14A friend who has moved multiple times in recent years was finally opening some long-packed boxes. His daughter found a little book titled Fourteen Methods of Operating in the Stock Market, published in 1918 by The Magazine of Wall Street. My friend thought I might be interested in the book.

The first chapter was "A Specialist in Panics," which the Chair brought to our attention two years ago. A quote by the panic specialist might be applicable now: "Among other things I had learned that insiders keep things looking very blue over a long period while they are quietly buying stocks."

There was a chapter by Richard D. Wyckoff on "The Breadth of the Market." The meaning of breadth was a bit different then; it meant how many stocks traded on a given day. Wyckoff posited that a price rise accompanied by a rising breadth was bullish as it meant money was flowing into a greater number of stocks.

Other chapters presented a variety of techniques that are clearly recognizable as early versions of strategies used today. In "Principles of Price Movements," Thomas F. Woodlock presented a pre-Elliott theory of waves: changes in the economy and interest rates drive the major bull and bear markets, but there are periodic "eddies" that take prices in the opposite direction of the "main current." In "Methods of Successful Traders," a Mr. G wrote, "The only thing that will carry [a trader] through is to know the trend at all times, and follow it."

An architect traded successfully using principles of architecture. "The stock being traded in must be treated as a 'force' applied on the axis or average for a 'bear' day and the force applied from under for a 'bull' day. The movement of previous three days, previous week and month is also necessary to determine distance covered in points, together with weight (volume) applied… I consider that the market can be calculated exactly as a person would calculate a wood joist. The joist will safely hold just so much, and its factor of safety when encroached upon is on the side towards danger, and when exceeded the joist will break; so will a stock in the stock market."

All in all, a fascinating book.





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