The Diary of a
Young 1929 Trader
by Joseph Granville, editor,
The Granville Market Letter
I have
in my library a two-volume edition of The Inman Diary, by Arthur Inman,
who had lived from 1895 to 1963. It was published in 1985 by the Harvard
University Press. Since he was 34 years old at the time of the 1929 crash,
Inman's diary entries that year were not only fascinating insights, but
typical of a stock trader who wanted to be a millionaire in a hurry and
what happened in a very brief period of time. perhaps my quoting him now
will help some young trader with similar get-rich-quick ambitions before
he loses everything in the current crashing market:
October
4th: What a day yesterday. Market
broke precipitately. Lost thirteen thousand, the largest drop since the
eighteen thousand drop. Down to between twelve and twenty-seven thousand.
Been selling all morning. Sold short on several things to see if that would
rally the Market. Am afraid of a panic. If I fear, others must fear. Ergo:
I sell. If Market rallies, I shall sell more. I should reduce my holdings
to not over a hundred thousand. If I had not been such a glutton, I should
not have taken such a licking. Never mind, I am learning.
October
19th: Yesterday the Market died
again. Today it is dying ever more precipitately. I have wholesale orders
in to sell. The profit in my little book melted yesterday to seven thousand.
It is probably nil today. I hope I can withdraw from the wreckage with some
twenty thousand intact. My dreams of a millionwhere are they? Well, philosophically
speaking, I've had a bouncing time out of it all and learned a great deal
which may prove useful in the future. No use to weepif only I can retire
with the remnants. "O stock Market, God of American gamblers, be merciful
to me, a petty and insignificant worshipper at your shrine! If I have been
greedy, forgive me! Leave me my remnants, O Stock Market!
October
24th: What a day yesterday! Lost
nine thousand! One of the worst drops in history. Slept only four hours
last night. Put in orders to sell practically everything this morning. Opened
a little better than last evening. I see no end in sight. I certainly have
learned a `Bear' lesson. Every lesson, I repeat to myself with a sad smile,
must be paid for. Just sent Mother and Father each a telegram letting them
know I am out of the Market. I can hear Father's fervent. "Thank Goodness!"
October
30th: Yesterday was the wildest
panic in history. Stocks sold at anything they would bring. The list is
full of fantastic bargains. If I had sold out last July and could buy in
now, as Father told me to do, I would make my million in short order. As
it is, all I have to work with is two thousand. Well, glad I have that.
My head is clear, and I should be able to pull something out of the wreckage.
And I believe I have learned a lesson. Never forget, a panic is something
occurring approximately every seven years. Sell out when call money rises
over 10%; it is a danger signal. In the end, stocks return to eight times
their earning level. You just wait until seven years from now. I bet I make
my fortune. Believe me, this has been a wonderful lesson. It is my credo
that progress is built upon such lessons, that one should rather exult over
them than bemoan them. And if I am a man, I should find my way out and up.
Mr. Flood looks at me and shakes his head: "I shouldda thought you'd
be all in and out. I don't for the life a' me see how you take it like you
do. You got courage."November
12th: Am surpassingly weary today.
The Stock Market continues to sag without end. Have orders in to sell everything.
Figure will have about five hundred, if I am lucky, left. A humble ending
to a potential profit not four months ago of nearly a hundred thousand.Last
night and this morning, I have been centering my mind on economics. Few
books, less travel for Evelyn, fewer readers, not so many visits from doctors
if possible, fewer extravagances, food purchased at good but cheaper storessuch
must be the order of the day. It costs me in the vicinity of sixteen thousand
a year to exist. Father gives me twelve thousand a year. I was getting around
twenty-five hundred a year income from other stocks. Now I receive only
fifteen hundred. That leaves about twenty-five hundred to come from nowhere.At
least, I say to myself, I lost all in the greatest panic in history.So
that's the way it was, a trader consumed with greed in July and wiped out
in November. Is it to be any different now?Editor's Note: Joseph Granville is editor of The Granville Market Letter,
P.O. Drawer 413006, Kansas City, MO 64141, 1 year, 46 issues, $250. As a
Special Trial Offer, Mr. Granville is offering the next 4 weekly issues
for $31. The Granville Market Letter, now in its 36th year of publishing,
covers stocks, options and gold. A Daily Fax Service is offered which you
may find extremely useful, especially during these highly volatile market
days. Call Karen at 1-800-876-5388 for details.Mr. Granville will be speaking
at the Natural Resources Conference and Exhibition which will be held just
outside of the Chicago O'Hare airport at Rolling Meadows Holiday Inn on
October 23rd. For free tickets call Barbara Allen at 1-800-285-1700 or 317-633-1742.