I gave McDevitt a thousand dollars and he went to Hoboken and did as I told him. He got to be one of the regulars. Then one day when I thought I saw a break impending I slipped Mac the word and he sold all they’d let him. I cleared twenty-eight hundred dollars that day, after giving Mac his rake-off and paying expenses, and I suspect Mac put down a little bet of his own besides. Less than a month after that, Teller closed his Hoboken branch. The police got busy. And, anyhow, it didn’t pay, though I only traded twice. We ran into a crazy bull market when stocks didn’t react enough to wipe out even the one-point margins, and, of course, all the customers were bulls and winning and pyramiding. No end of bucket shops busted all over the country.
Their game has changed. Trading in the old-fashioned bucket shop had some decided advantages over speculating in a reputable broker’s office. For one thing the automatic closing out of your trade when the margin reached the exhaustion point was the best kind of stop-loss order. You couldn’t get stung for more than you had put up and there was no danger of rotten execution of orders, and so on. In New York the shops never were as liberal with their patrons as I’ve heard they were in the West. Here they used to limit the possible profit on certain stocks of the football order to two points. Sugar and Tennessee Coal and Iron were among these. No matter if they moved ten points in ten minutes you could only make two on one ticket. They figured that otherwise the customer was getting too big odds; he stood to lose one dollar and to make ten. And then there were times when all the shops, including the biggest, refused to take orders on certain stocks. In 1900, on the day before Election Day, when it was foregone conclusion that McKinley would win, not a shop in the land let its customers buy stocks. The election odds were 3 to 1 on McKinley. By buying stocks on Monday you stood to make from three to six points or more. A man could bet on Bryan and buy stocks and make sure money. The bucket shops refused orders all that day.
If it hadn’t been for their refusing to take my business I never would have stopped trading with them. And then I never would have learned that there was much more to the game of stock speculation than to play for fluctuations of a few points.
III
It takes a man a long time to learn all the lessons of all his mistakes. They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock speculation.
I have heard of people who amuse themselves conducting imaginary operations in the stock market to prove with imaginary dollars how right they are. Sometimes these ghost gamblers make millions. It is very easy to be a plunger that way. It is like the old story of the man who was going to fight a duel the next day.
His second asked him, “Are you a good shot?”
“Well,” said the duelist, “I can snap the stem of a wineglass at twenty paces,” and he looked modest.
“That’s all very well,” said the unimpressed second. “But can you snap the stem of the wineglass while the wineglass is pointing a loaded pistol straight at your heart?”