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 easily 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 was still 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 rumors 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.