Quotes

PART I: STOCK OPERATOR - THE ORIGIN STORY

On the Timeless Nature of Speculation

• "There is nothing new in Wall Street. There can't be because speculation is as old as the hills. Whatever happens in the stock market to-day has happened before and will happen again."

• "Nowhere does history indulge in repetitions so often or so uniformly as in Wall Street. When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators to-day differ from yesterday. The game does not change and neither does human nature."

On Tape Reading & The Numbers

• "The tape does not concern itself with the why and wherefore. It doesn't go into explanations. I didn't ask the tape why when I was fourteen, and I don't ask it to-day, at forty. The reason for what a certain stock does today may not be known for two or three days, or weeks, or months. But what the dickens does that matter? Your business with the tape is now—not tomorrow. The reason can wait."

• "A battle goes on in the stock market and the tape is your telescope. You can depend upon it seven out of ten cases."

• "I got so interested in my game and so anxious to anticipate advances and declines in all the active stocks that I got a little book. I put down my observations in it... It was rather a sort of record of my hits and misses, and next to the determination of probable movements I was most interested in verifying whether I had observed accurately; in other words, whether I was right."

• "It is enough for the experienced trader to perceive that something is wrong. He must not expect the tape to become a lecturer. His job is to listen for it to say 'Get out!' and not wait for it to submit a legal brief for approval."

On the Thrill of the Game & Capitalizing Knowledge

• "I didn't think of anything except that I could keep on proving my figuring was right. That's all the fun there is—being right by using your head."

• "When a man is right he wants to get all that is coming to him for being right."

• "If I was right when I tested my convictions with ten shares I would be ten times more right if I traded in a hundred shares. That is all that having more margin meant to me—I was right more emphatically."

• "If all I have is ten dollars and I risk it, I am much braver than when I risk a million, if I have another million salted away."

• "With me, I cannot fear to be wrong because I never think I'm wrong until I am proven wrong. In fact, I am uncomfortable unless I am capitalizing my experience."

On Independence (Playing a Lone Hand)

• "I didn't have a following. I kept my business to myself. It was a one-man business. Anyhow, it was my head, wasn't it? Prices either were going the way I doped them out without any help from friends or partners, or they were going the other way... That is why I always played a lone hand."

• "I have always played a lone hand. … It is the way my mind works. I have to do my own seeing and my own thinking. But I can tell you after the market began to go my way I felt for the first time in my life that I had allies—the strongest and truest in the world: underlying conditions."

On Bucket Shops & Outsmarting the House

• "Mine was the ideal way to operate in a bucket shop, where all that a trader does is to bet on fluctuations as they are printed by the ticker on the tape."

• "The thinner the shoestring the better for them, for their profit lies in your being wiped."

• "Since suckers always lose money when they gamble in stocks—they never really speculate—you'd think these fellows would run what you might call a legitimate illegitimate business. But they didn't. 'Copper your customers and grow rich' is an old and true adage, but they did not seem ever to have heard of it."

• "The beauty of doing business with a crook is that he always forgives you for catching him, so long as you don't stop doing business with him."

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PART II: STOCK OPERATOR - THE CRUCIBLE YEARS

On "Sitting Tight" vs. Over-Trading

• "After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets... Men who can both be right and sit tight are uncommon."

• "There is a time for all things, but I didn't know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time."

• "Disregarding the big swing and trying to jump in and out was fatal to me. Nobody can catch all the fluctuations. In a bull market your game is to buy and hold until you believe that the bull market is near its end."

• "One of the most helpful things that anybody can learn is to give up trying to catch the last eighth—or the first. These two are the most expensive eighths in the world. They have cost stock traders, in the aggregate, enough millions of dollars to build a concrete highway across the continent."

On Loss, Failure, and Tuition

• "The game taught me the game. And it didn't spare the rod while teaching."

• "Being broke is a very efficient educational agency."

• "Losing money is the least of my troubles. A loss never bothers me after I take it. I forget it overnight. But being wrong—not taking the loss—that is what does the damage to the pocketbook and to the soul."

• "I have been flat broke several times, but my loss has never been a total loss. Otherwise, I wouldn't be here now. I always knew I would have another chance and that I would not make the same mistake a second time. I believed in myself."

• "It takes a man a long time to learn all the lessons of all his mistakes. They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side."

• "If a man didn't make mistakes he'd own the world in a month. But if he didn't profit by his mistakes he wouldn't own a blessed thing."

• "The Mistake family is so large that there is always one of them around when you want to see what you can do in the fool-play line."

On the Hierarchy of Suckers

• "Suckers differ among themselves according to the degree of experience. The tyro knows nothing, and everybody, including himself, knows it."

• "The second-grade sucker knows how to keep from losing his money in some of the ways that get the raw beginner... He knows all the don'ts that ever fell from the oracular lips of the old stagers—excepting the principal one, which is: Don't be a sucker!"

• "It is this semisucker rather than the 100 per cent article who is the real all-the-year-round support of the commission houses."

• "And for a sucker play a man gets sucker pay; for the paymaster is on the job and never loses the pay envelope that is coming to you."

On Pyramiding and Proper Execution

• "Remember that stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don't make a second unless the first shows you a profit. Wait and watch."

• "It is surprising how many experienced traders there are who look incredulous when I tell them that when I buy stocks for a rise I like to pay top prices and when I sell I must sell low or not at all."

• "Of all speculative blunders there are few greater than trying to average a losing game.…Always sell what shows you a loss and keep what shows you a profit."

On Being Influenced (The Percy Thomas Lesson)

• "To learn that a man can make foolish plays for no reason whatever was a valuable lesson. It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urgings of a magnetic personality when plausibly expressed by a brilliant mind."

• "I have learned that a man may possess an original mind and a lifelong habit of independent thinking and withal be vulnerable to attacks by a persuasive personality."

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PART III: STOCK OPERATOR - THE GAME OF SPECULATION

On the Psychology of the Market

• "The speculator's chief enemies are always boring from within. It is inseparable from human nature to hope and to fear. In speculation when the market goes against you hope that every day will be the last day... And when the market goes your way you become fearful that the next day will take away your profit, and you get out—too soon."

• "Instead of hoping he must fear; instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit."

• "A stock operator has to fight a lot of expensive enemies within himself."

• "I have come to feel that it is as necessary to know how to read myself as to know how to read the tape."

• "Fear and hope remain the same; therefore the study of the psychology of speculators is as valuable as it ever was. Weapons change, but strategy remains strategy, on the New York Stock Exchange as on the battlefield."

• "'The principles of successful stock speculation are based on the supposition that people will continue in the future to make the mistakes that they have made in the past.' (Thomas F. Woodlock)"

On the Trap of "Tips"

• "TIPS! How people want tips! They crave not only to get them but to give them."

• "It has always seemed to me the height of damfoolishness to trade on tips.… To be told precisely what to do to be happy and in such a manner that you can easily obey is the next nicest thing to being happy."

• "Wall Street professionals know that acting on 'inside' tips will break a man more quickly than famine, pestilence, crop failures, political readjustments or what might be called normal accidents."

On Booms, Bubbles, and the Public

• "The big money in booms is always made first by the public—on paper. And it remains on paper."

• "The sucker has always tried to get something for nothing, and the appeal in all booms is always frankly to the gambling instinct aroused by cupidity and spurred by a pervasive prosperity."

• "People who look for easy money invariably pay for the privilege of proving conclusively that it cannot be found on this sordid earth."

On the Truth of Conditions vs. Opinions

• "Prices, like everything else, move along the line of least resistance. They will do whatever comes easiest."

• "I never argue with the tape. To be angry at the market because it unexpectedly or even illogically goes against you is like getting mad at your lungs because you have pneumonia."

• "A man may beat a stock or a group at a certain time, but no man living can beat the stock market!"

• "My greatest discovery was that a man must study general conditions, to size them so as to be able to anticipate probabilities. In short, I had learned that I had to work for my money. I was no longer betting blindly or concerned with mastering the technic of the game, but with earning my successes by hard study and clear thinking."

• "Observation, experience, memory and mathematics—these are what the successful trader must depend on."

On Manipulation

• "There is no question that advertising is an art, and manipulation is the art of advertising through the medium of the tape. The tape should tell the story the manipulator wishes its readers to see."

• "It is well to remember a rule of manipulation, a rule that Keene and his able predecessors well knew. It is this: Stocks are manipulated to the highest point possible and then sold to the public on the way down."

• "As I have said a thousand times, no manipulation can put stocks down and keep them down."

On Professional Trading as a Discipline

• "The training of a stock trader is like a medical education. The physician has to spend long years learning anatomy, physiology, materia medica and collateral subjects by the dozen. He learns the theory and then proceeds to devote his life to the practice."

• "The hope of making the stock market pay your bill is one of the most prolific sources of loss in Wall Street. … I could build a huge hospital with the birthday presents that the tight-fisted stock market has refused to pay for."

• "Money creates needs or encourages their multiplication. I mean that after a man makes money in the stock market he very quickly loses the habit of not spending. But after he loses his money it takes him a long time to lose the habit of spending."

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