Psychology of the Stock Market"This book is based upon the belief that the movements of prices on the exchanges are dependent to a very large degree on the mental attitude of the investing and trading public ... [and] is intended chiefly as a practical help to that considerable part of the community which is interested, directly or indirectly, in the markets.--p. [3] |
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accumulation active trader advance appears banking bear market bearish become Berkeley Berkeley Berkeley LIBRARY Berkely boom bottom brokers bull market bullish buyers buying or selling CALIFORNIA LIBRARY campaign capital capitalists cause comes consider considerable cover discounting dition eral event extent fact fear floating supply floor traders fluctuations grocer hence high prices higher hundred shares ical important influence inverted reasoning Investment investors judgment line of business liquid capital load of stocks look losses low prices MAGAZINE OF WALL ment mental attitude mind movement of prices operations panic perhaps persons position profes professional traders profit-taking profits PSYCHOLOGY OF STOCKS reaction Rector Street result rise scale orders sell short short interest short sales short side situation sold sort Standard Oil stock market stubborn supply of stocks terests thing tion UNIV Berkeley UNIVERSITY OF CALIFORNIA usually vestors Wall Street
Popular passages
Page 66 - Hardly any event can happen of sufficient importance to attract general attention which some process of reasoning cannot construe as bullish and some other process as bearish.1...
Page 33 - If they really wished to get the stocks they would not buy through their own brokers, but would endeavor to conceal their buying by scattering it among other houses." 3. A still more suspicious professional may turn another mental somersault and say, "They are buying through their own brokers so as to throw us off the scent and make us think someone else is using their brokers as a blind.
Page 64 - The result of these opposing views may be stationary prices, or a market fluctuating nervously within a narrow range, or a movement in either direction, greater or smaller in proportion to the more or less emphatic preponderance of the buying or selling. Of course it must always be remembered that it is the dollars that count, not the number of buyers or sellers. A few great capitalists having advance information which they regard as accurate, may more than counterbalance thousands of small traders...
Page 56 - as through a glass darkly." Our ideas are always enveloped in a haze and our reasoning powers work in a rut from which we find it painful if not impossible to escape. Many of our emotions and some of our acts are merely automatic responses to external stimuli.
Page 29 - The press reflects, in a general way, the thoughts of the multitude, and in the stock market the multitude is necessarily, as a logical deduction from the facts of the case, likely to be bullish at high prices and bearish at low. It has often been remarked that the average man is an optimist regarding his own enterprises and a pessimist regarding those of others. Certainly this is true of the professional trader in stocks. As a result of the reasoning outlined...
Page 36 - Most of us have met those deplorable mental wrecks, often found among the "chairwarmers" in brokers' offices, whose thinking machinery seems to have become permanently demoralized as a result of continued acrobatics. They are always seeking an "ulterior motive" in everything. They credit — or debit — Morgan and Rockefeller with the smallest and meanest trickery and ascribe to them the most artful duplicity in matters which those "high financiers
Page 66 - Doubtless even our old friend of the news columns to the effect that "the necessary activities of a nation of ninety million souls create and maintain a large volume of business," may influence some red-blooded optimist to buy 100 Union ; but the grouchy pessimist who has eaten too many doughnuts for breakfast will accept the statement as an evidence of the scarcity of real bull news and will likely enough sell 100 Union short on the strength of it. It is the overextended speculator whov causes most...
Page 55 - IT is axiomatic that inexperienced traders and investors, and indeed a majority of the more experienced as well, are continually trying to speculate on past events. Suppose, for example, railroad earnings as published are showing constant large increases in net. The novice reasons, "Increased earnings mean increased amounts applicable to the payment of dividends. Prices should rise. I will buy.
Page 60 - Any control over their action has to be exercised by cajolery or by devious and circuitous methods. Moreover, public opinion is becoming more volatile and changeable year by year, owing to the quicker spread of information and the rapid multiplication of the reading public. One can easily imagine that some of our older financiers must be saying to themselves, "If I had only had my present capital in 1870, or else had the conditions of 1870 to work on today!
Page 67 - A bit of news which he would regard as insignificant at any other time will then assume an exaggerated importance in his eyes. His fears increase in geometrical proportion to the size of his line of stocks. Likewise the overloaded bull may begin to "throw his stocks...