Show rJ t. t M t j T. T e I r r i C Chap ap e ron ro n d ge R esp le f r E e of o I Sto chi T. T I I sues ues A Active tive I O y When Those Behind Start Manipulation r Pool T-Pool Manager as Told to 10 t James Abelle f CHAPTER V. V he lie Big Pools ju jn n Leading f Active st Stocks c s. s 1929 b by Current News Features I Inc c i In this thi Article the pool manager aunts the adventures of an n ama ama- pool manager manag r who built bult a sue suc- uc- uc ful ful fuI pool out of the thc wreckage re ag of I holdings of a group of aid eld investors showing ing How the inq active stocks tocks cap be made shave have when properly chapel chaper- pd who lu 1 Is Ig Interested In Iii In the tM market knows the old maxim never so go up althem up This ancient Wall all allt et t proverb pro expresses tho truth ch generation le learns rn In Its e that bull markets aro are not prod pro pro- t eC d by mysterious outbursts outburst of ot buying It Is human b of ot futures People ally wait alt and see And It St Is buman luman to want to climb cUmb aboard band wagon when the tho parade ts t The public cornea comes Into the ot market when It sees prices But tho the Initial advance ance public participation Invariably brought about the pools poole and other big opera- opera i behind If tho the scenes 1 inmost canes therefore when experienced market observer the price of or n a stock rapIdly the tho first question ho Who Is putting puffing it up I tho the next question he asks Is Isi iy If Tho amount of or put put- din dInS dine of most Issues Is not large igli to p permit more than n one or groups ups of speculators speculators to to operate As Au we wo say say In tho the thet t There is no room for tor an ment Successful operations h ho stocks 8 of the smaller cor- cor Hons 8 usually depend upon pon ac act acts ac- ac t ts knowledge of the Inside sit alt on it In the ot of the case leading ac ac- stocks tho the Issues es which nt at 3 are traded dally In Q Of t shares more it Is futile to ask Who hInd the tho market Not moreno mereno mere mere- no nc or two t pools or groups of or ful market Interests ma may bo be in on ono of ot tho the big stocks dimes dimes' Cho or or six Ix such uch groups active simultaneously tOS together rR a dozen or more smaller yet ct rth cleu Important tY Veach each ch possessing largo large 10 reee re- re ee ces of ot C capital and Some icse- icse interests ar are g Kome orn Some Som pools are tho Iho as as na others other arc are liquid liquId- t. t And as wo s h have o s seen e In at some somo very cry powerful may be bo at t ton on tho sho short side i is Ia true truo of ot tho the stocks of or tho The st t c corporations as of ot smaller s. s that when prices s decline beth bethe botho be- be th the tho figures at which tho the shares valued l ed b. b by tho the big Insiders tho the is supported with buying orIn or or- or Iri In Y volume But nut as soon n as is support buln buying makes an m tip ap- ance a n. large lare number of or other othel Ic Ie Jorn tho tha party Some of ot i yore Invited ted but IriO most moat t of them theme c e them themselves es el It Is only nee flee flee- i ry ry- for lor tho the do door r to be opened alt on an M. M hour the house la Is full tull first guests to arrive axe are served In tho the form of at nt bargain aln prices And grab srab everything i in sight Bight r comers corners must bid for tor a Do share 10 to poodles s AMBLE FOR STOCKS tho the early s stages a es of ot in un tock prices tho the big speculators peculators pools the large Investment ID In Ih- and important Impo lant individual tor tho the whole panoply of ot Wall won t market interests engage in Sn ramble amble for tOr Or cheap stocks stocks' much same me sort of ot buying buyl g or orgy the tide ilde public will be bo seen to In In- eln Sn at a n Into lato stage of oC tho the bull ment On th tho occasion of ot ono one 4 outburst Of ocl ln Inside b buying l of th decline which ter- ter It on March 26 6 ot of this this' year I lung g I frI friend nd pf t mino W was given shen to WIn his Ms spars t r The Ic ot of o operation Jio lie conducted at that Wilt servo serve ser to illustrate omo zomo of or ot the pools In lead lead- stock January a uary and February several elal e lal operators operators' found themselves ed up with stock which the they A could not dispose of oC profitably In Inthe Inthe inthe the irregular markets then markets then prevail aU ing IuS' ug The Tho majority of oe this particular lilt Jar group were rich men mn of inadequate made made- quote quate Wall aU street experience Their entire knowle knowledge go of pool operations had been gained in tho the bull markets mar mu of t 1927 and 1928 1128 two yeara of almost uninterrupted expansion in 1 stock values durIn during which thomar thomar- ket encountered no long spell of se seVero severe se- se vero vere financial storms Th These o inen men were vera brought together together by b by a with whom they all had relations The banker suggested that t they ey combine tho the several pools into Inlo one onen I and onci n turn the management overto o a n more mOlO seasoned market operator REFUSE LOSS LOSSES S But Dut no operator of ot f established d f success s s could cou bo be Interested T The io list of ot stocks held el was not not attractive attractive tive and the gentlemen n of the tho group now much l spirit were advised to cl cJ close sp so out their com com commitments and lia tJ tim tho o I loss Ion ss to to experience account This th they y not wish to do and It l' w wa was finally suggested that th they consult tho the oung young man I have mentioned who was then a floor trader trade H E He had hall been in charge of of the the execution n of ot or orders on on the floor of the the stock I exchange for Cor a number of ot Important pools and was known to cherish the ambition to run a n. r pool oo of ot his hIs' own Ire Ira was not at all interested in fn the tho proposition laid before him hin But ho he saw that the group were were cr very wealthy tn men n and might be ed d to finance ri a a. counter tion Ho was convinced that tho the market was facing an impending break this was wag early last laRt March Ho He also believed that following the anticipated reaction a n. number number- of ot active stocks with which he ho was familiar would enter upon a n. new and rapid advance Ho He suggested that the stocks held by the crowd bo be liquidated ted under his direction as rapidly as possible and the tho mone money transferred t tb to operations In tho the big stocks which he favored when the right moment arrived He promIsed prom prom- to get back the mone money lost by br the rich if It ho were al allowed allowed al- al lowed to put through his own pro pro- ro- ro gram These men nen had already sunk about but tho the enthusiasm of ot the young oung trader won their con con- The They turned the deal over er overto overto erto to him putting puttIng- up an additional million dollars for trading pur pur- poses pose The first move of tho the new pool mana manager er was to engage a 3 small mall staff of or statisticians s and investigators in tors These men men m made dc an Intensive study of or a number of at stocks checkIng checking checking check check- ing up the facts upon which the thc expected ex ex- market advance might bo be predicated Some of ot tho the original selections of ot tho the operator were thrown out and two or three other issues wore substituted Tho The result was a n. list of or about a n dozen active stocks which ho was prepared to buy In quantities as soon as the current reaction definitely touched bottom Meantime he ho had closed out the tho previous commitments of tho tim pool members using tho the million mil mu- lion dollars of ot fresh capital which they hey supplied 1 to facilitate liquidation liquida liquida- tion March alch 20 found him with the pool resources in cash FUNDS GO FAST Tho next few ow days das as ns will bo ho re remembered re- re tho the stock market went Into a n. bad bach sma smash h. h Our pool manager manager man man- ager ner made a n few fc purchases to test out th the strength of ot tho the selling selling and and and found round It too strong to invite resistance tance lance Ho Ire alt waited l On March 26 the the culminating day of or the tho de decline do- do cline an dine an 1 avalanche of or sales orders poured onlo onto the floor of or the exchange CX ex change from all directions EI Eight ht million shares of stock were traded traded trad trad- ed d. d tho the largest d days daya b business in stock exchange 11 history 15 to 1 up Ul to that time After noon buying appeared In volume Stocks had declined dc In the morning session over o 10 points os ns recorded In the lu published averages crag of or active e stocks In III the thc afternoon this loss 1085 was recovered ns as buy buying In by Important pools and largo large speculators speculators spec spec- I tO together ether with investment j trust and Institutional buying came camo Into the tho market When tho the big guns suns went into action our young oung m man n went into action with them While prices W were LC still In the tim lower half hal ot of tho the lays daya range rD h ho bought stocks to tho the full till extent of or the tho rc- rc of his pooL He ceased buying buy buy- In lug ing only when hen he had exhausted the thelast thelast thelast last penny lenny of or credit tying up hl his entire personal capital as well as the pool 1001 funds It may bo be of ot Interest to record hero here thai o 0 o told me to ho ha slept that nl nJ night ht hl as ns well as ho lie had ever slept pt In his life Uto and liaa laa to lie be 1 0 n d. d for tor his breakfast next morning The rest of ot tho the story Is of ot course ob ob- ob- ob March 2 27 1 ho Ie was wa lightening tho load getting setting as much as 10 or 15 points profit on some soma o of ot the stocks carried overnight In the course cours of at tho the next few tew weeks previous losses 0 ot of r his hia backers were recouped and tho the pool ool Lo Is still in existence tf with Us its capital much enlarged both from profits and from the lie funds ot or new members Tho The longer compelled com corn pool manager is is- no to seek eek capital lor tor his oper oper- In lit reading over ocr th the above I feel foci that I hould should add however r. r lest nn any Inexperienced young oung man m should boUd be bc led to unprofitable dreams ot of quick success in Wall van street that the operator whose story was told had spent fifteen previous years ar 11 m following th tho market as board b boy m margin gln clerk speculator and floor trader On three occasions he had gone one broke roko and worked his way back each time paying ot oft off his 1118 debts In full lull And before ho bo was Wl given civen the tho opportunity hero here related ho he had demonstrated liI hi his ability b by accumulating resource of ot l. l front from his personal peculations 1 In InWall Wall street streel as ho Iho old saying paying alno has it H men Inert upend a lIC lifetime to lo leant Jearl how to make kc a c in III a day a t Running Pools and General Market Pools Is k the subject of ci the tho next instalment I |