双语·股票大作手回忆录 第十六章

TIPS！How people want tips！They crave not only to get them but to give them．There is greed involved，and vanity．It is very amusing，at times，to watch really intelligent people fish for them．And the tip-giver need not hesitate about the quality，for the tip-seeker is not really after good tips，but after any tip．If it makes good，fine！If it doesn't，better luck with the next．I am thinking of the average customer of the average commission house．There is a type of promoter or manipulator that believes in tips first，last and all the time．A good flow of tips is considered by him as a sort of sublimated publicity work，the best merchandising dope in the world，for，since tip-seekers and tip-takers are invariably tip-passers，tip-broadcasting becomes a sort of endless—chain advertising．The tipster-promoter labours under the delusion that no human being breathes who can resist a tip if properly delivered．He studies the art of handing them out artistically．

I get tips by the hundreds every day from all sorts of people．I'll tell you a story about Borneo Tin．You remember when the stock was brought out？It was at the height of the boom．The promoter's pool had taken the advice of a very clever banker and decided to float the new company in the open market at once instead of letting an underwriting syndicate take its time about it．It was good advice．The only mistake the members of the pool made came from inexperience．They did not know what the stock market was capable of doing during a crazy boom and at the same time they were not intelligently liberal．They were agreed on the need of marking up the price in order to market the stock，but they started the trading at a figure at which the traders and the speculative pioneers could not buy it without misgivings．

By rights the promoters ought to have got stuck with it，but in the wild bull market their hoggishness turned out to be rank conservatism．The public was buying anything that was adequately tipped．Investments were not wanted．The demand was for easy money；for the sure gambling profit．Gold was pouring into this country through the huge purchases of war material．They tell me that the promoters，while making their plans for bringing out Borneo stock，marked up the opening price three different times before their first transaction was officially recorded for the benefit of the public．

I had been approached to join the pool and I had looked into it but I didn't accept the offer because if there is any market manoeuvring to do，I like to do it myself．I trade on my own information and follow my own methods．When Borneo Tin was brought out，knowing what the pool's resources were and what they had planned to do，and also knowing what the public was capable of，I bought ten thousand shares during the first hour of the first day．Its market début was successful at least to that extent．As a matter of fact the promoters found the demand so active that they decided it would be a mistake to lose so much stock so soon．They found out that I had acquired my ten thousand shares about at the same time that they found out that they would probably be able to sell every share they owned if they merely marked up the price twenty-five or thirty points．They therefore concluded that the profit on my ten thousand shares would take too big a chunk out of the millions they felt were already as good as banked．So they actually ceased their bull operations and tried to shake me out．But I simply sat tight．They gave me up as a bad job because they didn't want the market to get away from them，and then they began to put up the price，without losing any more stock than they could help．

They saw the crazy height that other stocks rose to and they began to think in billions．Well，when Borneo Tin got up to 120 I let them have my ten thousand shares．It checked the rise and the pool managers let up on their jacking-up process．On the next general rally they again tried to make an active market for it and disposed of quite a little，but the merchandising proved to be rather expensive．Finally they marked it up to 150．But the bloom was off the bull market for keeps，so the pool was compelled to market what stock it could on the way down to those people who love to buy after a good reaction，on the fallacy that a stock that has once sold at 150 must be cheap at 130 and a great bargain at 120．Also，they passed the tip first to the floor traders，who often are able to make a temporary market，and later to the commission houses．Every little helped and the pool was using every device known．The trouble was that the time for bulling stocks had passed．The suckers had swallowed other hooks．The Borneo bunch didn't or wouldn't see it．

I was down in Palm Beach with my wife．One day I made a little money at Gridley's and when I got home I gave Mrs．Livingston a five-hundred-dollar bill out of it．It was a curious coincidence，but that same night she met at a dinner the president of the Borneo Tin Company，a Mr．Wisenstein，who had become the manager of the stock pool．We didn't learn until some time afterward that this Wisenstein deliberately manoeuvred so that he sat next to Mrs．Livingston at dinner．

He laid himself out to be particularly nice to her and talked most entertainingly．In the end he told her，very confidentially，“Mrs．Livingston，I'm going to do something I've never done before．I am very glad to do it because you know exactly what it means．”He stopped and looked at Mrs．Livingston anxiously，to make sure she was not only wise but discreet．She could read it on his face，plain as print．But all she said was，“Yes．”

“Yes，Mrs．Livingston．It has been a very great pleasure to meet you and your husband，and I want to prove that I am sincere in saying this because I hope to see a great deal of both of you．I am sure I don't have to tell you that what I am going to say is strictly confidential！”Then he whispered，“If you will buy some Borneo Tin you will make a great deal of money．”

“Do you think so？”she asked．

“Just before I left the hotel，”he said，“I received some cables with news that won't be known to the public for several days at least．I am going to gather in as much of the stock as I can．If you get some at the opening tomorrow you will be buying it at the same time and at the same price as I．I give you my word that Borneo Tin will surely advance．You are the only person that I have told this to．Absolutely the only one ！”

She thanked him and then she told him that she didn't know anything about speculating in stocks．But he assured her it wasn't necessary for her to know any more than he had told her．To make sure she heard it correctly he repeated his advice to her：

“All you have to do is to buy as much Borneo Tin as you wish．I can give you my word that if you do you will not lose a cent．I've never before told a woman—or a man，for that matter—to buy anything in my life．But I am so sure the stock won't stop this side of 200 that I'd like you to make some money．I can't buy all the stock myself，you know，and if somebody besides myself is going to benefit by the rise I'd rather it was you than some stranger．Much rather！I've told you in confidence because I know you won't talk about it．Take my word for it，Mrs．Livingston，and buy Borneo Tin！”

He was very earnest about it and succeeded in so impressing her that she began to think she had found an excellent use for the five hundred dollars I had given her that afternoon．That money hadn't cost me anything and was outside of her allowance．In other words，it was easy money to lose if the luck went against her．But he had said she would surely win．It would be nice to make money on her own hook—and tell me all about it afterwards．

Well，sir，the very next morning before the market opened she went into Harding's office and said to the manager：

“Mr．Haley，I want to buy some stock，but I don't want it to go in my regular account because I don't wish my husband to know anything about it until I've made some money．Can you fix it for me？”

Haley，the manager，said，“Oh，yes．We can make it a special account．What's the stock and how much of it do you want to buy？”

She gave him the five hundred dollars and told him，“Listen，please．I do not wish to lose more than this money．If that goes I don't want to owe you anything；and remember，I don't want Mr．Livingston to know anything about this．Buy me as much Borneo Tin as you can for the money，at the opening．”

Haley took the money and told her he'd never say a word to a soul，and bought her a hundred shares at the opening．I think she got it at 108．The stock was very active that day and closed at an advance of three points．Mrs．Livingston was so delighted with her exploit that it was all she could do to keep from telling me all about it．

It so happened that I had been getting more and more bearish on the general market．The unusual activity in Borneo Tin drew my attention to it．I didn't think the time was right for any stock to advance，much less one like that．I had decided to begin my bear operations that very day，and I started by selling about ten thousand shares of Borneo．If I had not I rather think the stock would have gone up five or six points instead of three．

On the very next day I sold two thousand shares at the opening and two thousand shares just before the close，and the stock broke to 102．

Haley，the manager of Harding Brothers' Palm Beach Branch，was waiting for Mrs．Livingston to call there on the third morning．She usually strolled in about eleven to see how things were，if I was doing anything．

Haley took her aside and said，“Mrs．Livingston，if you want me to carry that hundred shares of Borneo Tin for you you will have to give me more margin．”

“But I haven't any more，”she told him．

“I can transfer it to your regular account，”he said．

“No，”she objected，“because that way L．L．would learn about it．”

“But the account already shows a loss of—”he began．

“But I told you distinctly I didn't want to lose more than the five hundred dollars．I didn't even want to lose that，”she said．

“I know，Mrs．Livingston，but I didn't want to sell it without consulting you，and now unless you authorise me to hold it I'll have to let it go．”

“But it did so nicely the day I bought it，”she said，“that I didn't believe it would act this way so soon．Did you？”

“No，”answered Haley，“I didn't．”They have to be diplomatic in brokers' offices．

“What's gone wrong with it，Mr．Haley？”

Haley knew，but he could not tell her without giving me away，and a customer's business is sacred．So he said，“I don't hear anything special about it，one way or another．There she goes！That's low for the move！”and he pointed to the quotation board．

Mrs．Livingston gazed at the sinking stock and cried：“Oh，Mr．Haley！I didn't want to lose my five hundred dollars！What shall I do？”

“I don't know，Mrs．Livingston，but if I were you I'd ask Mr．Livingston．”

“Oh，no！He doesn't want me to speculate on my own hook．He's told me so．He'll buy or sell stock for me，if I ask him，but I've never before done trading that he did not know all about．I wouldn't dare tell him．”

“That's all right，”said Haley soothingly．“He is a wonderful trader and he'll know just what to do．”Seeing her shake her head violently he added devilishly：“Or else you put up a thousand or two to take care of your Borneo．”

The alternative decided her then and there．She hung about the office，but as the market got weaker and weaker she came over to where I sat watching the board and told me she wanted to speak to me．We went into the private office and she told me the whole story．So I just said to her：“You foolish little girl，you keep your hands off this deal．”

She promised that she would，and so I gave her back her five hundred dollars and she went away happy．The stock was par by that time．

I saw what had happened．Wisenstein was an astute person．He figured that Mrs．Livingston would tell one what he had told her and I'd study the stock．He knew that activity always attracted me and I was known to swing a pretty fair line．I suppose he thought I'd buy ten or twenty thousand shares．

It was one of the most cleverly planned and artistically propelled tips I've ever heard of．But it went wrong．It had to．In the first place，the lady had that very day received an unearned five hundred dollars and was therefore in a much more venturesome mood than usual．She wished to make some money all by herself，and womanlike dramatised the temptation so attractively that it was irresistible．She knew how I felt about stock speculation as practised by outsiders，and she didn't dare mention the matter to me．Wisenstein didn't size up her psychology right．

He also was utterly wrong in his guess about the kind of trader I was．I never take tips and I was bearish on the entire market．The tactics that he thought would prove effective in inducing me to buy Borneo—that is，the activity and the three-point rise—were precisely what made me pick Borneo as a starter when I decided to sell the entire market．

After I heard Mrs．Livingston's story I was keener than ever to sell Borneo．Every morning at the opening and every afternoon just before closing I let him have some stock regularly，until I saw a chance to take in my shorts at a handsome profit．

It has always seemed to me the height of damfoolishness to trade on tips．I suppose I am not built the way a tip-taker is．I sometimes think that tip-takers are like drunkards．There are some who can't resist the craving and always look forward to those jags which they consider indispensable to their happiness．It is so easy to open your ears and let the tip in．To be told precisely what to do to be happy in such a manner that you can eagily obey is the next nicest thing to being happy—which is a mighty long first step toward the fulfilment of your heart's desire．It is not so much greed made blind by eagerness as it is hope bandaged by the unwillingness to do any thinking．

And it is not only among the outside public that you find inveterate tip-takers．The professional trader on the floor of the New York Stock Exchange is quite as bad．I am definitely aware that no end of them cherish mistaken notions of me because I never give anybody tips．If I told the average man，“Sell yourself five thousand Steel！”he would do it on the spot．But if I tell him I am quite bearish on the entire market and give him my reasons in detail，he finds trouble in listening and after I'm done talking he will glare at me for wasting his time expressing my views on general conditions instead of giving him a direct and specific tip，like a real philanthropist of the type that is so abundant in Wall Street—the sort who loves to put millions into the pockets of friends，acquaintances and utter strangers alike．

The belief in miracles that all men cherish is born of immoderate indulgence in hope．There are people who go on hope sprees periodically and we all know the chronic hope drunkard that is held up before us as an exemplary optimist．Tip-takers are all they really are．

I have an acquaintance，a member of the New York Stock Exchange，who was one of those who thought I was a selfish，cold-blooded pig because I never gave tips or put friends into things．One day—this was some years ago—he was talking to a newspaper man who casually mentioned that he had had it from a good source that G．O．H．was going up．My broker friend promptly bought a thousand shares and saw the price decline so quickly that he was out thirty-five hundred dollars before he could stop his loss．He met the newspaper man a day or two later，while he still was sore．

“That was a hell of a tip you gave me，”he complained．

“What tip was that？”asked the reporter，who did not remember．

“About G．O．H．You said you had it from a good source．”

“So I did．A director of the company who is a member of the finance committee told me．”

“Which of them was it？”asked the broker vindictively．

“If you must know，”answered the newspaper man，“it was your own father-in-law，Mr．Westlake．”

“Why in Hades didn't you tell me you meant him！”yelled the broker．“You cost me thirty-five hundred dollars！”He didn't believe in family tips．The farther away the source the purer the tip．

Old Westlake was a rich and successful banker and promoter．He ran across John W．Gates one day．Gates asked him what he knew．“If you will act on it I'll give you a tip．If you won't I'll save my breath，”answered old Westlake grumpily．

“Of course I'll act on it，”promised Gates cheerfully．

“Sell Reading！There is a sure twenty-five points in it，and possibly more．But twenty-five absolutely certain，”said Westlake impressively．

“I'm much obliged to you，”and Bet-you-a-million Gates shook hands warmly and went away in the direction of his broker's office．

Westlake had specialized on Reading．He knew all about the company and stood in with the insiders so that the market for the stock was an open book to him and everybody knew it．Now he was advising the Western plunger to go short of it．

Well，Reading never stopped going up．It rose something like one hundred points in a few weeks．One day old Westlake ran smack up against John W．in the Street，but he made out he hadn't seen him and was walking on．John W．Gates caught up with him，his face all smiles and held out his hand．Old Westlake shook it dazedly．

“I want to thank you for that tip you gave me on Reading，”said Gates．

“I didn't give you any tip，”said Westlake，frowning．

“Sure you did．And it was a Jim Hickey of a tip too．I made sixty thousand dollars．”

“Made sixty thousand dollars？”

“Sure！Don't you remember？You told me to sell Reading；so I bought it！I've always made money coppering your tips，Westlake，”said John W．Gates pleasantly．“Always！”

Old Westlake looked at the bluff Westerner and presently remarked admiringly，“Gates，what a rich man I'd be if I had your brains！”

The other day I met Mr．W．A．Rogers，the famous cartoonist，whose Wall Street drawings brokers so greatly admire．His daily cartoons in the New York Herald for years gave pleasure to thousands．Well，he told me a story．It was just before we went to war with Spain．He was spending an evening with a broker friend．When he left he picked up his derby hat from the rack，at least he thought it was his hat，for it was the same shape and fitted him perfectly．

The Street at that time was thinking and talking of nothing but war with Spain．Was there to be one or not？If it was to be war the market would go down；not so much on our own selling as on pressure from European holders of our securities．If peace，it would be a cinch to buy stocks，as there had been considerable declines prompted by the sensational clamorings of the yellow papers．Mr．Rogers told me the rest of the story as follows：

“My friend，the broker，at whose house I had been the night before，stood in the Exchange the next day anxiously debating in his mind which side of the market to play．He went over the pros and cons，but it was impossible to distinguish which were rumours and which were facts．There was no authentic news to guide him．At one moment he thought war was inevitable，and on the next he almost convinced himself that it was utterly unlikely．His perplexity must have caused a rise in his temperature，for he took off his derby to wipe his fevered brow．He couldn't tell whether he should buy or sell．

“He happened to look inside of his hat．There in gold letters was the word WAR．That was all the hunch he needed．Was it not a tip from Providence via my hat？So he sold a raft of stock，war was duly declared，he covered on the break and made a killing．”And then W．A．Rogers finished，“I never got back that hat！”

But the prize tip story of my collection concerns one of the most popular members of the New York Stock Exchange，J．T．Hood．One day another floor trader，Bert Walker，told him that he had done a good turn to a prominent director of the Atlantic & Southern．In return the grateful insider told him to buy all the A．& S．he could carry．The directors were going to do something that would put the stock up at least twenty-five points．All the directors were not in the deal，but the majority would be sure to vote as wanted．

Bert Walker concluded that the dividend rate was going to be raised．He told his friend Hood and they each bought a couple of thousand shares of A．& S．The stock was very weak，before and after they bought，but Hood said that was obviously intended to facilitate accumulation by the inside clique，headed by Bert's grateful friend．

On the following Thursday，after the market closed，the directors of the Atlantic & Southern met and passed the dividend．The stock broke six points in the first six minutes of trading Friday morning．

Bert Walker was sore as a pup．He called on the grateful director，who was broken-hearted about it and very penitent．He said that he had forgotten that he had told Walker to buy．That was the reason he had neglected to call him up to tell him of a change in the plans of the dominant faction in the board．The remorseful director was so anxious to make up that he gave Bert another tip．He kindly explained that a couple of his colleagues wanted to get cheap stock and against his judgment resorted to coarse work．He had to yield to win their votes．But now that they all had accumulated their full lines there was nothing to stop the advance．It was a double-riveted，lead-pipe cinch to buy A．& S．now．

Bert not only forgave him but shook hands warmly with the high financier．Naturally he hastened to find his friend and fellow victim，Hood，to impart the glad tidings to him．They were going to make a killing．The stock had been tipped for a rise before and they bought．But now it was fifteen points lower．That made it a cinch．So they bought five thousand shares，joint account．

As if they had rung a bell to start it，the stock broke badly on what quite obviously was inside selling．Two specialists cheerfully confirmed the suspicion．Hood sold out their five thousand shares．When he got through Bert Walker said to him，“If that blankety-blank blanker hadn't gone to Florida day before yesterday I'd lick the stuffing out of him．Yes，I would．But you come with me．”

“Where to？”asked Hood．

“To the telegraph office．I want to send that skunk a telegram that he'll never forget．Come on．”

Hood went on．Bert led the way to the telegraph office．There，carried away by his feelings—they had taken quite a loss on the five thousand shares—he composed a masterpiece of vituperation．He read it to Hood and finished，“That will come pretty near to showing him what I think of him．”

He was about to slide it toward the waiting clerk when Hood said，“Hold on，Bert！”

“What's the matter？”

“I wouldn't send it，”advised Hood earnestly．

“Why not？”snapped Bert．

“It will make him sore as the dickens．”

“That's what we want，isn't it？”said Bert，looking at Hood in surprise．

But Hood shook his head disapprovingly and said in all seriousness，“We'll never get another tip from him if you send that telegram！”

A professional trader actually said that．Now what's the use of talking about sucker tip-takers？Men do not take tips because they are bally asses but because they like those hope cocktails I spoke of．Old Baron Rothschild's recipe for wealth winning applies with greater force than ever to speculation．Somebody asked him if making money in the Bourse was not a very difficult matter，and he replied that，on the contrary，he thought it was very easy．

“That is because you are so rich，”objected the interviewer．

“Not at all．I have found an easy way and I stick to it．I simply cannot help making money．I will tell you my secret if you wish．It is this：I never buy at the bottom and I always sell too soon．”

Investors are a different breed of cats．Most of them go in strong for inventories and statistics of earnings and all sorts of mathematical data，as though that meant facts and certainties．The human factor is minimised as a rule．Very few people like to buy into a one-man business．But the wisest investor I ever knew was a man who began by being a Pennsylvania Dutchman and followed it up by coming to Wall Street and seeing a great deal of Russell Sage．

He was a great investigator，an indefatigable Missourian．He believed in asking his own questions and in doing his seeing with his own eyes．He had no use for another man's spectacles．This was years ago．It seems he held quite a little Atchison．Presently he began to hear disquieting reports about the company and its management．He was told that Mr．Reinhart，the president，instead of being the marvel he was credited with being，in reality was a most extravagant manager whose recklessness was fast pushing the company into a mess．There would be the deuce to pay on the inevitable day of reckoning．

This was precisely the kind of news that was as the breath of life to the Pennsylvania Dutchman．He hurried over to Boston to interview Mr．Reinhart and ask him a few questions．The questions consisted of repeating the accusations he had heard and then asking the president of the Atchison，Topeka & Santa Fe Railroad if they were true．

Mr．Reinhart not only denied the allegations emphatically but said even more：He proceeded to prove by figures that the allegators were malicious liars．The Pennsylvania Dutchman had asked for exact information and the president gave it to him，showing him what the company was doing and how it stood financially，to a cent．

The Pennsylvania Dutchman thanked President Reinhart，returned to New York and promptly sold all his Atchison holdings．A week or so later he used his idle funds to buy a big lot of Delaware，Lackawanna & Western．

Years afterward we were talking of lucky swaps and he cited his own case．He explained what prompted him to make it．

“You see，”he said，“I noticed that President Reinhart，when he wrote down figures，took sheets of letter paper from a pigeonhole in his mahogany roll-top desk．It was fine heavy linen paper with beautifully engraved letterheads in two colors．It was not only very expensive but worse—it was unnecessarily expensive．He would write a few figures on a sheet to show me exactly what the company was earning on certain divisions or to prove how they were cutting down expenses or reducing operating costs，and then he would crumple up the sheet of the expensive paper and throw it in the waste-basket．Pretty soon he would want to impress me with the economies they were introducing and he would reach for a fresh sheet of the beautiful notepaper with the engraved letterheads in two colors．A few figures—and bingo，into the waste-basket！More money wasted without a thought．It struck me that if the president was that kind of a man he would scarcely be likely to insist upon having or rewarding economical assistants．I therefore decided to believe the people who had told me the management was extravagant instead of accepting the president's version and I sold what Atchison stock I held．

“It so happened that I had occasion to go to the offices of the Delaware，Lackawanna & Western a few days later．Old Sam Sloan was the president．His office was the nearest to the entrance and his door was wide open．It was always open．Nobody could walk into the general offices of the D．L．& W．in those days and not see the president of the company seated at his desk．Any man could walk in and do business with him right off，if he had any business to do．The financial reporters used to tell me that they never had to beat about the bush with old Sam Sloan，but would ask their questions and get a straight yes or no from him，no matter what the stock-market exigencies of the other directors might be．

“When I walked in I saw the old man was busy．I thought at first that he was opening his mail，but after I got inside close to the desk I saw what he was doing．I learned afterwards that it was his daily custom to do it．After the mail was sorted and opened，instead of throwing away the empty envelopes he had them gathered up and taken to his office．In his leisure moments he would rip the envelope all around．That gave him two bits of paper，each with one clean blank side．He would pile these up and then he would have them distributed about，to be used in lieu of scratch pads for such figuring as Reinhart had done for me on engraved notepaper．No waste of empty envelopes and no waste of the president's idle moments．Everything utilised．

“It struck me that if that was the kind of man the D．L．& W．had for president，the company was managed economically in all departments．The president would see to that！Of course I knew the company was paying regular dividends and had a good property．I bought all the D．L．& W．stock I could．Since that time the capital stock has been doubled and quadrupled．My annual dividends amount to as much as my original investment．I still have my D．L．& W．And Atchison went into the hands of a receiver a few months after I saw the president throwing sheet after sheet of linen paper with engraved letterheads in two colors into the wasteb-asket to prove to me with figures that he was not extravagant．”

And the beauty of that story is that it is true and that no other stock that the Pennsylvania Dutchman could have bought would have proved to be so good an investment as D．L．& W．