Part 11

“Who put up a job?” I asked.

“Somebody!”

“Who did they put it up on?” I asked.

“Some friends of yours were in it as sure as pop,” he said.

But I told him, “You know very well that I play a lone hand. Everybody in this town knows that. They’ve known it ever since I started trading in stocks. Now I want to give you some friendly advice: you just send and get that money for me. I don’t want to be disagreeable. Just do what I tell you.”

“I won’t pay it. It was a rigged-up transaction,” he yelled.

I got tired of his talk. So I told him: “You’ll pay it to me right now and here.”

Well, he blustered a little more and accused me flatly of being the guilty thimblerigger; but he finally forked over the cash. The others were not so rambunctious. In one office the manager had been studying these inactive-stock plays of mine and when he got my order he actually bought the stock for me and then some for himself in the Little Board, and he made some money. These fellows didn’t mind being sued by customers on charges of fraud, as they generally had a good technical legal defense ready. But they were afraid I’d attach the furniture--the money in the bank I couldn’t because they took care not to have any funds exposed to that danger. It would not hurt them to be known as pretty sharp, but to get a reputation for welshing was fatal. For a customer to lose money at his broker’s is no rare event. But for a customer to make money and then not get it is the worst crime on the speculators’ statute books.

I got my money from all; but that ten-point jump put an end to the pleasing pastime of skinning skinners. They were on the lookout for the little trick that they themselves had used to defraud hundreds of poor customers. I went back to my regular trading; but the market wasn’t always right for my system--that is, limited as I was by the size of the orders they would take, I couldn’t make a killing.

I had been at it over a year, during which I used every device that I could think of to make money trading in those wire houses. I had lived very comfortably, bought an automobile and didn’t limit myself about my expenses. I had to make a stake, but I also had to live while I was doing it. If my position on the market was right I couldn’t spend as much as I made, so that I’d always be saving some. If I was wrong I didn’t make any money and therefore couldn’t spend. As I said, I had saved up a fair-sized roll, and there wasn’t so much money to be made in the five wire houses; so I decided to return to New York.

I had my own automobile and I invited a friend of mine who also was a trader to motor to New York with me. He accepted and we started. We stopped at New Haven for dinner. At the hotel I met an old trading acquaintance, and among other things he told me there was a shop in town that had a wire and was doing a pretty good business.

We left the hotel on our way to New York, but I drove by the street where the bucket shop was to see what the outside looked like. We found it and couldn’t resist the temptation to stop and have a look at the inside. It wasn’t very sumptuous, but the old blackboard was there, and the customers, and the game was on.

The manager was a chap who looked as if he had been an actor or a stump speaker. He was very impressive. He’d say good morning as though he had discovered the morning’s goodness after ten years of searching for it with a microscope and was making you a present of the discovery as well as of the sky, the sun and the firm’s bank roll. He saw us come up in the sporty-looking automobile, and as both of us were young and careless--I don’t suppose I looked twenty--he naturally concluded we were a couple of Yale boys. I didn’t tell him we weren’t. He didn’t give me a chance, but began delivering a speech. He was very glad to see us. Would we have a comfortable seat? The market, we would find, was philanthropically inclined that morning; in fact, clamoring to increase the supply of collegiate pocket money, of which no intelligent undergraduate ever had a sufficiency since the dawn of historic time. But here and now, by the beneficence of the ticker, a small initial investment would return thousands. More pocket money than anybody could spend was what the stock market yearned to yield.

Well, I thought it would be a pity not to do as the nice man of the bucket shop was so anxious to have us do, so I told him I would do as he wished, because I had heard that lots of people made lots of money in the stock market.

I began to trade, very conservatively, but increasing the line as I won. My friend followed me.

We stayed overnight in New Haven and the next morning found us at the hospitable shop at five minutes to ten. The orator was glad to see us, thinking his turn would come that day. But I cleaned up within a few dollars of fifteen hundred. The next morning when we dropped in on the great orator, and handed him an order to sell five hundred Sugar he hesitated, but finally accepted it--in silence! The stock broke over a point and I closed out and gave him the ticket. There was exactly five hundred dollars coming to me in profits, and my five hundred dollar margin. He took twenty fifties from the safe, counted them three times very slowly, then he counted them again in front of me. It looked as if his fingers were sweating mucilage the way the notes seemed to stick to him, but finally he handed the money to me. He folded his arms, bit his lower lip, kept it bit, and stared at the top of a window behind me.

I told him I’d like to sell two hundred Steel. But he never stirred. He didn’t hear me. I repeated my wish, only I made it three hundred shares. He turned his head. I waited for the speech. But all he did was to look at me. Then he smacked his lips and swallowed--as if he was going to start an attack on fifty years of political misrule by the unspeakable grafters of the opposition.

Finally he waved his hand toward the yellow-backs in my hand and said, “Take away that bauble!”

“Take away what?” I said. I hadn’t quite understood what he was driving at.

“Where are you going, student?” He spoke very impressively.

“New York,” I told him.

“That’s right,” he said, nodding about twenty times. “That is ex-actly right. You are going away from here all right, because now I know two things--two, student! I know what you are not, and I know what you are. Yes! Yes! Yes!”

“Is that so?” I said very politely.

“Yes. You two--” He paused; and then he stopped being in Congress and snarled: “You two are the biggest sharks in the United States of America! Students? Ye-eh! You must be Freshmen! Ye-eh!”

We left him talking to himself. He probably didn’t mind the money so much. No professional gambler does. It’s all in the game and the luck’s bound to turn. It was his being fooled in us that hurt his pride.

That is how I came back to Wall Street for a third attempt. I had been studying, of course, trying to locate the exact trouble with my system that had been responsible for my defeats in A. R. Fullerton & Co.’s office. I was twenty when I made my first ten thousand, and I lost that. But I knew how and why--because I traded out of season all the time; because when I couldn’t play according to my system, which was based on study and experience, I went in and gambled. I hoped to win, instead of knowing that I ought to win on form. When I was about twenty-two I ran up my stake to fifty thousand dollars; I lost it on May ninth. But I knew exactly why and how. It was the laggard tape and the unprecedented violence of the movements that awful day. But I didn’t know why I had lost after my return from St. Louis or after the May ninth panic. I had theories--that is, remedies for some of the faults that I thought I found in my play. But I needed actual practice.

There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!

The average ticker hound--or, as they used to call him, tape-worm--goes wrong, I suspect, as much from over-specialization as from anything else. It means a highly expensive inelasticity. After all, the game of speculation isn’t all mathematics or set rules, however rigid the main laws may be. Even in my tape reading something enters that is more than mere arithmetic. There is what I call the behavior of a stock, actions that enable you to judge whether or not it is going to proceed in accordance with the precedents that your observation has noted. If a stock doesn’t act right don’t touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.