Stock Market Wisdom from 1898. It Will Blow Your Mind.

The more things change, the more they stay the same. Learn who has always been behind the most significant stock market movements in history.

The Amazing Hoyle

In 1898, William E. Forrest Hoyle published a book titled “The Game in Wall Street, and How to Play it Successfully.” This publication contains incredible stock market wisdom.

I figured it would be interesting to make a comparative analysis of trading in 1898 versus trading in 2022.

Technology-wise, there is a noticeable colossal difference between 1898 and 2022, but you will probably be surprised when it comes to trading psychology and the principles of trading success.

Solid Trading Advice

Hoyle makes an early point by saying, “anyone who goes into the business of trading without study or knowledge, and thinks that tips or gossip will help them, is almost sure to lose in the end.”

This advice is just as accurate in 2022 as it was in 1898. You must learn proper trading knowledge to achieve trading success. This learning process usually takes several years. There is no shortcut to winning in the long run.

The Stock Market Still Takes the Proper Skill and Principles

Hoyle stated in 1898 that it is not a game (stock market) of chance but skill. The game has well-defined principles and rules the public would do well to study. Trading today in 2022 is still a game of skill, with specific vital principles traders need to study for trading success. Cutting your losses short and letting your winners run is a good example.

The Big Players Who Control Most of the Stock Market

Hoyle stated the game (stock market) is directed by intelligent people who control millions of dollars and back pools (institutions) to move the market in their direction.

Today, similar cunning people, who now control hundreds of millions or more, back big institutions to control the game. These institutions include mutual funds, hedge funds, and pension funds.

The institutions are a significant force in the stock market, producing around 80% of its total volume. It is essential to understand this stock market wisdom.

Volume Provides a Major Clue

Hoyle made the following valid statement. “If you look down the column of “numbers of shares sold” in the daily report, you will pick out the stocks handled by these pools.”

The concept is the same in 2022, but the pools are now called institutions. These institutions will tell you if they support a particular stock with a heavier than average volume.

When you see daily volume much higher than usual, you know these big institutions are buying or selling shares and can move stocks significantly. Properly analyzing price and volume are keys to trading success.

The Stock Market Cycle Which Tricks Many Investors

Here is a truly remarkable statement from 1898. Hoyle states that “the pools direct and control the grand movements on the stock exchange. The bull campaign begins when prices are low, and the general public is bearish”.

All the news at such times seems to favor a decline. The information is manipulated in specific ways. The news will stay negative, but eventually, the prices do not go lower.

The bull campaign has already commenced. The pools are now accumulating their stocks and locking them up in their strong boxes.

The pools buy when times are bad and sell when everything seems good. It begins at the bottom and ends at the top. The pools or institutions have used this stock market wisdom for a long time.

Prices advance with normal corrections. Again an advance happens, and this time it goes a little further. The prices are going up and down but on the whole advancing.

The Institutions Sell at the Right Time

After several months or more of gradually advancing prices, the advance begins to be rapid and continuous; the bears are routed. At this point, prices are booming, and the public and even the bears are buying madly.

All the news and indications are favorable for a continued advance, the volume of transactions is heavy, and the bull campaign ends.

The pools are now selling, as the general public is going crazy buying and buying. Most of the general public lacks the essential stock market wisdom.

The Rich Become Richer

Ultimately, the average stock market participant loses big time, and the pools become more prosperous and begin to plan the next bull campaign, which starts the cycle over again.

Understanding this is a significant key to trading success and accumulating stock market wisdom.

The Same Stock Market Cycle Happens Over and Over

Now, to the late twentieth century. Let us take the Nasdaq, for example. The bull campaign began in 1997–1998. You get an unbelievable run-up of prices in 1999 and early 2000.

At this point, the “smart money” begins to sell as the general public goes wild to buy as much stock as possible.

Good times never end, as the media tells everyone to buy, buy, buy. You hear the most dangerous trading statement, “This time is different.”

It is never different because human nature never changes. From March 2000 to October 2002, the Nasdaq loses about 78% of its value.

Most of the general public lost enormous money, but not everybody lost. Mutual funds got beat up pretty badly because they are not flexible.

Then who are these big institutions making all this money during a primary bear market?

It is primarily certain hedge funds, and a few highly proficient individuals, because of their trend following methods. They shorted the bear market at just the right time.

Conclusion

The path to trading success has not changed much from 1898 to the current year of 2022. The successful principles of trading are about the same.

The “smart money,” the pools from 1898, and big institutions from current times, know exactly how to conduct a bull campaign for maximum profits.

Most of the general public ultimately lose a lot of money, whether in 1898 or the 21st century.

Proper knowledge and psychology were the keys to trading success back in 1898. It is still synonymous with success in 2022. Stock market wisdom can help you become highly successful.

Do your own research when trading or investing. Some ideas or statements here are my own. They do not represent trading or investment advice. Conduct your own due diligence. All actions taken are at your own risk. I accept no responsibility.

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