May

19

 A Churchillian view of the market:

The future course of the market turns on its ability to absorb this stock. After this almost automatic recovery, following a semi- panic break, the market usually sells off again, slowly, day by day, and not uncommonly approaches the old low level which the first fever of selling had established. It is not true that such breaks necessarily mark the end of major movements, although they have occurred at such times."

-William Hamilton, WSJ, April 4, 1926.

One admires the colorful language "the fever of selling", the semi-panic break, the ability to absorb the stock after the almost automatic recovery. And one thanks Alan Millhone for sending me the book The Dow Theory from which this coloratura is taken. Mr. Hamilton has none of that terrible haughtiness and chronic bearishness of his unworthy successor Mr. Abelson, having passed away on Dec 10, 1929, after riding down a 50% decline in the market in the preceding two months with his daily forecasts in the WSJ, but his writing is Churchillian, and although nothing is tested in what he says, he elicits many interesting hypotheses, pregnant to this day. I will take the liberty of transmitting some of his colorful prose and or leading ideas subsequently.

Also, always to be remembered, as Hamilton said on March 17, 1909:

It cannot too often be said that the road to ruin lies in dogmatizing on charts, systems, and generalizations. Trading on any such basis is Gambling as distinguished from legitimate speculation. It is no more defensible than an attempt to break the bank at Monte Carlo with one of the innumerable systems which have tempted weak human beings since the prehistoric ages when man first learned to count beyond the number of his finers and toes… stocks have been for sale on any recovery.


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