Tidal Swings Of The Stock Market First published in 1918 and recognized in its day as “The Magazine of Wall Street,” Tidal Swings Of The Stock Market defines what is now popularly known as the occurrence of stock market fluctuations. Tidal Swings Of The Stock Market incorporates detailed explanations about the characteristic differences between Bull and Bear markets combined with practical suggestions on what helps investors understand the logic of market fluctuations.
Introduction (From Author):
I DO not know whether the term “tidal swings” has been used before in connection with stock market fluctuations, and that does not especially matter. I use it because it expresses fairly well an idea which can, I believe, be more fully and clearly explained than has been done heretofore. As everybody knows-and many of us have had the fact forced home to us at times by rather painful experiences-stock prices are constantly changing, and even bond prices, supposed to be more stable, pass through certain long cycles of change extending over several years or even a decade.
For example, an average of ten high-grade bonds sold at 100 in 1902, at 100 in 1903, at 107 in 1905, at 88 in 1907, at 103 in 1909, and near 79 in 1918 to date. In the thirteen years from 1905 to 1918, the value of the average highgrade bond, $1,000 par, fell approximately $300. Such bonds represent the greatest possible safety for an investment, outside the bonds of the United States Government and our principal municipalities.
They are found in the strong boxes of the most conservative investors, trust estates, and savings banks. When we see that they fell an amount equal to 30 per cent. of their par value in thirteen years, it is useless to pretend that the investor can afford to neglect the fluctuations of prices. It is a subject of vital interest to everybody, and most of all, in many cases, to those who pay least attention to it and imagine themselves to be almost unaffected by it.
Naturally, the price,s of stocks have wider changes than those of bonds-since a bond represents a definite amount of money to be paid at maturity, while a share of stock represents merely a certain fraction of participation in the profits of a company after the bond interest has been paid. The profits of nearly all companies vary greatly from year to year and the prices of these companies’ stocks naturally vary with their profits, in addition to being subject to many other influences. These fluctuations in the prices of stocks may be roughly classified as follows :
- (1) Small changes due to the variations of ‘demand and supply from hour to hour. These are for the most part dependent on the views of those persons who happen to be buying or selling any stock at the time.
- (2) Price movements lasting from one to several days, due in part to the news which comes out during the period, or to the speculative condition of the market, or to the operations of big traders or investors.
- (3) The “minor swings,” which may last anywhere from a week to a month or even several months. By this term is meant general movements
of the market for many stocks together. Some of these stocks will move widely, some only a little, with an. degrees between. Other stocks may at the same time remain almost motionless and some may even be moving counter to the general market. - (4) The “tidal swings,” lasting from one to five years, and carrying the market as a whole over a wide range of price changes.
Contents:
- What Is Meant by Tidal Swings
- How Prices Are Made
- Relation Between Money and Stocks
- Relation Between Bonds and Stocks
- Relation Between the Market and Business Conditions
- Influence of Psychology on the Broad Movements of Prices
- Price Movements in Bull and Bear Markets.
- What the Volume of Transactions Shows
- The Selections of Securities
- Following the Trend
- Some Prartical Suggestions