Trust

by Hernan Diaz

he viewed capital as an antiseptically living thing. It moves, eats, grows, breeds, falls ill, and may die. But it is clean.

filled with prancing businessmen, busy displaying how busy they were.

before 1928 few thought it possible that five million shares would ever be traded on the New York Stock Exchange in a day, after the second half of that year this ceiling almost became the floor.

Through his banks, for example, Rask borrowed cash from the New York Federal Reserve at five percent, only to then lend it in the call market for at least ten and even up to twenty percent.

Whenever he wanted to avoid the scrutiny of the New York Stock Exchange, he traded in San Francisco, Buffalo, or Boston.

If the volume of trades was large enough, the lag could be of over two hours, rendering the tape obsolete by the time it came out of the machine.

The developments of the market reached him only as “news,” which is how the press refers to decisions made by other people in the recent past.

Today’s gentleman is yesterday’s upstart.

But to be consistently successful an investor must follow rules. Adding science and the objective interpretation of great volumes of data to my intuition is the source of my advantage.

“Federal Open Market Committee.” Joke! We either have an “Open Market” or we have a “Federal Committee.” But we cannot have the former fenced in by the latter!

Adding science and the objective interpretation of great volumes of data to my intuition is the source of my edge.

Now, back to 1929 and the ensuing depression. People want a culprit and a villain. And there is, in fact, a culprit and a villain: the Federal Reserve Board.”