Chapter 12

24 min

Not long after I closed my July cotton deal more successfully than I had expected I received by mail a request for an interview. The letter was signed by Percy Thomas. Of course I immediately answered that I’d be glad to see him at my office at any time he cared to call. The next day he came.

Not long after I closed my July cotton deal more successfully than I had expected, I received a letter requesting an interview. It was signed by Percy Thomas. Of course, I immediately replied that I’d be glad to see him at my office whenever he wanted to come. He came the next day.

I had long admired him. His name was a household word wherever men took an interest in growing or buying or selling cotton. In Europe as well as all over this country people quoted Percy Thomas’ opinions to me. I remember once at a Swiss resort talking to a Cairo banker who was interested in cotton growing in Egypt in association with the late Sir Ernest Cassel. When he heard I was from New York he immediately asked me about Percy Thomas, whose market reports he received and read with unfailing regularity.

I had admired him for a long time. His name was known in every household where people were interested in growing, buying, or selling cotton. People in Europe and all over this country quoted Percy Thomas’ opinions to me. I once met a Cairo banker at a Swiss resort. He was involved in growing cotton in Egypt with the late Sir Ernest Cassel. When he heard I was from New York, he immediately asked me about Percy Thomas. He received and read Thomas’s market reports without fail.

Thomas, I always thought, went about his business scientifically. He was a true speculator, a thinker with the vision of a dreamer and the courage of a fighting man—an unusually well-informed man, who knew both the theory and the practice of trading in cotton. He loved to hear and to express ideas and theories and abstractions, and at the same time there was mighty little about the practical side of the cotton market or the psychology of cotton traders that he did not know, for he had been trading for years and had made and lost vast sums.

I always thought Thomas approached his business scientifically. He was a true speculator, a thinker with a dreamer’s vision and a fighter’s courage. He was unusually well informed, knowing both the theory and practice of cotton trading. He loved hearing and expressing ideas, theories, and abstract concepts. At the same time, there was very little he didn’t know about the practical side of the cotton market or the psychology of cotton traders. He had traded for years and had made and lost vast sums.

After the failure of his old Stock Exchange firm of Sheldon & Thomas he went it alone. Inside of two years he came back, almost spectacularly. I remember reading in the Sun that the first thing he did when he got back on his feet financially was to pay off his old creditors in full, and the next was to hire an expert to study and determine for him how he had best invest a million dollars. This expert examined the properties and analysed the reports of several companies and then recommended the purchase of Delaware & Hudson stock.

After his old Stock Exchange firm, Sheldon & Thomas, failed, he went out on his own. Within two years, he had made an almost spectacular comeback. I remember reading in the Sun that, once he was financially stable again, he first paid his old creditors in full. Then he hired an expert to determine how best to invest a million dollars. The expert examined the properties and analyzed the reports of several companies. He then recommended buying Delaware & Hudson stock.

Well, after having failed for millions and having come back with more millions, Thomas was cleaned out as the result of his deal in March Cotton. There wasn’t much time wasted after he came to see me. He proposed that we form a working alliance. Whatever information he got he would immediately turn over to me before passing it on to the public. My part would be to do the actual trading, for which he said I had a special genius and he hadn’t.

Well, Thomas had lost millions and then made millions again. But his deal in March Cotton wiped him out. After he came to see me, he wasted little time. He proposed that we work together. He would immediately share any information he got with me before passing it on to the public. My part would be to do the actual trading. He said I had a special genius for trading, and he didn’t.

That did not appeal to me for a number of reasons. I told him frankly that I did not think I could run in double harness and wasn’t keen about trying to learn. But he insisted that it would be an ideal combination until I said flatly that I did not want to have anything to do with influencing other people to trade.

That did not appeal to me for several reasons. I told him frankly that I did not think I could work as a partner, and I was not eager to learn. But he insisted we would make an ideal team. Finally, I told him flatly that I wanted nothing to do with persuading other people to trade.

“If I fool myself,” I told him, “I alone suffer and I pay the bill at once. There are no drawn-out payments or unexpected annoyances. I play a lone hand by choice and also because it is the wisest and cheapest way to trade. I get my pleasure out of matching my brains against the brains of other traders—men whom I have never seen and never talked to and never advised to buy or sell and never expect to meet or know. When I make money I make it backing my own opinions. I don’t sell them or capitalise them. If I made money in any other way I would imagine I had not earned it. Your proposition does not interest me because I am interested in the game only as I play it for myself and in my own way.”

“If I fool myself,” I told him, “I’m the only one who suffers, and I pay the price right away. There are no drawn-out payments or unexpected annoyances. I trade alone by choice and because it’s the wisest and cheapest way to trade. I enjoy matching my wits against other traders. I’ve never seen or spoken to these men, and I’ve never advised them to buy or sell. I don’t expect to meet or know them. When I make money, I make it by backing my own opinions. I don’t sell my opinions or make money from them in other ways. If I made money any other way, I’d feel I hadn’t earned it. Your proposition doesn’t interest me because I’m only interested in playing the game for myself and in my own way.”

He said he was sorry I felt the way I did, and tried to convince me that I was wrong in rejecting his plan. But I stuck to my views. The rest was a pleasant talk. I told him I knew he would “come back” and that I would consider it a privilege if he would allow me to be of financial assistance to him. But he said he could not accept any loans from me. Then he asked me about my July deal and I told him all about it; how I had gone into it and how much cotton I bought and the price and other details. We chatted a little more and then he went away.

He said he was sorry I felt that way. He tried to convince me that I was wrong to reject his plan. But I stuck to my views. The rest of our conversation was pleasant. I told him I knew he would “come back.” I also said I would consider it a privilege if he would let me help him financially. But he said he could not accept any loans from me. Then he asked about my July deal, and I told him all about it. I explained how I got into the deal, how much cotton I bought, the price, and other details. We chatted a little more, and then he left.

When I said to you some time ago that a speculator has a host of enemies, many of whom successfully bore from within, I had in mind my many mistakes. I have learned that a man may possess an original mind and a lifelong habit of independent thinking and withal be vulnerable to attacks by a persuasive personality. I am fairly immune from the commoner speculative ailments, such as greed and fear and hope. But being an ordinary man I find I can err with great ease.

Some time ago, I told you that a speculator has many enemies, including many that successfully attack from within. I was thinking of my many mistakes. I have learned that a man can have an original mind and a lifelong habit of thinking independently. Yet he can still be vulnerable to a persuasive personality. I am fairly resistant to the more common troubles of speculation, such as greed, fear, and hope. But I am an ordinary man, and I find that I can make mistakes very easily.

I ought to have been on my guard at this particular time because not long before that I had had an experience that proved how easily a man may be talked into doing something against his judgment and even against his wishes. It happened in Harding’s office. I had a sort of private office—a room that they let me occupy by myself—and nobody was supposed to get to me during market hours without my consent. I didn’t wish to be bothered and, as I was trading on a very large scale and my account was fairly profitable, I was pretty well guarded.

I should have been on my guard at this time. Not long before, I had learned how easily a man can be talked into doing something against his judgment and even his wishes. It happened in Harding’s office. I had a kind of private office, a room they let me use by myself. No one was supposed to see me during market hours without my permission. I didn’t want to be bothered. And because I was trading on a very large scale and my account was fairly profitable, I was pretty well protected from interruptions.

One day just after the market closed I heard somebody say, “Good afternoon, Mr. Livingston.”

One day, just after the market closed, I heard someone say, “Good afternoon, Mr. Livingston.”

I turned and saw an utter stranger—a chap of about thirty-five. I could not understand how he’d got in, but there he was. I concluded his business with me had passed him. But I didn’t say anything. I just looked at him and pretty soon he said, “I came to see you about that Walter Scott,” and he was off.

I turned and saw a complete stranger, a man about thirty-five. I couldn’t understand how he had gotten in, but there he was. I figured his business with me had gotten him in. But I said nothing. I just looked at him. Soon he said, “I came to see you about that Walter Scott,” and he was off.

He was a book agent. Now, he was not particularly pleasing of manner or skillful of speech. Neither was he especially attractive to look at. But he certainly had personality. He talked and I thought I listened. But I do not know what he said. I don’t think I ever knew, not even at the time. When he finished his monologue he handed me first his fountain pen and then a blank form, which I signed. It was a contract to take a set of Scott’s works for five hundred dollars.

He was a book salesman. He was not particularly pleasant or a skillful speaker. He was not especially attractive, either. But he certainly had personality. He talked, and I thought I listened. But I don’t know what he said. I don’t think I ever knew, not even at the time. When he finished his monologue, he handed me his fountain pen and then a blank form. I signed it. It was a contract to buy a set of Scott’s works for five hundred dollars.

The moment I signed I came to. But he had the contract safe in his pocket. I did not want the books. I had no place for them. They weren’t of any use whatever to me. I had nobody to give them to. Yet I had agreed to buy them for five hundred dollars.

The moment I signed, I came to my senses. But he already had the contract safely in his pocket. I didn’t want the books. I had no place for them. They were no use to me at all. I had no one to give them to. Yet I had agreed to buy them for five hundred dollars.

I am so accustomed to losing money that I never think first of that phase of my mistakes. It is always the play itself, the reason why. In the first place I wish to know my own limitations and habits of thought. Another reason is that I do not wish to make the same mistake a second time. A man can excuse his mistakes only by capitalising them to his subsequent profit.

I’m so used to losing money that I don’t think first about the money I’ve lost when I make a mistake. I always think about the trade itself and why I made it. First, I want to understand my own limits and habits of thought. I also don’t want to make the same mistake twice. A man can only excuse his mistakes by learning from them and profiting later.

Well, having made a five-hundred dollar mistake but not yet having localised the trouble, I just looked at the fellow to size him up as a first step. I’ll be hanged if he didn’t actually smile at me—an understanding little smile! He seemed to read my thoughts. I somehow knew that I did not have to explain anything to him; he knew it without my telling him. So I skipped the explanations and the preliminaries and asked him, “How much commission will you get on that five hundred dollar order?”

Well, I had made a five-hundred-dollar mistake, but I still hadn’t figured out what had gone wrong. So I started by looking at the fellow to size him up. I’ll be darned if he didn’t actually smile at me, a little smile of understanding! He seemed to read my thoughts. Somehow, I knew I didn’t have to explain anything to him. He knew without my telling him. So I skipped the explanations and small talk and asked him, “How much commission will you get on that five-hundred-dollar order?”

He promptly shook his head and said, “I can’t do it! Sorry!”

He immediately shook his head and said, “I can’t do it! Sorry!”

“How much do you get?” I persisted.

“How much do you get?” I kept asking.

“A third. But I can’t do it!” he said.

“A third of five hundred dollars is one hundred and sixty-six dollars and sixty-six cents. I’ll give you two hundred dollars cash if you give me back that signed contract.” And to prove it I took the money out of my pocket.

“One third of five hundred dollars is one hundred sixty-six dollars and sixty-six cents. I’ll give you two hundred dollars in cash if you give me back the signed contract.” To show I meant it, I took the money out of my pocket.

“I told you I couldn’t do it,” he said.

“Do all of your customers make the same offer to you?” I asked.

“Do all your customers make you the same offer?” I asked.

“No,” he answered.

“Then why were you so sure that I was going to make it?”

“Then why were you so sure I was going to make it?”

“It is what your type of sport would do. You are a first-class loser and that makes you a first-class business man. I am much obliged to you, but I can’t do it.”

“That's what a good sport like you would do. You take losses very well, and that makes you an excellent businessman. I really appreciate it, but I can't do it.”

“Now tell me why you do not wish to make more than your commission?”

“Now tell me why you don’t want to make more than your commission?”

“It isn’t that exactly,” he said. “I am not working just for the commission.”

“Not exactly,” he said. “I’m not working just for the commission.”

“What are you working for then?”

“What are you working for, then?”

“For the commission and the record,” he answered.

“For the commission and the record,” he replied.

“What record?”

“Mine.”

“What are you driving at?”

“What are you getting at?”

“Do you work for money alone?” he asked me.

“Do you work only for money?” he asked me.

“Yes,” I said.

“No.” And he shook his head. “No, you don’t. You wouldn’t get enough fun out of it. You certainly do not work merely to add a few more dollars to your bank account and you are not in Wall Street because you like easy money. You get your fun some other way. Well, same here.”

“No.” He shook his head. “No, you don’t. You wouldn’t have enough fun doing it. You certainly don’t work just to add a few more dollars to your bank account. And you’re not on Wall Street because you like easy money. You get your fun some other way. Well, same here.”

I did not argue but asked him, “And how do you get your fun?”

I didn't argue, but asked him, “And how do you have fun?”

“Well,” he confessed, “we’ve all got a weak spot.”

“Well,” he admitted, “we all have a weak spot.”

“And what’s yours?”

“Vanity,” he said.

“Well,” I told him, “you’ve succeeded in getting me to sign on. Now I want to sign off, and I am paying you two hundred dollars for ten minutes’ work. Isn’t that enough for your pride?”

“Well,” I told him, “you managed to get me to sign on. Now I want to sign off. I’m paying you two hundred dollars for ten minutes’ work. Isn’t that enough to satisfy your pride?”

“No,” he answered. “You see, all the rest of the bunch have been working Wall Street for months and failed to make expenses. They said it was the fault of the goods and the territory. So the office sent for me to prove that the fault was with their salesmanship and not with the books or the place. They were working on a 25 per cent commission. I was in Cleveland, where I sold eighty-two sets in two weeks. I am here to sell a certain number of sets not only to people who did not buy from the other agents but to people they couldn’t even get to see. That’s why they give me 33⅓ per cent.”

“No,” he answered. “You see, all the other agents have been working Wall Street for months. They haven’t even earned enough to cover their expenses. They blamed the books and the territory. So the office sent for me to prove that the problem was their salesmanship, not the books or the place. They were working on a 25 percent commission. I was in Cleveland, where I sold eighty-two sets in two weeks. I’m here to sell a certain number of sets to people who didn’t buy from the other agents. I’m also here to sell to people the other agents couldn’t even get to see. That’s why they give me 33⅓ percent.”

“I can’t quite figure out how you sold me that set.”

“I still can’t figure out how you sold me that set.”

“Why,” he said consolingly, “I sold J. P. Morgan a set.”

“Why, I sold J. P. Morgan a set,” he said reassuringly.

“No, you didn’t,” I said.

He wasn’t angry. He simply said, “Honest, I did.”

He wasn’t angry. He simply said, “Honestly, I did.”

“A set of Walter Scott to J. P. Morgan, who not only has some fine editions but probably the original manuscripts of some of the novels as well?”

“A set of Walter Scott’s books for J. P. Morgan, who already has some fine editions? He probably has the original manuscripts of some of the novels, too.”

“Well, here’s his John Hancock.” And he promptly flashed on me a contract signed by J. P. Morgan himself. It might not have been Mr. Morgan’s signature, but it did not occur to me to doubt it at the time. Didn’t he have mine in his pocket? All I felt was curiosity. So I asked him, “How did you get past the librarian?”

“Well, here’s his signature.” He quickly showed me a contract signed by J. P. Morgan himself. The signature might not have been Mr. Morgan’s, but I didn’t think to doubt it at the time. Didn’t he have my signature in his pocket? All I felt was curiosity. So I asked him, “How did you get past the librarian?”

“I didn’t see any librarian. I saw the Old Man himself. In the office.”

“I didn’t see a librarian. I saw the Old Man himself. In the office.”

“That’s too much!” I said. Everybody knew that it was much harder to get into Mr. Morgan’s private office empty handed than into the White House with a parcel that ticked like an alarm clock.

“That’s too much!” I said. Everyone knew it was much harder to enter Mr. Morgan’s private office empty-handed than to enter the White House carrying a package that ticked like an alarm clock.

But he declared, “I did.”

But he insisted, “I did.”

“But how did you get into his office?”

“How did I get into yours?” he retorted.

“How did I get into yours?” he shot back.

“I don’t know. You tell me,” I said.

“Well, the way I got into Morgan’s office and the way I got into yours are the same. I just talked to the fellow at the door whose business it was not to let me in. And the way I got Morgan to sign was the same way I got you to sign. You weren’t signing a contract for a set of books. You just took the fountain pen I gave you and did what I asked you to do with it. No difference. Same as you.”

“Well, I got into Morgan’s office the same way I got into yours. I just talked to the man at the door whose job was to keep me out. And I got Morgan to sign the same way I got you to sign. You weren’t signing a contract for a set of books. You just took the fountain pen I gave you and did what I asked you to do with it. No difference. Same as you.”

“And is that really Morgan’s signature?” I asked him, about three minutes late with my skepticism.

“And is that really Morgan’s signature?” I asked him, voicing my doubts about three minutes too late.

“Sure! He learned how to write his name when he was a boy.”

“And that’s all there is to it?”

“That’s all,” he answered. “I know exactly what I am doing. That’s all the secret there is. I am much obliged to you. Good day, Mr. Livingston.” And he started to go out.

“That’s all,” he answered. “I know exactly what I’m doing. That’s the whole secret. Thank you. Goodbye, Mr. Livingston.” And he started to leave.

“Hold on,” I said. “I’m bound to have you make an even two hundred dollars out of me.” And I handed him thirty-five dollars.

“Hold on,” I said. “I’m determined to make sure you get an even two hundred dollars from me.” And I handed him thirty-five dollars.

He shook his head. Then: “No,” he said. “I can’t do that. But I can do this!” And he took the contract from his pocket, tore it in two and gave me the pieces.

He shook his head. Then he said, “No, I can’t do that. But I can do this!” He took the contract from his pocket, tore it in two, and gave me the pieces.

I counted two hundred dollars and held the money before him, but he again shook his head.

I counted out two hundred dollars and held it in front of him, but he shook his head again.

“Isn’t that what you meant?” I said.

“No.”

“Then, why did you tear up the contract?”

“Then why did you tear up the contract?”

“Because you did not whine, but took it as I would have taken it myself had I been in your place.”

“Because you didn’t complain, but handled it as I would have in your place.”

“But I offered you the two hundred dollars of my own accord,” I said.

“But I offered you the two hundred dollars on my own,” I said.

“I know; but money isn’t everything.”

“I know, but money isn’t everything.”

Something in his voice made me say, “You’re right; it isn’t. And now what do you really want me to do for you?”

Something in his voice made me say, “You’re right. It isn’t. Now, what do you really want me to do for you?”

“You’re quick, aren’t you?” he said. “Do you really want to do something for me?”

“Yes,” I told him, “I do. But whether I will or not depends what it is you have in mind.”

“Yes,” I told him, “I do. But whether I will depends on what you have in mind.”

“Take me with you into Mr. Ed Harding’s office and tell him to let me talk to him three minutes by the clock. Then leave me alone with him.”

“Come with me to Mr. Ed Harding’s office and ask him to let me talk to him for exactly three minutes. Then leave me alone with him.”

I shook my head and said, “He is a good friend of mine.”

I shook my head and said, “He’s a good friend of mine.”

“He’s fifty years old and a stock broker,” said the book agent.

“He’s fifty years old and a stockbroker,” said the book agent.

That was perfectly true, so I took him into Ed’s office. I did not hear anything more from or about that book agent. But one evening some weeks later when I was going uptown I ran across him in a Sixth Avenue L train. He raised his hat very politely and I nodded back. He came over and asked me, “How do you do, Mr. Livingston? And how is Mr. Harding?”

That was completely true, so I took him into Ed’s office. I heard nothing more from or about the book salesman. But a few weeks later, I ran into him one evening on a Sixth Avenue elevated train while going uptown. He politely raised his hat, and I nodded back. He came over and asked me, “How are you, Mr. Livingston? And how is Mr. Harding?”

“He’s well. Why do you ask?” I felt he was holding back a story.

“He’s well. Why do you ask?” I sensed he was holding back a story.

“I sold him two thousand dollars’ worth of books that day you took me in to see him.”

“I sold him $2,000 worth of books the day you took me to see him.”

“He never said a word to me about it,” I said.

“No; that kind doesn’t talk about it.”

“No, that kind doesn’t talk about it.”

“What kind doesn’t talk?”

“The kind that never makes mistakes on account of its being bad business to make them. That kind always knows what he wants and nobody can tell him different. That is the kind that’s educating my children and keeps my wife in good humor. You did me a good turn, Mr. Livingston. I expected it when I gave up the two hundred dollars you were so anxious to present to me.”

“The kind who never makes mistakes because mistakes are bad for business. He always knows what he wants, and nobody can tell him otherwise. He’s the kind who pays for my children’s education and keeps my wife happy. You did me a favor, Mr. Livingston. I expected you would when I gave up the two hundred dollars you were so eager to give me.”

“And if Mr. Harding hadn’t given you an order?”

“Oh, but I knew he would. I had found out what kind of man he was. He was a cinch.”

“Oh, but I knew he would. I had figured out what kind of man he was. He was easy to predict.”

“Yes. But if he hadn’t bought any books?” I persisted.

“Yes. But what if he hadn’t bought any books?” I pressed.

“I’d have come back to you and sold you something. Good day, Mr. Livingston. I am going to see the mayor.” And he got up as we pulled up at Park Place.

“I would have come back to you and sold you something. Goodbye, Mr. Livingston. I’m going to see the mayor.” He stood up as we pulled up at Park Place.

“I hope you sell him ten sets,” I said. His Honor was a Tammany man.

“I’m a Republican, too,” he said, and went out, not hastily, but leisurely, confident that the train would wait. And it did.

“I’m a Republican, too,” he said. He went out slowly, confident that the train would wait. And it did.

I have told you this story in such detail because it concerned a remarkable man who made me buy what I did not wish to buy. He was the first man who did that to me. There never should have been a second, but there was. You can never bank on there being but one remarkable salesman in the world or on complete immunization from the influence of personality.

I have told this story in detail because it concerned a remarkable man who made me buy something I didn't want. He was the first man to do that to me. There should never have been a second, but there was. You can never count on there being only one remarkable salesman in the world. Nor can you count on being completely immune to the influence of personality.

When Percy Thomas left my office, after I had pleasantly but definitely declined to enter into a working alliance with him, I would have sworn that our business paths would never cross. I was not sure I’d ever see him again. But on the very next day he wrote me a letter thanking me for my offers of help and inviting me to come and see him. I answered that I would. He wrote again. I called.

When Percy Thomas left my office, I would have sworn our business paths would never cross. I had politely but firmly declined to work with him. I wasn’t sure I would ever see him again. But the very next day, he wrote to thank me for offering to help and invited me to visit him. I replied that I would. He wrote again. I went to see him.

I got to see a great deal of him. It was always a pleasure for me to listen to him, he knew so much and he expressed his knowledge so interestingly. I think he is the most magnetic man I ever met.

I spent a lot of time with him. I always enjoyed listening to him because he knew so much and shared his knowledge in such an interesting way. I think he is the most magnetic man I have ever met.

We talked of many things, for he is a widely read man with an amazing grasp of many subjects and a remarkable gift for interesting generalization. The wisdom of his speech is impressive; and as for plausibility, he hasn’t an equal. I have heard many people accuse Percy Thomas of many things, including insincerity, but I sometimes wonder if his remarkable plausibility does not come from the fact that he first convinces himself so thoroughly as to acquire thereby a greatly increased power to convince others.

We talked about many things, because he is widely read and has an amazing grasp of many subjects. He also has a remarkable gift for making interesting general observations. His words are impressively wise, and no one can match him in sounding convincing. I have heard many people accuse Percy Thomas of many things, including insincerity. But I sometimes wonder if he sounds so convincing because he first convinces himself so thoroughly. Perhaps that makes him much more capable of convincing others.

Of course we talked about market matters at great length. I was not bullish on cotton, but he was. I could not see the bull side at all, but he did. He brought up so many facts and figures that I ought to have been overwhelmed, but I wasn’t. I couldn’t disprove them because I could not deny their authenticity, but they did not shake my belief in what I read for myself. But he kept at it until I no longer felt sure of my own information as gathered from the trade papers and the dailies. That meant I couldn’t set the market with my own eyes. A man cannot be convinced against his own convictions, but he can be talked into a state of uncertainty and indecision, which is even worse, for that means that he cannot trade with confidence and comfort.

Of course, we talked at length about the markets. I didn’t think cotton prices would rise, but he did. I couldn’t see any reason to expect a rise, but he could. He presented so many facts and figures that I should have been overwhelmed, but I wasn’t. I couldn’t disprove them because I couldn’t deny they were genuine. But they didn’t shake my belief in what I had read for myself. Still, he kept at it until I was no longer sure of the information I had gathered from trade publications and daily newspapers. That meant I couldn’t see the market for myself. You can’t be persuaded to abandon your convictions, but someone can talk you into feeling uncertain and indecisive. That’s even worse because it means you can’t trade with confidence and comfort.

I cannot say that I got all mixed up, exactly, but I lost my poise; or rather, I ceased to do my own thinking. I cannot give you in detail the various steps by which I reached the state of mind that was to prove so costly to me. I think it was his assurances of the accuracy of his figures, which were exclusively his, and the undependability of mine, which were not exclusively mine, but public property. He harped on the utter reliability, as proved time and again, of all his ten thousand correspondents throughout the South. In the end I came to read conditions as he himself read them—because we were both reading from the same page of the same book, held by him before my eyes. He has a logical mind. Once I accepted his facts it was a cinch that my own conclusions, derived from his facts, would agree with his own.

I cannot say I was completely confused, exactly, but I lost my composure. Or rather, I stopped thinking for myself. I cannot describe every step that led me to a state of mind that would cost me so much. I think it was because he assured me that his figures were accurate and mine were unreliable. His figures were exclusively his, while mine were not exclusively mine but public property. He kept repeating that all ten thousand of his correspondents throughout the South had proved utterly reliable, time and again. In the end, I came to see conditions as he did. We were both reading from the same page of the same book, which he held before my eyes. He has a logical mind. Once I accepted his facts, it was a sure thing that my own conclusions from those facts would match his.

When he began his talks with me about the cotton situation I not only was bearish but I was short of the market. Gradually, as I began to accept his facts and figures, I began to fear I had been basing my previous position on misinformation. Of course I could not feel that way and not cover. And once I had covered because Thomas made me think I was wrong, I simply had to go long. It is the way my mind works. You know, I have done nothing in my life but trade in stocks and commodities. I naturally think that if it is wrong to be bearish it must be right to be a bull. And if it is right to be a bull it is imperative to buy. As my old Palm Beach friend said Pat Hearne used to say, “You can’t tell till you bet!” I must prove whether I am right on the market or not; and the proofs are to be read only in my brokers’ statements at the end of the month.

When he began talking to me about the cotton market, I was bearish and had sold short. Gradually, as I came to accept his facts and figures, I began to fear that my position was based on bad information. Of course, once I felt that way, I had to cover my short position. And once I had covered because Thomas made me think I was wrong, I simply had to go long. That is how my mind works. You know, all I have ever done in my life is trade stocks and commodities. I naturally think that if it is wrong to be bearish, it must be right to be bullish. And if it is right to be bullish, I have to buy. As my old Palm Beach friend said Pat Hearne used to say, “You can’t tell till you bet!” I have to find out whether I am right about the market. The only proof is in my brokers’ statements at the end of the month.

I started in to buy cotton and in a jiffy I had my usual line, about sixty thousand bales. It was the most asinine play of my career. Instead of standing or falling by my own observation and deductions I was merely playing another man’s game. It was eminently fitting that my silly plays should not end with that. I not only bought when I had no business to be bullish but I didn’t accumulate my line in accordance with the promptings of experience. I wasn’t trading right. Having listened, I was lost.

I started buying cotton, and in no time I had my usual position of about sixty thousand bales. It was the stupidest trade of my career. Instead of relying on my own observations and conclusions, I was playing another man’s game. Fittingly, my foolishness didn’t end there. I bought cotton when I had no reason to expect prices to rise. And I built up my position without following what experience had taught me. I wasn’t trading the right way. Once I listened to someone else, I was lost.

The market was not going my way. I am never afraid or impatient when I am sure of my position. But the market didn’t act the way it should have acted had Thomas been right. Having taken the first wrong step I took the second and the third, and of course it muddled me all up. I allowed myself to be persuaded not only into not taking my loss but into holding up the market. That is a style of play foreign to my nature and contrary to my trading principles and theories. Even as a boy in the bucket shops I had known better. But I was not myself. I was another man—a Thomasized person.

The market was not going my way. I am never afraid or impatient when I am sure of my position. But the market was not behaving as it should have if Thomas had been right. After taking the first wrong step, I took the second and third. Of course, that left me completely confused. I let myself be persuaded not only to avoid taking my loss but also to support the market. That kind of trading goes against my nature and my trading principles and theories. Even as a boy in the bucket shops, I had known better. But I was not myself. I was another man, a Thomasized person.

I not only was long of cotton but I was carrying a heavy line of wheat. That was doing famously and showed me a handsome profit. My fool efforts to bolster up cotton had increased my line to about one hundred and fifty thousand bales. I may tell you that about this time I was not feeling very well. I don’t say this to furnish an excuse for my blunders, but merely to state a pertinent fact. I remember I went to Bayshore for a rest.

I was not only long on cotton but also held a large position in wheat. The wheat was doing very well and showing me a handsome profit. My foolish efforts to prop up cotton had increased my position to about 150,000 bales. Around this time, I was not feeling very well. I don’t say this to excuse my blunders, but simply to mention a relevant fact. I remember going to Bayshore for a rest.

While there I did some thinking. It seemed to me that my speculative commitments were overlarge. I am not timid as a rule, but I got to feeling nervous and that made me decide to lighten my load. To do this I must clean up either the cotton or the wheat.

While I was there, I did some thinking. It seemed that my speculative positions were too large. I’m not usually timid, but I began to feel nervous and decided to reduce my holdings. To do that, I had to close out either my cotton or my wheat positions.

It seems incredible that knowing the game as well as I did and with an experience of twelve or fourteen years of speculating in stocks and commodities I did precisely the wrong thing. The cotton showed me a loss and I kept it. The wheat showed me a profit and I sold it out. It was an utterly foolish play, but all I can say in extenuation is that it wasn’t really my deal, but Thomas’. Of all speculative blunders there are few greater than trying to average a losing game. My cotton deal proved it to the hilt a little later. Always sell what shows you a loss and keep what shows you a profit. That was so obviously the wise thing to do and was so well known to me that even now I marvel at myself for doing the reverse.

It seems incredible that I knew the game so well and had twelve or fourteen years of experience speculating in stocks and commodities. Yet I did exactly the wrong thing. The cotton showed me a loss, and I kept it. The wheat showed me a profit, and I sold it. It was a completely foolish move. But all I can say in my defense is that it wasn't really my deal, but Thomas'. Of all the mistakes a speculator can make, few are greater than trying to average a losing position. My cotton deal proved that beyond doubt a little later. Always sell what shows you a loss and keep what shows you a profit. That was so obviously the wise thing to do, and I knew it so well, that even now I'm amazed I did the opposite.

And so I sold my wheat, deliberately cut short my profit in it. After I got out of it the price went up twenty cents a bushel without stopping. If I had kept it I might have taken a profit of about eight million dollars. And having decided to keep on with the losing proposition I bought more cotton!

So I sold my wheat, deliberately cutting my profit short. After I sold it, the price rose twenty cents a bushel without stopping. If I had held on to the wheat, I might have made about eight million dollars. And having decided to stick with the losing trade, I bought more cotton!

I remember very clearly how every day I would buy cotton, more cotton. And why do you think I bought it? To keep the price from going down! If that isn’t a supersucker play, what is? I simply kept putting up more and more money—more money to lose eventually. My brokers and my intimate friends couldn’t understand it; and they don’t to this day. Of course if the deal had turned out differently I would have been a wonder. More than once I was warned against placing too much reliance on Percy Thomas’ brilliant analyses. To this I paid no heed, but kept on buying cotton to keep it from going down. I was even buying it in Liverpool. I accumulated four hundred and forty thousand bales before I realized what I was doing. And then it was too late. So I sold out my line.

I remember very clearly how I bought cotton every day, more and more cotton. And why do you think I bought it? To keep the price from falling! If that isn’t a supersucker play, what is? I just kept putting up more and more money, more money to lose eventually. My brokers and close friends couldn’t understand it, and they still don’t. Of course, if the deal had turned out differently, I would have been a wonder. More than once, I was warned not to rely too much on Percy Thomas’ brilliant analyses. I ignored the warnings and kept buying cotton to keep the price from falling. I was even buying cotton in Liverpool. I had accumulated four hundred and forty thousand bales before I realized what I was doing. By then it was too late. So I sold all my cotton.

I lost nearly all that I had made out of all my other deals in stocks and commodities. I was not completely cleaned out, but I had left fewer hundreds of thousands than I had millions before I met my brilliant friend Percy Thomas. For me of all men to violate all the laws that experience had taught me to observe in order to prosper was more than asinine.

I lost nearly everything I had made from all my other stock and commodities deals. I wasn’t completely wiped out, but I had fewer hundreds of thousands left than I had millions before meeting my brilliant friend Percy Thomas. Of all people, I should have known better than to break all the rules experience had taught me to follow to prosper. It was more than stupid.

To learn that a man can make foolish plays for no reason whatever was a valuable lesson. It cost me millions to learn that another dangerous enemy to a trader is his susceptibility to the urgings of a magnetic personality when plausibly expressed by a brilliant mind. It has always seemed to me, however, that I might have learned my lesson quite as well if the cost had been only one million. But Fate does not always let you fix the tuition fee. She delivers the educational wallop and presents her own bill, knowing you have to pay it, no matter what the amount may be. Having learned what folly I was capable of I closed that particular incident. Percy Thomas went out of my life.

Learning that a person can make foolish trades for no reason at all was a valuable lesson. It cost me millions to learn about another danger to a trader. A trader can be swayed by the persuasive advice of a charismatic person with a brilliant mind. Still, it has always seemed to me that I could have learned the lesson just as well for only one million. But Fate does not always let you set the tuition fee. She delivers the blow that teaches you and presents her own bill. She knows you have to pay it, no matter how much it is. Once I had learned what foolish things I was capable of, I put that incident behind me. Percy Thomas went out of my life.

There I was, with more than nine-tenths of my stake, as Jim Fisk used to say, gone where the woodbine twineth—up the spout. I had been a millionaire rather less than a year. My millions I had made by using brains, helped by luck. I had lost them by reversing the process. I sold my two yachts and was decidedly less extravagant in my manner of living.

There I was, with more than nine-tenths of my money gone, as Jim Fisk used to say, down the drain. I had been a millionaire for less than a year. I had made my millions using my brains, with some help from luck. I had lost them by doing the reverse. I sold my two yachts and lived much less extravagantly.

But that one blow wasn’t enough. Luck was against me. I ran up first against illness and then against the urgent need of two hundred thousand dollars in cash. A few months before that sum would have been nothing at all; but now it meant almost the entire remnant of my fleet-winged fortune. I had to supply the money and the question was: Where would I get it? I didn’t want to take it out of the balance I kept at my brokers’ because if I did I wouldn’t have much of a margin left for my own trading; and I needed trading facilities more than ever if I was to win back my millions quickly. There was only one alternative that I could see, and that was to take it out of the stock market!

But that one blow wasn’t enough. Luck was against me. First I fell ill, and then I urgently needed $200,000 in cash. A few months earlier, that sum would have been nothing at all. But now it was almost all that remained of my fast-vanishing fortune. I had to come up with the money. The question was: Where would I get it? I didn’t want to take it from the balance I kept with my brokers. If I did, I wouldn’t have much margin left for my own trading. And I needed access to trading more than ever if I was going to win back my millions quickly. I could see only one alternative: take the money out of the stock market!

Just think of it! If you know much about the average customer of the average commission house you will agree with me that the hope of making the stock market pay your bill is one of the most prolific sources of loss in Wall Street. You will chip out all you have if you adhere to your determination.

Just think about it! If you know much about the average brokerage customer, you will agree with me. Hoping to make the stock market pay your bills is one of the biggest causes of losses on Wall Street. If you stick to that goal, you will lose everything you have.

Why, in Harding’s office one winter a little bunch of high flyers spent thirty or forty thousand dollars for an overcoat—and not one of them lived to wear it. It so happened that a prominent floor trader—who since has become world-famous as one of the dollar-a-year men—came down to the Exchange wearing a fur overcoat lined with sea otter. In those days, before furs went up sky high, that coat was valued at only ten thousand dollars. Well, one of the chaps in Harding’s office, Bob Keown, decided to get a coat lined with Russian sable. He priced one uptown. The cost was about the same, ten thousand dollars.

Why, one winter in Harding’s office, a small group of high rollers spent thirty or forty thousand dollars on an overcoat. And not one of them lived to wear it. A prominent floor trader had come to the Exchange wearing a fur overcoat lined with sea otter. He has since become world-famous as one of the dollar-a-year men. In those days, before fur prices shot up, the coat was valued at only ten thousand dollars. Well, one of the men in Harding’s office, Bob Keown, decided to get a coat lined with Russian sable. He checked the price of one uptown. It cost about the same, ten thousand dollars.

“That’s the devil of a lot of money,” objected one of the fellows.

“That’s a hell of a lot of money,” one of the guys objected.

“Oh, fair! Fair!” admitted Bob Keown amiably. “About a week’s wages—unless you guys promise to present it to me as a slight but sincere token of the esteem in which you hold the nicest man in the office. Do I hear the presentation speech? No? Very well. I shall let the stock market buy it for me!”

“Oh, fair! Fair!” Bob Keown agreed good-naturedly. “About a week’s wages. Unless you guys promise to give it to me as a small but sincere token of your appreciation for the nicest man in the office. Do I hear a presentation speech? No? Fine. I’ll let the stock market buy it for me!”

“Why do you want a sable coat?” asked Ed Harding.

“It would look particularly well on a man of my inches,” replied Bob, drawing himself up.

“It would look especially good on a man of my height,” Bob replied, standing up straight.

“And how did you say you were going to pay for it?” asked Jim Murphy, who was the star tip-chaser of the office.

“And how did you say you were going to pay for it?” asked Jim Murphy, the office’s leading tip-chaser.

“By a judicious investment of a temporary character, James. That’s how,” answered Bob, who knew that Murphy merely wanted a tip.

“By making a smart short-term investment, James. That’s how,” Bob answered. He knew Murphy just wanted a tip.

Sure enough, Jimmy asked, “What stock are you going to buy?”

“Wrong as usual, friend. This is no time to buy anything. I propose to sell five thousand Steel. It ought to go down ten points at the least. I’ll just take two and a half points net. That is conservative, isn’t it?”

“Wrong as usual, friend. This is no time to buy anything. I plan to sell five thousand shares of Steel. Steel should fall at least ten points. I’ll settle for a net profit of two and a half points. That’s conservative, isn’t it?”

“What do you hear about it?” asked Murphy eagerly. He was a tall thin man with black hair and a hungry look, due to his never going out to lunch for fear of missing something on the tape.

“What do you hear about it?” Murphy asked eagerly. He was tall and thin, with black hair and a hungry look. He looked hungry because he never went out to lunch, for fear of missing something on the stock ticker.

“I hear that coat’s the most becoming I ever planned to get.” He turned to Harding and said, “Ed, sell five thousand U.S. Steel common at the market. To-day, darling!”

“I hear that coat is the most flattering one I ever planned to buy.” He turned to Harding and said, “Ed, sell five thousand shares of U.S. Steel common stock at the market price. Today, darling!”

He was a plunger, Bob was, and liked to indulge in humorous talk. It was his way of letting the world know that he had an iron nerve. He sold five thousand Steel, and the stock promptly went up. Not being half as big an ass as he seemed when he talked, Bob stopped his loss at one and a half points and confided to the office that the New York climate was too benign for fur coats. They were unhealthy and ostentatious. The rest of the fellows jeered. But it was not long before one of them bought some Union Pacific to pay for the coat. He lost eighteen hundred dollars and said sables were all right for the outside of a woman’s wrap, but not for the inside of a garment intended to be worn by a modest and intelligent man.

Bob was a big risk taker, and he liked to joke around. It was his way of letting the world know he had nerves of steel. He sold five thousand shares of Steel short, and the stock promptly went up. Bob was not half as much of a fool as he sounded, though. He cut his loss at one and a half points and told the office that New York’s climate was too mild for fur coats. They were unhealthy and showy. The other fellows jeered. But before long, one of them bought some Union Pacific stock to pay for the coat. He lost eighteen hundred dollars. He said sable was fine for the outside of a woman’s wrap, but not for the lining of a coat meant for a modest and intelligent man.

After that, one after another of the fellows tried to coax the market to pay for that coat. One day I said I would buy it to keep the office from going broke. But they all said that it wasn’t a sporting thing to do; that if I wanted the coat for myself I ought to let the market give it to me. But Ed Harding strongly approved of my intention and that same afternoon I went to the furrier’s to buy it. I found out that a man from Chicago had bought it the week before.

After that, the guys tried one after another to get the market to pay for the coat. One day I said I would buy the coat to keep the office from going broke. But they all said that wouldn’t be sporting. If I wanted the coat for myself, they said, I should let the market give it to me. But Ed Harding strongly approved of my plan, so that afternoon I went to the furrier’s to buy the coat. I found out that a man from Chicago had bought it the week before.

That was only one case. There isn’t a man in Wall Street who has not lost money trying to make the market pay for an automobile or a bracelet or a motor boat or a painting. I could build a huge hospital with the birthday presents that the tight-fisted stock market has refused to pay for. In fact, of all hoodoos in Wall Street I think the resolve to induce the stock market to act as a fairy godmother is the busiest and most persistent.

That was only one case. Every man on Wall Street has lost money trying to make the market pay for a car, bracelet, motorboat, or painting. I could build a huge hospital with all the birthday presents the stingy stock market has refused to pay for. In fact, I think trying to make the stock market act like a fairy godmother is Wall Street’s busiest and most persistent jinx.

Like all well-authenticated hoodoos this has its reason for being. What does a man do when he sets out to make the stock market pay for a sudden need? Why, he merely hopes. He gambles. He therefore runs much greater risks than he would if he were speculating intelligently, in accordance with opinions or beliefs logically arrived at after a dispassionate study of underlying conditions. To begin with, he is after an immediate profit. He cannot afford to wait. The market must be nice to him at once if at all. He flatters himself that he is not asking more than to place an even-money bet. Because he is prepared to run quick—say, stop his loss at two points when all he hopes to make is two points—he hugs the fallacy that he is merely taking a fifty-fifty chance. Why, I’ve known men to lose thousands of dollars on such trades, particularly on purchases made at the height of a bull market just before a moderate reaction. It certainly is no way to trade.

Like all well-established jinxes, this one has a reason behind it. What does a man do when he tries to make the stock market cover a sudden need? He just hopes. He gambles. So he takes much greater risks than he would if he were speculating intelligently. Intelligent speculation is based on opinions or beliefs reached logically after a dispassionate study of underlying conditions. To begin with, he wants an immediate profit. He cannot afford to wait. The market must be kind to him right away, if it is going to be kind at all. He tells himself he is only making an even-money bet. He is ready to get out quickly, say, by stopping his loss at two points when he hopes to gain only two. So he clings to the false idea that he is taking a fifty-fifty chance. Why, I’ve known men to lose thousands of dollars on trades like these. This was especially true of purchases made at the height of a bull market, just before a moderate pullback. It certainly is no way to trade.

Well, that crowning folly of my career as a stock operator was the last straw. It beat me. I lost what little my cotton deal had left me. It did even more harm, for I kept on trading—and losing. I persisted in thinking that the stock market must perforce make money for me in the end. But the only end in sight was the end of my resources. I went into debt, not only to my principal brokers but to other houses that accepted business from me without my putting up an adequate margin. I not only got in debt but I stayed in debt from then on.

Well, that final, foolish mistake in my career as a stock trader was the last straw. It defeated me. I lost the little my cotton deal had left me. Worse still, I kept trading and losing. I kept thinking the stock market had to make money for me eventually. But the only end in sight was the end of my money. I went into debt, not just to my main brokers, but to other firms that let me trade without enough margin. I not only got into debt, but stayed in debt from then on.