just one spot．I was not，and I never have felt that I was，wedded indissolubly to one or the other side of the market．That a bull market has added to my bank account or a bear market has been particularly generous I do not consider sufficient reason for sticking to the bull or the bear side after I receive the get-out warning．A man does not swear eternal allegiance to either the bull or the bear side．His concern lies with being right．

And there is another thing to remember，and that is that a market does not culminate in one grand blaze of glory．Neither does it end with a sudden reversal of form．A market can and does often cease to be a bull market long before prices generally begin to break．My long expected warning came to me when I noticed that，one after another，those stocks which had been the leaders of the market reacted several points from the top and—for the first time in many months—did not come back．Their race evidently was run，and that clearly necessitated a change in my trading tactics．

It was simple enough．In a bull market the trend of prices，of course，is decidedly and definitely upward．Therefore whenever a stock goes against the general trend you are justified in assuming that there is something wrong with that particular stock．It is enough for the experienced trader to perceive that something is wrong．He must not expect the tape to become a lecturer．His job is to listen for it to say“Get out！”and not wait for it to submit a legal brief for approval．

As I said before，I noticed that stocks which had been the leaders of the wonderful advance had ceased to advance．They dropped six or seven points and stayed there．At the same time the rest of the market kept on advancing under new standard bearers．Since nothing wrong had developed with the companies themselves，the reason had to be sought elsewhere．Those stocks had gone with the current for months．When they ceased to do so，though the bull tide was still running strong，it meant that for those particular stocks the bull market was over．For the rest of the list the tendency was still decidedly upward．

There was no need to be perplexed into inactivity，for there were really no cross currents．I did not turn bearish on the market then，because the tape didn't tell me to do so．The end of the bull market had not come，though it was within hailing distance．Pending its arrival there was still bull money to be made．Such being the case，I merely turned bearish on the stocks which had stopped advancing and as the rest of the market had rising power behind it I both bought and sold．

The leaders that had ceased to lead I sold．I put out a short line of five thousand shares in each of them；and then I went long of the new leaders．The stocks I was short of didn't do much，but my long stocks kept on rising．When finally these in turn ceased to advance I sold them out and went short—five thousand shares of each．By this time I was more bearish than bullish，because obviously the next big money was going to be made on the down side．While I felt certain that the bear market had really begun before the bull market had really ended，I knew the time for being a rampant bear was not yet．There was no sense in being more royalist than the king；especially in being so too soon．The tape merely said that patrolling parties from the main bear army had dashed by．Time to get ready．

I kept on both buying and selling until after about a month's trading I had out a short line of sixty thousand shares— five thousand shares each in a dozen different stocks which earlier in the year had been the public's favourites because they had been the leaders of the great bull market．It was not a very heavy line；but don't forget that neither was the market definitely bearish．

Then one day the entire market became quite weak and prices of all stocks began to fall．When I had a profit of at least four points in each and every one of the twelve stocks that I was short of，I knew that I was right．The tape told me it was now safe to be bearish，so I promptly doubled up．

I had my position．I was short of stocks in a market that now was plainly a bear market．There wasn't any need for me to push things along．The market was bound to go my way，and，knowing that，I could afford to wait．After I doubled up I didn't make another trade for a long time．About seven weeks after I put out my full line，we had the famous“l(fā)eak，”and stocks broke badly．It was said that somebody had advance news from Washington that President Wilson was going to issue a message that would bring back the dove of peace to Europe in a hurry．Of course the war-bride boom was started and kept up by the World War，and peace was a bear item．When one of the cleverest traders on the floor was accused of profiting by advance information he simply said he had sold stocks not on any news but because he considered that the bull market was overripe．I myself had doubled my line of shorts seven weeks before．

On the news the market broke badly and I naturally covered．It was the only play possible．When something happens on which you did not count when you made your plans it behooves you to utilise the opportunity that a kindly fate offers you．For one thing，on a bad break like that you have a big market，one that you can turn around in，and that is the time to turn your paper profits into real money．Even in a bear market a man cannot always cover one hundred and twenty thousand shares of stock without putting up the price on himself．He must wait for the market that will allow him to buy that much at no damage to his profit as it stands him on paper．

I should like to point out that I was not counting on that particular break at that particular time for that particular reason．But，as I have told you before，my experience of thirty years as a trader is that such accidents are usually along the line of least resistance on which I base my position in the market．Another thing to bear in mind is this：Never try to sell at the top．It isn't wise．Sell after a reaction if there is no rally．

I cleared about three million dollars in 1916 by being bullish as long as the bull market lasted and then by being bearish when the bear market started．As I said before，a man does not have to marry one side of the market till death do them part．

That winter I went South，to Palm Beach，as I usually do for a vacation，because I am very fond of salt-water fishing．I was short of stocks and wheat，and both lines showed me a handsome profit．There wasn't anything to annoy me and I was having a good time．Of course unless I go to Europe I cannot really be out of touch with the stock or commodities markets．For instance，in the Adirondacks I have a direct wire from my broker's office to my house．

In Palm Beach I used to go to my broker's branch office regularly．I noticed that cotton，in which I had no interest，was strong and rising．About that time—this was in 1917—I heard a great deal about the efforts that President Wilson was making to bring about peace．The reports came from Washington，both in the shape of press dispatches and private advices to friends in Palm Beach．That is the reason why one day I got the notion that the course of the various markets reflected confidence in Mr．Wilson's success．With peace supposedly close at hand，stocks and wheat ought to go down and cotton up．I was all set as far as stocks and wheat went，but I had not done anything in cotton in some time．

At 2：20 that afternoon I did not own a single bale，but at 2：25 my belief that peace was impending made me buy fifteen thousand bales as a starter．I proposed to follow my old system of trading—that is，of buying my full line—which I have already described to you．

That very afternoon，after the market closed，we got the Unrestricted Warfare note．There wasn't anything to do except to wait for the market to open the next day．I recall that at Gridley's that night one of the greatest captains of industry in the country was offering to sell any amount of United States Steel at five points below the closing price that afternoon．There were several Pittsburgh millionaires within hearing．Nobody took the big man's offer．They knew there was bound to be a whopping big break at the opening．

Sure enough，the next morning the stock and commodity markets were in an uproar，as you can imagine．Some stocks opened eight points below the previous night's close．To me that meant a heaven-sent opportunity to cover all my shorts profitably．As I said before，in a bear market it is always wise to cover if complete demoralisation suddenly develops．That is the only way，if you swing a good-sized line，of turning a big paper profit into real money both quickly and without regrettable reductions．For instance，I was short fifty thousand shares of United States Steel alone．Of course I was short of other stocks，and when I saw I had the market to cover in，I did．My profits amounted to about one and a half million dollars．It was not a chance to disregard．

Cotton，of which I was long fifteen thousand bales，bought in the last half hour of the trading the previous afternoon，opened down five hundred points．Some break！It meant an overnight loss of three hundred and seventy-five thousand dollars．While it was perfectly clear that the only wise play in stocks and wheat was to cover on the break I was not so clear as to what I ought to do in cotton．There were various things to consider，and while I always take my loss the moment I am convinced I am wrong，I did not like to take that loss that morning．Then I reflected that I had gone South to have a good tune fishing instead of perplexing myself over the course of the cotton market．And，moreover，I had taken such big profits in my wheat and in stocks that I decided to take my loss in cotton．I would figure that my profit had been a little more than one million instead of over a million and a half．It was all a matter of bookkeeping，as promoters are apt to tell you when you ask too many questions．

If I hadn't bought that cotton just before the market closed the day before，I would have saved that four hundred thousand dollars．It shows you how quickly a man may lose big money on a moderate line．My main position was absolutely correct and I benefited by an accident of a nature diametrically opposite to the considerations that led me to take the position I did in stocks and wheat．Observe，please，that the speculative line of least resistance again demonstrated its value to a trader．Prices went as I expected，notwithstanding the unexpected market factor introduced by the German note．If things had turned out as I had figured I would have been 100 per cent right in all three of my lines，for with peace stocks and wheat would have gone down and cotton would have gone kiting up．I would have cleaned up in all three．Irrespective of peace or war，I was right in my position on the stock market and in wheat and that is why the unlooked-for event helped．In cotton I based my play on something that might happen outside of the market—that is，I bet on Mr．Wilson's success in his peace negotiations．It was the German military leaders who made me lose the cotton bet．

When I returned to New York early in 1917 I paid back all the money I owed，which was over a million dollars．It was a great pleasure to me to pay my debts．I might have paid it back a few months earlier，but I didn't for a very simple reason．I was trading actively and successfully and I needed all the capital I had．I owed it to myself as well as to the men I considered my creditors to take every advantage of the wonderful markets we had in 1915 and 1916．I knew that I would make a great deal of money and I wasn't worrying because I was letting them wait a few months longer for money many of them never expected to get back．I did not wish to pay off my obligations in driblets or to one man at a time，but in full to all at once．So as long as the market was doing all it could for me I just kept on trading on as big a scale as my resources permitted．

I wished to pay interest，but all those creditors who had signed releases positively refused to accept it．The man I paid off the last of all was the chap I owed the eight hundred dollars to，who had made my life a burden and had upset me until I couldn't trade．I let him wait until he heard that I had paid off all the others．Then he got his money．I wanted to teach him to be considerate the next time somebody owed him a few hundreds．

And that is how I came back．

After I paid off my debts in full I put a pretty fair amount into annuities．I made up my mind I wasn't going to be strapped and uncomfortable and minus a stake ever again．Of course，after I married I put some money in trust for my wife．And after the boy came I put some in trust for him．

The reason I did this was not alone the fear that the stock market might take it away from me，but because I knew that a man will spend anything he can lay his hands on．By doing what I did my wife and child are safe from me．

More than one man I know has done the same thing，but has coaxed his wife to sign off when he needed the money，and he has lost it．But I have fixed it up so that no matter what I want or what my wife wants，that trust holds．It is absolutely safe from all attacks by either of us；safe from my market needs；safe even from a devoted wife's love．I'm taking no chances！