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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 go. 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 too, 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
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