What old Mr. Partridge said did not mean much to me until I
began to think about my own numerous failures to make as much
money as I ought to when I was so right on the general market.
The more I studied the more I realized how wise that old chap
was. He had evidently suffered from the same defect in his young
days and knew his own human weaknesses. He would not lay himself
open to a temptation that experience had taught him was hard to
resist and had always proved expensive to him, as it was to me.
I think it was a long step forward in my trading education
when I realized at last that when old Mr. Partridge kept on
telling the other customers, "Well, you know this is a bull
market!" he really meant to tell them that the big money was not
in the individual fluctuations but in the main movements that
is, not in reading the tape but in sizing up the entire market
and its trend.
And right here let me say one thing: 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. I've known many men who were right
at exactly the right time, and began buying or selling stocks
when prices were at the very level, which should show the
greatest profit. And their experience invariably matched mine --
that is, they made no real money out of it. Men who can both be
right and sit tight are uncommon. I found it one of the hardest
things to learn. But it is only after a stock operator has
firmly grasped this that he can make big money. It is literally
true that millions come easier to a trader after he knows how to
trade than hundreds did in the days of his ignorance.
The reason is that a man may see straight and clearly and
yet become impatient or doubtful when the market takes its time
about doing as he figured it must do. That is why so many men in
Wall Street, who are not at all in the sucker class, not even in
the third grade, nevertheless lose money. The market does not
beat them. They beat themselves, because though they have brains
they cannot sit tight. Old Turkey was dead right in doing and
saying what he did. He had not only the courage of his
convictions but the intelligent patience to sit tight.
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. To do this you must study
general conditions and not tips or special factors affecting
individual stocks. Then get out of all your stocks; get out for
keeps! Wait until you see -- or if you prefer, until you think
you see the turn of the market; the beginning of a reversal of
general conditions. You have to use your brains and your vision
to do this; otherwise my advice would be as idiotic as to tell
you to buy cheap and sell dear. 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.
Another thing I noticed in studying my plays in Fullerton's
office after I began to trade less unintelligently was that my
initial operations seldom showed me a loss. That naturally made
me decide to start big. It gave me confidence in my own judgment
before I allowed it to be vitiated by the advice of others or
even by my own impatience at times. Without faith in his own
judgment no man can go very far in this game. That is about all
I have learned to study general conditions, to take a position
and stick to it. I can wait without a twinge of impatience. I
can see a setback without being shaken, knowing that it is only
temporary. I have been short one hundred thousand shares and I
have seen a big rally coming. I have figured and figured
correctly -- that such a rally as I felt was inevitable, and
even wholesome, would make a difference of one million dollars
in my paper profits. And I nevertheless have stood pat and seen
half my paper profit wiped out, without once considering the
advisability of covering my shorts to put them out again on the
rally. I knew that if I did I might lose my position and with it
the certainty of a big killing. It is the big swing that makes
the big money for you.
began to think about my own numerous failures to make as much
money as I ought to when I was so right on the general market.
The more I studied the more I realized how wise that old chap
was. He had evidently suffered from the same defect in his young
days and knew his own human weaknesses. He would not lay himself
open to a temptation that experience had taught him was hard to
resist and had always proved expensive to him, as it was to me.
I think it was a long step forward in my trading education
when I realized at last that when old Mr. Partridge kept on
telling the other customers, "Well, you know this is a bull
market!" he really meant to tell them that the big money was not
in the individual fluctuations but in the main movements that
is, not in reading the tape but in sizing up the entire market
and its trend.
And right here let me say one thing: 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. I've known many men who were right
at exactly the right time, and began buying or selling stocks
when prices were at the very level, which should show the
greatest profit. And their experience invariably matched mine --
that is, they made no real money out of it. Men who can both be
right and sit tight are uncommon. I found it one of the hardest
things to learn. But it is only after a stock operator has
firmly grasped this that he can make big money. It is literally
true that millions come easier to a trader after he knows how to
trade than hundreds did in the days of his ignorance.
The reason is that a man may see straight and clearly and
yet become impatient or doubtful when the market takes its time
about doing as he figured it must do. That is why so many men in
Wall Street, who are not at all in the sucker class, not even in
the third grade, nevertheless lose money. The market does not
beat them. They beat themselves, because though they have brains
they cannot sit tight. Old Turkey was dead right in doing and
saying what he did. He had not only the courage of his
convictions but the intelligent patience to sit tight.
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. To do this you must study
general conditions and not tips or special factors affecting
individual stocks. Then get out of all your stocks; get out for
keeps! Wait until you see -- or if you prefer, until you think
you see the turn of the market; the beginning of a reversal of
general conditions. You have to use your brains and your vision
to do this; otherwise my advice would be as idiotic as to tell
you to buy cheap and sell dear. 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.
Another thing I noticed in studying my plays in Fullerton's
office after I began to trade less unintelligently was that my
initial operations seldom showed me a loss. That naturally made
me decide to start big. It gave me confidence in my own judgment
before I allowed it to be vitiated by the advice of others or
even by my own impatience at times. Without faith in his own
judgment no man can go very far in this game. That is about all
I have learned to study general conditions, to take a position
and stick to it. I can wait without a twinge of impatience. I
can see a setback without being shaken, knowing that it is only
temporary. I have been short one hundred thousand shares and I
have seen a big rally coming. I have figured and figured
correctly -- that such a rally as I felt was inevitable, and
even wholesome, would make a difference of one million dollars
in my paper profits. And I nevertheless have stood pat and seen
half my paper profit wiped out, without once considering the
advisability of covering my shorts to put them out again on the
rally. I knew that if I did I might lose my position and with it
the certainty of a big killing. It is the big swing that makes
the big money for you.
