Business Adventures: Twelve Classic Tales from the World of Wall Street

by John Brooks

Evidence that people are selling stocks at a time when they ought to be eating lunch is always regarded as a serious matter.

A margin call is a demand for additional collateral from a customer who has borrowed money from his broker to buy stocks and whose stocks are now worth barely enough to cover the loan. If a customer is unwilling or unable to meet a margin call with more collateral, his broker will sell the margined stock as soon as possible; such sales may depress other stocks further, leading to more margin calls, leading to more stock sales, and so on down into the pit.

de la Vega’s cardinal rule: “Never give anyone the advice to buy or sell shares, because, where perspicacity is weakened, the most benevolent piece of advice can turn out badly.”