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The Diary of a young 1929 Trader

by Joseph Granville, editor,
The Granville Market Letter

I have in my library a two-volume edition of The Inman Diary, by Arthur Inman, who had lived from 1895 to 1963. It was published in 1985 by the Harvard University Press. Since he was 34 years old at the time of the 1929 crash, Inman's diary entries that year were not only fascinating insights, but typical of a stock trader who wanted to be a millionaire in a hurry and what happened in a very brief period of time. perhaps my quoting him now will help some young trader with similar get-rich-quick ambitions before he loses everything in the current crashing market:
October 4th: What a day yesterday. Market broke precipitately. Lost thirteen thousand, the largest drop since the eighteen thousand drop. Down to between twelve and twenty-seven thousand. Been selling all morning. Sold short on several things to see if that would rally the Market. Am afraid of a panic. If I fear, others must fear. Ergo: I sell. If Market rallies, I shall sell more. I should reduce my holdings to not over a hundred thousand. If I had not been such a glutton, I should not have taken such a licking. Never mind, I am learning.
October 19th: Yesterday the Market died again. Today it is dying ever more precipitately. I have wholesale orders in to sell. The profit in my little book melted yesterday to seven thousand. It is probably nil today. I hope I can withdraw from the wreckage with some twenty thousand intact. My dreams of a millionwhere are they? Well, philosophically speaking, I've had a bouncing time out of it all and learned a great deal which may prove useful in the future. No use to weepif only I can retire with the remnants. "O stock Market, God of American gamblers, be merciful to me, a petty and insignificant worshipper at your shrine! If I have been greedy, forgive me! Leave me my remnants, O Stock Market!
October 24th: What a day yesterday! Lost nine thousand! One of the worst drops in history. Slept only four hours last night. Put in orders to sell practically everything this morning. Opened a little better than last evening. I see no end in sight. I certainly have learned a `Bear' lesson. Every lesson, I repeat to myself with a sad smile, must be paid for. Just sent Mother and Father each a telegram letting them know I am out of the Market. I can hear Father's fervent. "Thank Goodness!"
October 30th: Yesterday was the wildest panic in history. Stocks sold at anything they would bring. The list is full of fantastic bargains. If I had sold out last July and could buy in now, as Father told me to do, I would make my million in short order. As it is, all I have to work with is two thousand. Well, glad I have that. My head is clear, and I should be able to pull something out of the wreckage. And I believe I have learned a lesson. Never forget, a panic is something occurring approximately every seven years. Sell out when call money rises over 10%; it is a danger signal. In the end, stocks return to eight times their earning level. You just wait until seven years from now. I bet I make my fortune. Believe me, this has been a wonderful lesson. It is my credo that progress is built upon such lessons, that one should rather exult over them than bemoan them. And if I am a man, I should find my way out and up. Mr. Flood looks at me and shakes his head: "I shouldda thought you'd be all in and out. I don't for the life a' me see how you take it like you do. You got courage."
November 12th: Am surpassingly weary today. The Stock Market continues to sag without end. Have orders in to sell everything. Figure will have about five hundred, if I am lucky, left. A humble ending to a potential profit not four months ago of nearly a hundred thousand.
Last night and this morning, I have been centering my mind on economics. Few books, less travel for Evelyn, fewer readers, not so many visits from doctors if possible, fewer extravagances, food purchased at good but cheaper storessuch must be the order of the day. It costs me in the vicinity of sixteen thousand a year to exist. Father gives me twelve thousand a year. I was getting around twenty-five hundred a year income from other stocks. Now I receive only fifteen hundred. That leaves about twenty-five hundred to come from nowhere.
At least, I say to myself, I lost all in the greatest panic in history.
So that's the way it was, a trader consumed with greed in July and wiped out in November. Is it to be any different now?
:) Falkor

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