Stock market

“ In this way has the Stock Market been established and forced from its original situation by a set of jobbers and brokers, who are all, it will be seen, interested in keeping their transactions from the eye of the public. These men being always ready either to buy or sell, renders it easy for the brokers to get their business done, having no trouble but merely stepping into the Stock Exchange. ”

“ In margin-trading on the New York Stock Exchange, New York Curb, Boston Stock Exchange, Boston Curb, Chicago Board of Trade, Chicago Stock Exchange, New York Cotton Exchange and kindred institutions, experience among stock-brokers proves that if you stick to the game you have only one chance—YOU CAN LOSE.
In railroad, industrial and mining-stock speculation, where you buy the shares outright and hold them for stock market profits, you have two chances; if you are of the average and your operations are for a period continuous—YOU CAN BREAK EVEN IF YOU ARE VERY LUCKY, OR LOSE IF YOU ARE NOT ”

“ You know, Monsieur, that, in the stock-market especially, and more or less in every other kind of speculation, the greater part of the transactions are fictitious, to a certain extent. Par exemple: you buy or you sell so many barrels of flour, at such a price, on time, as it is called,—that is, you engage to receive, or to deliver, so many barrels, at the prices and in the times agreed upon, in the hope, that, before the period of your contract comes round, prices will have so varied as to enable you to buy, or sell, the quantity bargained for, upon terms that will give you a profit. ”

“ Perhaps, however, the Stock Exchange can best be defined and described as a market. Just as Smithfield is the market for meat and Covent Garden the market for flowers, fruit, and vegetables, so is the Stock Exchange the market for stocks and shares. ”

“ It will at once be seen that although the Stock Exchange may be defined as a mere market, the wares that are displayed and dealt in are of such importance as to entitle it to the more ambitious definitions with which it has been exalted. It is worthy of being defined as the mart of the world, because these wares represent property in every part of the world, and because the orders which are executed in this mere market emanate from all over the world. The business of the Stock Exchange is more varied and cosmopolitan than that of any other mart, except, perhaps, the Money Market. ”

“ There are now six industrial companies with an aggregate capital of 171,927,540 shares outstanding; and from the side lines it looks as if there ought to be time enough to start another boom when the stock market gets over its present case of indigestion.
In the final analysis the following essentials should be constantly borne in mind: The stock and grain markets are always capable of playing new tricks on you—of doing things you never dreamed of. ”

“ If he wins, instead of withdrawing the original capital, with perhaps a little more, he usually stakes the whole amount on every venture until it is lost.
Viewing the stock market calmly in the perspective, it is not a question whether stocks will rise or fall ”

“ In large cities the brokers naturally unite for convenience of business in the so-called stock exchange, in which the market price of all current forms of indebtedness or deferred payments is fixed from day to day, or from hour to hour, by the higgling of the market, just as the price of produce is fixed in the produce exchange. Naturally, as in the case of produce, a fictitious business, purely speculative, grows up around the legitimate dealing [pg 163] in stocks and bonds. ”

“ We build railways, put millions into steel plants, "boom" land sites, and form combinations of all kinds, employing the credit facilities granted by the banks, or throwing the securities on the stock market. We "water" the stock or, if that be forbidden by law, we drive the market quotations to a high point, because we think that this is warranted by prospective earnings. ”

“ The answer is, they are selling us out; and the proof is published daily, in the stock market quotations for the securities of these corporations. That is one kind of proof to which there is no answer, Judd; other people may be fooled about money matters, but the men who buy and sell in Wall Street are not fooled for long; they watch earnings, and, automatically every stock takes the ranking to which its dividends entitle it. ”

“ The old split-up, consolidation and stock-dividend chestnuts are being industriously warmed over and the few scattering traders who saved something out of the recent smash are beginning to nibble at the bait. All of which shows that people are quick to forget their stock market troubles and to return for more punishment. ”

“ The stock market might have given me a twist but you know the old saying—you can’t keep a good man in glass houses. Right now I know where there’s a package of money all wrapped up and waiting for me to call around and collect it. ”

“ The Government Funds, stocks and shares in all companies, bonds, foreign and otherwise, Corporation Stocks, &c., are all termed "securities." A convertible se- curity is one which may be sold in the open market, there being no restriction upon the persons who may hold it.
We will now endeavour to put before the reader some account of the various "securities" in which the public invest their money accord- ing to individual choice, and which (with the exception of mortgage on real property-land or houses) may be bought and sold in the stock- market through the agency of a banker or broker. ”

“ If the market was for any reason active, the brokers and their agents were apt to be more numerous than if it were dull and the trading indifferent. A gong sounded the call to trading at ten o’clock, and if there was a noticeable rise or decline in a stock or a group of stocks, you were apt to witness quite a spirited scene. Fifty to a hundred men would shout, gesticulate, shove here and there in an apparently aimless manner; endeavoring to take advantage of the stock offered or called for. ”

“ Every day we hear of combinations, Farmers’ Alliances, rural co-operative movements, etc., each designed to regulate the market for eggs, butter, potatoes, and such things, and each having for its purpose the very functions which govern a Stock Exchange in its own field—namely, the establishment of a fair price under the nearest possible approach to ideal conditions. ”

“ The outside public had for a long time been holding aloof from the stock market, owing both to the railway and industrial prosecutions, and hostile State legislation, and the great activity in trade, and in land, mining, and other speculation calling for a great deal of money. ”

“ What are the further obvious deductions from the large increase of speculation in public securities thus suggested, to confine ourselves to one kind of market? If the business of the Stock markets were reduced within safe and legitimate limits, that is, was confined to operations of a bona fide investment nature, it is certain that no more than one-tenth, it might be one-twentieth, of the brokers would be required to execute properly all the orders that come into the markets. ”

“ In this splendid work of conquering a continent the Stock Exchange has kept pace with the march of industry. It has supplied the one great central market for the expression of the country’s progress as measured by the country’s securities, and it will continue to do so as long as an evergreen faith in America exists among its people. ”

“ As a matter of Stock Exchange experience such a condition seldom arises, because the Stock Exchange discounts the future, foresees those economic conditions that spell prosperity for the country, and advances the prices of securities on a money market that has not yet felt the demands of improved conditions. ”

“ The market invariably puts the price of a stock at the exact level which it thinks it is worth, which means that, in the market's opinion, it is just as likely to rise as to fall, and for that reason the price for a put option is the same as that for a call option. ”

“ They don't play little horses and other games in public for francs, like the French, for the law forbids it, but I don't believe that any one, except we bankers and brokers, realizes how widely exists the habit of playing the stock-market. Thousands of people, big and little, sanctimonious and highly respectable, put up their margins and reap their profits or their losses. ”

“ A great majority of them will fling their stock instantly on the market, determined to realise whatever they can on it. That stock my people will purchase, and at once those who sold are out of the running. ”

“ In fine, the ultimate purpose in this regard of all the promotion machinery of Wall Street—the machinery that has been putting out billions of dollars' worth of securities to investors—is to place stock where it will "stay put," that is, not come out on the open market again to embarrass the interests that are behind the enterprise, and who for a long period are compelled to support the market. ”

“ The many thousands of brokerage offices throughout the country were jammed to the doors by eager onlookers and participants who devoted themselves exclusively to the market from the opening to the close. Office boys, elevator men, manicures, hotel waiters, hairdressers, cab drivers, and even rural farmers initiated themselves into the game and discussed mergers, split-ups, stock dividends, and all such subjects in high finance with more profuseness and profundity than was ever displayed at a bankers’ convention. ”

“ We recognize a short-loan market, a stock exchange, a number of "markets" where lenders and borrowers are brought together by the aid of various intermediaries, such as banks, bill brokers, and stock jobbers, who correspond to dealers in commodities. ”

“ One man, or two, or a hundred cannot make a market, because the immense volume and variety of these securities make it impossible for any unorganized handful of brokers and dealers to determine a fair market price.41 What is required, and what the man whose capital is wanted insists upon, is an organized body of brokers, speculators, and investors competing keenly, seeking to buy cheap and sell dear, gathering and disseminating all the news, and so sharpening the judgment and stimulating the higgling of buyers and sellers as to bring prices to their legitimate level and give them stability. ”

“ You should sell stocks when the market price is too high. That is a general rule, but it is necessary for you to study all the influences affecting stock prices to be able to decide more accurately when you should sell your stocks. We give you, in future chapters, much more information on judging the markets.
Another general rule, is to sell stocks when nearly everybody is buying them. It is a well known fact that the great majority of people buy stocks near the top and sell near the bottom. ”

“ If the market value-perhaps the closest approximation to the true value in money-of the corporate property as a whole were inquired into, the market value of the capital stock would become a controlling factor in fixing the value of the property. * * * The market value of the capital stock, it is urged, has no necessary relation to the value of the tangible property of the corporation. ”

“ As to "big men" meeting to determine the course of the stock market, that is one of those legends and superstitions inherited from olden days many years ago when conditions were totally different from what they are now, and when the scale of things and morals, too, were different, which it is hard to kill. ”

“ I concede, sir, that, in the ordinary mutations of business and commerce in all seasons, and daily, stock markets rise and fall; but behold this country as it stands as to honest material of just speculation on exchange! ”

“ While the Stock Exchange is in theory a private institution, it fulfills in fact a public function of great national importance.
That function is to afford a free and fair, broad and genuine market for securities and particularly for the tokens of the industrial wealth and enterprise of the country, i.e., stocks and bonds of corporations. ”

“ Loans of stock and sales of stock appear alike in the transactions of the Clearing House. Moreover, apart from the necessities of the bears for stocks to deliver, we have the necessities of the [Pg 372] bulls for money to carry their stocks. If a broker who has borrowed largely from the banks finds his customers turning to the bear side of the market, he has an excess of funds. ”

“ Preference stock may be purchased in any amount in the market, and the interest war- rants are sent half-yearly to the registered holders.
Ordinary stocks depend on the profits for the year for the interest they yield, and thus afford a wide field for speculation. The stocks of the great English lines may be relied upon as a good investment, the profits being steady and sufficient to assure a fair amount of interest after satisfying the prior claims of debenture and preference stocks. ”

“ The market rose to such heights that the selling price of securities listed on the New York Stock Exchange—to say nothing of the untold billions listed on other exchanges—reached a figure far in excess of all the money in the world. Though it was reiterated time and time again that customers’ accounts with brokers were amply protected, they were of course margined with other securities, and thus the pyramid grew until it staggered the imagination even of those who built it. ”

“ At each of the posts, and along the north wall, the specialists in these various groups of stocks are at work before the opening of the market, entering the day’s orders in their books, some with the rapid energy that betokens an active opening, others with an indifference that spells dulness in their particular line. ”