Wall Street - Conclusion
( Originally Published 1939 )
IN the foregoing chapters we observed that a variety of opinions during normal times, through their effect upon supply and demand, were responsible for the rise and fall of prices. That during abnormal times, such as during stock market crashes, certain conditions bring about abnormal supplies, and as this supply exceeds the demand, prices fall lower and lower.
We saw that the business cycle has been revolving for hundreds of years, that its motive power is generated by production and consumption becoming unbalanced.
Some of the signs which denoted that major changes in business activity was approaching, and that the cycle was preparing for another revolution in 1929, was pointed out.
The evils of waiting until stocks were at their upper levels were also discussed, as well as the methods of obtaining information and the value of it.
Doctor Evan's transactions revealed the futility of the amateur attempting to emulate the practices of a professional; and how simple was the Doctor's first transaction, when he was satisfied with a reasonable profit.
The necessity of discriminating between two stocks, engaged in the same line of endeavour, was witnessed by an actual example.
One of the most accurate methods of judging balance sheets was discussed, as well as the investor being cautioned as to how to measure earnings against assets.
The evils of pool operations and boiler rooms were pointed out in detail, and the investor need only use common sense to avoid the enticing medium of tips and other propaganda.
The Security Exchange Act together with the recent reorganization of the Exchange was also discussed.
The brief history of the Street and the activities of some of the country's pioneers should enrich any and all who read it.
No less valuable is a fundamental understanding of money and the rudiments of foreign exchange.
The writer has always believed there was a distinct need for a set of questions and answers as they applied to Wall Street terminology and many of its ambiguous phrases. A miniature library has therefore been carefully compiled with the thought that many things vital to the investor's interest can be better and more easily grasped by questions and answers than they can be in a narrative.
When the occasion arises to use the library as it refers to these questions and answers, it is also advisable to review the text or narrative in which such subjects appear. The index at the back of the book will furnish the number of the page in each instance.
Following this chapter a number of tables and directories have been compiled. It is believed that these directories can be used to advantage. For instance, they provide a quick and ready reference as to the location of Stock Exchanges in North America, as well as a list of New York Stock Exchange and Curb members in New York City. Investors throughout the nation are often handicapped in their efforts to make inquiries regarding their securities, and it is believed that such a directory of exchanges and exchange members as are hereafter compiled will greatly facilitate their efforts.
The man or woman who wants to succeed in the stock market so much that they are ready and willing to do what is necessary to achieve success, will be the person who digs down to the bedrock causes of the successful experience of others. In doing this, they will find among other things, that the person who gets THERE, in the stock market, always knows definitely where THERE is.
Such a person knows that you cannot ride overnight to riches; that you must follow certain rules and conform to certain principles; that you must acquire certain information; and that when a decision is to be made, it must be made without hesitancy.
This is the formula used by the large operators who make money, and it is available for the small investor with his $5,000, his $1,000, or his $500 for that matter. As I previously pointed out, the same source of information which the large operator uses can be obtained with equal accuracy by the small.
Thus it is possible by judicious investing, initative and courage, for the small investor to make money and continue to make money in Wall Street. He must curb his impatience, however, and realize that fortunes are not to be made overnight; that he must follow the same highway the large operator travels, and when he does, he will find himself building a secure foundation.
Villages are made from hamlets—towns from villages—cities from towns—and empires from cities. This process can be symbolically applied to those who would earn a fortune in Wall Street.
This narrow streets with its towering skyscrapers, its hurrying throngs, its immeasurable wealth, is a hard and jealous mistress. Nevertheless, she is glorious, as she typifies the American people's dominant spirit of character, vision, perceptivity and courage.