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

by John Brooks

One of de la Vega’s observations about the Amsterdam traders was that they were “very clever in inventing reasons” for a sudden rise or fall in stock prices,

“the news [as such] is often of little value;” in the short run, the mood of the investors is what counts.

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.

After more than a decade of more or less constant profits to yourself and your customers, you get to think you’re pretty good. You’re on top of it. You can make money, and that’s that.

“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.”

various securities firms, increasing the aura of gloom. (“The expectation of an event creates a much deeper impression … than the event itself.”—de la Vega.)

“You keep modifying, and then modifying your modifications. Finally, you have to settle on something, because there isn’t any more time. If it weren’t for the deadline you’d probably go on modifying indefinitely.”

Whether or not the twenties were a golden age for the American people in general, they were assuredly a golden age for the American taxpayer.

Paradoxical as it may seem, the evolution of our income tax has been from a low-rate tax relying for revenue on the high income group to a high-rate tax relying on the middle and lower-middle income groups.

“EVERY nation has the government it deserves,”

All the evidence suggests that communication between people by whatever means, far from simply accomplishing its purpose, invariably breeds the need for more.)

In 1959, the year the company—then called Haloid Xerox, Inc.—introduced its first automatic xerographic office copier, its sales were thirty-three million dollars. In 1961, they were sixty-six million, in 1963 a hundred and seventy-six million, and in 1966 over half a billion.

The great advantage that Xerox had been enjoying was the one that the first to enter a new field always enjoys—the advantage of charging high prices.

He sold that after a few years, did a stint as a wholesale grocer on his own, and then, in 1919, began to build a chain of retail self-service markets, to which he gave the engaging name of Piggly Wiggly Stores. (When a Memphis business associate once asked him why he had chosen that name, he replied, “So people would ask me what you just did.”)

“The customer in a Piggly Wiggly Store rambles down aisle after aisle, on both sides of which are shelves. The customer collects his purchases and pays as he goes out.” Although Saunders did not know it, he had invented the supermarket.

[Starting in business] is like learning to walk after a long illness.… At first you have to think: move the right foot, move the left foot, etc. Then you are walking without thinking, and then walking is something one does with unconsciousness and utter confidence.

“I don’t think money makes much difference, as long as you have enough.”

I think I considered competence at defending yourself a means of preserving your personal independence. I learned that from my father. ‘Be your own man,’ he used to say.

All United States gold is kept at Fort Knox, at the New York Assay Office, or at the various mints; the gold deposited at the Federal Reserve Bank belongs to some seventy other countries—the largest depositors being European—which find it convenient to store a good part of their gold reserves there. Originally, most of them put gold there for safekeeping during the Second World War. After the war, the European nations—with the exception of France—not only left it in New York but greatly increased its quantity as their economies recovered.

A downward spiral develops: Rumors of further devaluations are constantly in the wind; the loss of confidence in other people’s money leads to a disinclination to do business across national borders; and international trade, upon which depend the food and shelter of hundreds of millions of people around the world, tends to decline. Just such a disaster followed the classic devaluation of all time, the departure of the pound from the old gold standard in 1931—an event that is still generally considered a major cause of the worldwide Depression of the thirties.

In 1914, Britain, hard pressed to finance its fighting forces, adopted measures to discourage demands for gold, thereby abandoning the gold standard in everything but name; meanwhile, the value of a pound in dollars sank from $4.86 to a 1920 low of $3.20. In an effort to recoup its lost glory, Britain resumed a full gold standard in 1925, tying the pound to gold at a rate that restored its old $4.86 relation to the dollar. The cost of this gallant overvaluation, however, was chronic depression at home, not to mention the political eclipse for some fifteen years of the Chancellor of the Exchequer who ordered it, Winston Churchill.