雙語·股票大作手回憶錄 第十八章

HISTORY repeats itself all the time in Wall Street．Do you remember a story I told you about covering my shorts at the time Stratton had corn cornered？Well，another time I used practically the same tactics in the stock market．The stock was Tropical Trading．I have made money bulling it and also bearing it．It always was an active stock and a favourite with adventurous traders．The inside coterie has been accused time and again by the newspapers of being more concerned over the fluctuations in the stock than with encouraging permanent investment in it．The other day one of the ablest brokers I know asserted that not even Daniel Drew in Erie or H．O．Havemeyer in Sugar developed so perfect a method for milking the market for a stock as President Mulligan and his friends have done in Tropical Trading．Many times they have encouraged the bears to sell TT short and then have proceeded to squeeze them with business-like thoroughness．There was no more vindictiveness about the process than is felt by a hydraulic press—or no more squeamishness，either．

Of course，there have been people who have spoken about certain“unsavory incidents”in the market career of TT stock．But I dare say these critics were suffering from the squeezing．Why do the room traders，who have suffered so often from the loaded dice of the insiders，continue to go up against the game？Well，for one thing they like action and they certainly get it in Tropical Trading．No prolonged spells of dulness．No reasons asked or given．No time wasted．No patience strained by waiting for the tipped movement to begin．Always enough stock to go around—except when the short interest is big enough to make the scarcity worth while．One born every minute！

It so happened some time ago that I was in Florida on my usual winter vacation．I was fishing and enjoying myself with out any thought of the markets excepting when we received a batch of newspapers．One morning when the semi-weekly mail came in I looked at the stock quotations and saw that Tropical Trading was selling at 155．The last time I'd seen a quotation in it，I think，was around 140．My opinion was that we were going into a bear market and I was biding my time before going short of stocks．But there was no mad rush．That was why I was fishing and out of hearing of the ticker．I knew that I'd be back home when the real call came．In the meanwhile nothing that I did or failed to do would hurry matters a bit．

The behaviour of Tropical Trading was the outstanding feature of the market，according to the newspapers I got that morning．It served to crystallise my general bearishness because I thought it particularly asinine for the insiders to run up the price of TT in the face of the heaviness of the general list．There are times when the milking process must be suspended．What is abnormal is seldom a desirable factor in a trader's calculations and it looked to me as if the marking up of that stock were a capital blunder．Nobody can make blunders of that magnitude with impunity；not in the stock market．

After I got through reading the newspapers I went back to my fishing but I kept thinking of what the insiders in Tropical Trading were trying to do．That they were bound to fail was as certain as that a man is bound to smash himself if he jumps from the roof of a twenty-story building without a parachute．I couldn't think of anything else and finally I gave up trying to fish and sent off a telegram to my brokers to sell 2000 shares of TT at the market．After that I was able to go back to my fishing．I did pretty well．

That afternoon I received the reply to my telegram by special courier．My brothers reported that they had sold the 2000 shares of Tropical Trading at 153．So far so good．I was selling short on a declining market，which was as it should be．But I could not fish any more．I was too far away from a quotation board．I discovered this after I began to think of all the reasons why Tropical Trading should go down with the rest of the market instead of going up on inside manipulation．I therefore left my fishing camp and returned to Palm Beach；or，rather，to the direct wire to New York．

The moment I got to Palm Beach and saw what the misguided insiders were still trying to do，I let them have a second lot of 2000 TT．Back came the report and I sold another 2000 shares．The market behaved excellently．That is，it declined on my selling．Everything being satisfactory I went out and had a chair ride．But I wasn't happy．The more I thought the unhappier it made me to think that I hadn't sold more．So back I went to the broker's office and sold another 2000 shares．

I was happy only when I was selling that stock．Presently I was short 10,000 shares．Then I decided to return to New York．I had business to do now．My fishing I would do some other time．

When I arrived in New York I made it a point to get a line on the company's business，actual and prospective．What I learned strengthened my conviction that the insiders had been worse than reckless in jacking up the price at a time when such an advance was not justified either by the tone of the general market or by the company's earnings．

The rise，illogical and ill-timed though it was，had developed some public following and this doubtless encouraged the insiders to pursue their unwise tactics．Therefore I sold more stock．The insiders ceased their folly．So I tested the market again and again，in accordance with my trading methods，until finally I was short 30,000 shares of the stock of the Tropical Trading Company．By then the price was 133．

I had been warned that the TT insiders knew the exact whereabouts of every stock certificate in the Street and the precise dimensions and identity of the short interest as well as other facts of tactical importance．They were able men and shrewd traders．Altogether it was a dangerous combination to go up against．But facts are facts and the strongest of all allies are conditions．

Of course，on the way down from 153 to 133 the short interest had grown and the public that buys on reactions began to argue as usual：That stock had been considered a good purchase at 153 and higher．Now 20 points lower，it was necessarily a much better purchase．Same stock；same dividend rate；same officers；same business．Great bargain！

The public's purchases reduced the floating supply and the insiders，knowing that a lot of room traders were short，thought the time propitious for a squeezing．The price was duly run up to 150．I daresay there was plenty of covering but I stayed pat．Why shouldn't I ？The insiders might know that a short line of 30,000 shares had not been taken in but why should that frighten me？The reasons that had impelled me to begin selling at 153 and keep at it on the way down to 133，not only still existed but were stronger than ever．The insiders might desire to force me to cover but they adduced no convincing arguments．Fundamental conditions were fighting for me．It was not difficult to be both fearless and patient．A speculator must have faith in himself and in his judgment．The late Dickson G．Watts，ex-President of the New York Cotton Exchange and famous author of“Speculation as a Fine Art，”says that courage in a speculator is merely confidence to act on the decision of his mind．With me，I cannot fear to be wrong because I never think I am wrong until I am proven wrong．In fact，I am uncomfortable unless I am capitalising my experience．The course of the market at a given time does not necessarily prove me wrong．It is the character of the advance—or of the decline—that determines for me the correctness or the fallacy of my market position．I can only rise by knowledge．If I fall it must be by my own blunders．

There was nothing in the character of the rally from 133 to 150 to frighten me into covering and presently the stock，as was to be expected，started down again．It broke 140 before the inside clique began to give it support．Their buying was coincident with a flood of bull rumors about the stock．The company，we heard，was making perfectly fabulous profits，and the earnings justified an increase in the regular dividend rate．Also，the short interest was said to be perfectly huge and the squeeze of the century was about to be inflicted on the bear party in general and in particular on a certain operator who was more than over-extended．I couldn't begin to tell you all I heard as they ran the price up ten points．

The manipulation did not seem particularly dangerous to me but when the price touched 149 I decided that it was not wise to let the Street accept as true all the bull statements that were floating around．Of course，there was nothing that I or any other rank outsider could say that would carry conviction either to the frightened shorts or to those credulous customers of commission houses that trade on hearsay tips．The most effective retort courteous is that which the tape alone can print．People will believe that when they will not believe an affidavit from any living man，much less one from a chap who is short 30,000 shares．So I used the same tactics that I did at the time of the Stratton corner in corn，when I sold oats to make the traders bearish on corn．Experience and memory again．

When the insiders jacked up the price of Tropical Trading with a view to frightening the shorts I didn't try to check the rise by selling that stock．I was already short 30,000 shares of it which was as big a percentage of the floating supply as I thought wise to be short of．I did not propose to put my head into the noose so obligingly held open for me—the second rally was really an urgent invitation．What I did when TT touched 149 was to sell about 10,000 shares of Equatorial Commercial Corporation．This company owned a large block of Tropical Trading．

Equatorial Commercial，which was not as active a stock as TT，broke badly on my selling，as I had foreseen；and，of course，my purpose was achieved．When the traders—and the customers of the commission houses who had listened to the uncontradicted bull dope on TT—saw that the rise in Tropical synchronised with heavy selling and a sharp break in Equatorial，they naturally concluded that the strength of TT was merely a smoke-screen—a manipulated advance obviously designed to facilitate inside liquidation in Equatorial Commercial，which was largest holder of TT stock．It must be both long stock and inside stock in Equatorial，because no outsider would dream of selling so much short stock at the very moment when Tropical Trading was so very strong．So they sold Tropical Trading and checked the rise in that stock，the insiders very properly not wishing to take all the stock that was pressed for sale．The moment the insiders took away their support the price of TT declined．The traders and principal commission houses now sold some Equatorial also and I took in my short line in that at a small profit．I hadn't sold it to make money out of the operation but to check the rise in TT．

Time and again the Tropical Trading insiders and their hard-working publicity man flooded the Street with all manner of bull items and tried to put up the price．And every time they did I sold Equatorial Commercial short and covered it with TT reacted and carried E C with it．It took the wind out of the manipulators' sails．The price of TT finally went down to 125 and the short interest really grew so big that the insiders were enabled to run it up 20 or 25 points．This time it was a legitimate enough drive against an over-extended short interest；but while I foresaw the rally I did not cover，not wishing to lose my position．Before Equatorial Commercial could advance in sympathy with the rise in TT I sold a raft of it short—with the usual results．This gave the lie to the bull talk in TT which had got quite boisterous after the latest sensational rise．

By this time the general market had grown quite weak．As I told you，it was the conviction that we were in a bear market that started me selling TT short in the fishing-camp in Florida．I was short of quite a few other stocks but TT was my pet．Finally，general conditions proved too much for the inside clique to defy and TT hit the toboggan slide．It went below 120 for the first time in years；then below 110；below par；and still I did not cover．One day when the entire market was extremely weak Tropical Trading broke 90 and on the demoralization I covered．Same old reason！I had the opportunity—the big market and the weakness and the excess of sellers over buyers．I may tell you，even at the risk of appearing to be monotonously bragging of my cleverness，that I took in my 30,000 shares of TT at practically the lowest prices of the movement．But I wasn't thinking of covering at the bottom．I was intent on turning my paper profits into cash without losing much of the profit in the changing．

I stood pat throughout because I knew my position was sound．I wasn't bucking the trend of the market or going against basic conditions but the reverse，and that was what made me so sure of the failure of an over-confident inside clique．What they tried to do others had tried before and it had always failed．The frequent rallies，even when I knew as well as anybody that they were due，could not frighten me．I knew I'd do much better in the end by staying pat than by trying to cover to put out a new short line at a higher price．By sticking to the position that I felt was right I made over a million dollars．I was not indebted to hunches or to skilful tape reading or to stubborn courage．It was a dividend declared by my faith in my judgment and not by my cleverness or by my vanity．Knowledge is power and power need not fear lies—not even when the tape prints them．The retraction follows pretty quickly．

A year later，TT was jacked up again to 150 and hung around there for a couple of weeks．The entire market was entitled to a good reaction for it had risen uninterruptedly and it did not bull any longer．I know because I tested it．Now，the group to which TT belonged had been suffering from very poor business and I couldn't see anything to bull those stocks on anyhow，even if the rest of the market were due for a rise，which it wasn't．So I began to sell Tropical Trading．I intended to put out 10,000 shares in all．The price broke on my selling．I couldn't see that there was any support whatever．Then suddenly，the character of the buying changed．

I am not trying to make myself out a wizard when I assure you that I could tell the moment support came in．It instantly struck me that if the insiders in that stock，who never felt a moral obligation to keep the price up，were now buying the stock in the face of a declining general market there must be a reason．They were not ignorant asses nor philanthropists nor yet bankers concerned with keeping the price up to sell more securities over the counter．The price rose notwithstanding my selling and the selling of others．At 153 I covered my 10,000 shares and at 156 I actually went long because by that time the tape told me the line of least resistance was upward．I was bearish on the general market but I was confronted by a trading condition in a certain stock and not by a speculative theory in general．The price went out of sight，above 200．It was the sensation of the year．I was flattered by reports spoken and printed that I had been squeezed out of eight or nine millions of dollars．As a matter of fact，instead of being short I was long of TT all the way up．In fact，I held on a little too long and let some of my paper profits get away．Do you wish to know why I did？Because I thought the TT insiders would naturally do what I would have done had I been in their place．But that was something I had no business to think because my business is to trade—that is，to stick to the facts before me and not to what I think other people ought to do．