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bucket shop in Boston. I knew that some day I would find out
what was wrong and I would stop being wrong. I would then have
not alone the will to be right but the knowledge to insure my
being right. And that would mean power.
Please do not misunderstand me. It was not a deliberate
dream of grandeur or a futile desire born of overweening vanity.
It was rather a sort of feeling that the same old stock market
that so baffled me in Fullerton's office and in Harding's would
one day eat out of my hand. I just felt that such a day would
come. And it did October 24, 1907.
The reason why I say it is this: That morning a broker who
had done a lot of business for my brokers and knew that I had
been plunging on the bear side rode down in the company of one
of the partners of the foremost banking house in the Street. My
friend told the banker how heavily I had been trading, for I
certainly pushed my luck to the limit. What is the use of being
right unless you get all the good possible i out of it?
Perhaps the broker exaggerated to make his story sound
important. Perhaps I had more of a following than I knew.
Perhaps the banker knew far better than I how critical the
situation was. At all events, my friend said to me: "He listened
with great interest to what I told him you said the market was
going to do when the real selling began, after another push or
two. When I got through he said he might have something for me
to do later in the day."
When the commission houses found out there was not a cent to be
had at any price I knew the time had come. I sent brokers into
the various crowds. Why, at one time there wasn't a single bid
for Union Pacific. Not at any price! Think of it! And in other
stocks the same thing. No money to hold stocks and nobody to buy
them.
I had enormous paper profits and the certainty that all
that I had to do to smash prices still more was to send in
orders to sell ten thousand shares each of Union Pacific and of
a half dozen other good dividend-paying stocks and what would
follow would be simply hell. It seemed to me that the panic that
would be precipitated would be of such an intensity and char-
acter that the board of governors would deem it advisable to
close the Exchange, as was done in August, 1914, when the World
War broke out.
It would mean greatly increased profits on paper. It also
mean an inability to convert those profits into actual cash. But
there were other things to consider, and one was that a further
break would retard the recovery that I was beginning to figure
on, the compensating improvement after all that bloodletting.
Such a panic would do much harm to the country generally.
I made up my mind that since it was unwise and unpleasant
to continue actively bearish it was illogical for me to stay
short. So I turned and began to buy.
It wasn't long after my brokers began to buy in for meand,
by the way, I got bottom prices that the banker sent for my
friend.
"I have sent for you," he said, "because I want you to go
instantly to your friend Livermore and say to him that we hope
he will not sell any more stocks today. The market can't stand
much more pressure. As it is, it will be an immensely difficult
task to avert a devastating panic. Appeal to your friend's
patriotism. This is a case where a man has to work for the
benefit of all. Let me know at once what he says."
My friend came right over and told me. He was very tactful.
I suppose he thought that having planned to smash the market I
would consider his request as equivalent to throwing away the
chance to make about ten million dollars. He knew I was sore on
some of the big guns for the way they had acted trying to land
the public with a lot of stock when they knew as well as I did
what was coming.
As a matter of fact, the big men were big sufferers and
lots of the stocks I bought at the very bottom were in famous
financial names. I didn't know it at the time, but it did not
matter. I had practically covered all my shorts and it seemed to
me there was a chance to buy stocks cheap and help the needed
recovery in prices at the same time if nobody hammered the
market.
So I told my friend, "Go back and tell Mr. Blank that I
agree with them and that I fully realised the gravity of the
situation even before he sent for you. I not only will not sell
any more stocks today, but I am going in and buy as much as I
can carry." And I kept my word. I bought one hundred thousand
shares that day, for the long account. I did not sell another
stock short for nine months.
That is why I said to friends that my dream had come true
and that I had been king for a moment. The stock market at one
time that day certainly was at the mercy of anybody who wanted
to hammer it. I do not suffer from delusions of grandeur; in
fact you know how I feel about being accused of raiding the
market and about the way my operations are exaggerated by the
gossip of the Street.
I came out of it in fine shape. The newspapers said that
Larry Livermore, the Boy Plunger, had made several millions.
Well, I was worth over one million after the close of business
that day. But my biggest winnings were not in dollars but in the
intangibles: I had been right, I had looked ahead and followed a
clear-cut plan. I had learned what a man must do in order to
make big money; I was permanently out of the gambler class; I
had at last learned to trade intelligently in a big way. It was
a day of days for me.
CHAPTER X
THE recognition of our own mistakes should not benefit us any
more than the study of our successes. But there is a natural
tendency in all men to avoid punishment. When you associate
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