Inverted Reasoning and itsConsequences

Inverted Reasoning and its Consequences, IT is hard for the average man to oppose what app ears to b e the general drift of public opinion. In the stock market this is p erhaps harder than els ewhere ; for we all realize that the prices o f stocks must, in the long run , be controlled by public opinion.

The point we fail to rememb er is that publi c Opinion in a spe culative market is measured in dollars , not in p opulation . One man controlling on e million dollars has double the weight of five
hundred men with one $ thousand dollars each. Dollars are the horse power of the markets— th e mere numb er of men does not signify. Inverted Reasoning and itsConsequences

This is why th e great body of opinion appears to b e bullish at the top and bearish at the bottom. The multitude of small traders must b e, as a plain necessity ,long when pri c es ar e at the top , and short or out of the market at the bottom. The very fact that they are long at the top shows that they have b e en suppli ed with stocks from some source .

Again ,the man with one million dollars is a sil ent individual . The time when it was nec essary for him to talk is past—his money now do es the talking . But the on e thousand men who have on e thousand dollars each are conversational , fluent , verbos e to the last degre e ; and among thes e smaller traders are th e writers— the newspaper and news bureau men , and the manu facturers of gossip for brokerage houses.

It will be observed that the above cours e of reasoning l eads us to the conelusion that most of
‘th ose who write and talk ab out th e market are more likely to b e wrong than right , at least so far assp eculative fluctuations are concerned .

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