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7/25/2019 Gold Nuggets for Stock & Commodity Traders - G.bayer
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GOLD NUGGETS
f o r
STOCK ND
COMMODITY
TR DERS
by
GEORGE B YER
I i HOUSE\\ I I ;E goes
lo
the
s to re t o l ~ u y ai-ious kind
of n e c e s s i t i e s su ch as
me al s, silgal-, bread. In
otliei- typ es of s tor es she will
b u y
otlier Itinds
of
necessities such as
clothes and shoes.
T h e \~ e n d e r s
of
tliese goods on
t h e otller
h nd
have to p~ l rchase
them from wholesalers i n a
w a y to
talte car-e of th e demands ant1
wishes of the con~ mu ni t yn which
th ?y o p e ra t e . F a r ~ n c r s n the sta te
of Maine probably have dif ferent
tastes than those of Texas : thus
niany ai.ticles i n great demand in
one
Texas s to re ,
f o r
example ,
shoulii pi-crve to
I
shelf-warmers
n
Vermont or Maine stores.
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The wholesalers, from whom
nierchants b u y their goods fo r local
distribution, a lso have to bu y them
from large factories
or
f rom big
mi l l s , s l a ~ ~ gh t e rouses or flour
mills, shoe factories
01
arger grow-
ers. T h e actual raw products such
3s gl-ains, raw cotton, raw hides,
etc., are usually first assembled
through growers selling them by
way
of
an Exchange, called the
Market. Ttiese markets are located
in major cities. Througli their
as-
sistance sellers and buyers are
brcught together to effect national
I-e-distribut~on. n the very same
way Stock Exchanges operate, only
i n this case it is a cluestion of hand-
ling corporate values.
I r
is
l
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have been lost. Either the modern
grew du mbe r by the h our or- else
they just simply shy a way fr-om the
truth, not even wanting to ltnow
of i t
Th er e ar-e certai n ty pes of people
who a t tempt to prof i t
by
tliose
price changes. The y at ternpt t o buy
when prices seem low to them and
sell wlien :hey had th eir rise. Such
things a re easier said than done,
any on e but tile most inexperienced
trader knows that . Some secret
must be i~-ivolvetl n those o pera-
tions which none
of
the scientists
have been able t o re-discover. Thu s,
they leave i t go at that and mess
arou nd wit11 crud e instru ments, tlle
same \vay as the aborigins fash-
ioned Irn d:iy to iia y anti ntte rnpl to
make deductions about what the
next price tick should be, whether
LIP or down. Some dare even to
prognosticate long term trends of
tile price chan ges with mor e o r less
success, depending on how good
their instruments are that should
show such things. The more we
clelve into the secrets as to tile
cause
of
such movements, the more
we must admit , they are just invis-
ible and incon~prehensible o. us,
because e cono ~nis ts nd forecasters
tr y to use visible factors which con-
sist of cl-op outlook reports, statis-
tics, rainfalls, i n case of cornmodi-
ties. I n the case o stocks they
use
ear-ning statemen ts of corporations,
the number of blast furnaces in op-
eration throughout th e countr y, the
dividends paid
by
corporations, eic.
Each and ever-y such supposed in-
clicatos is b sed upon the immecli-
ate presence, t he- clo ser to it, the
t ~ e t t e r .Tliey should tell t h em the
future pr-ice levels R u t checlting
their rriiahility with tile I-esultsob-
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tained from such deductions, we
find niucli to be desired.
W h a t
I am
explaining in this
short
Man ual should be just a
1'4ltian-well , tr yi ng
to
lead you
over to something niuch rnor~ede-
si rable and usef~i l . i le way is hard,
f ~ i l l f th orn s ancl sticlters, but wh at
rose is not
witliour tliol-ns? Tlie lit-
tle apliis tha t climbs arouild the
rose b u s h often linies will race out
tcwal-ds t h e end of a thor-n but has
to ret i -act i ts s teps , t rying to f ind
the x v y up, that leads to\.vards tlie
real juice
of
the rose bush.
Some of the coi i i l~arisons tha t
11ad
lo
be introducecl for be~ter
111
t iers tanding are somewhat rough,
some of them m ay seern to hurt
sciences of various ltiiitls and tl~eir
stiit i?nls. Howeve r, wllen tlie tru th
is involved only we don't have t o
worry . doctor who tells this pati-
ciils f r;inltly that his t~iinor
m u s t
be cut ou t, will 11i1l-t his patient.
\\ ,l lo ilon' t \~ 1 ;1 n t o be cut,
b u t
is it
no
t i
i s lolid?
Now let us go over into the big
fieid and see wh at c an be handily
seen without u psetting th e apple-
Call too
I l l l 1 ~ l l
\Vherever
we
loolc in th e econoni-
ic cycles, be I T in inclustries or in
mel-cliantlising, in real e sta te or in
stoilc anti cornmoclities mai-ke ts, we
finci ~ i l t r eriods
of
t ime we
have clefiniie trencls that lead from
: low level to a hi gh level ant1 hac k
to tlie low level again. On top we
have the saturatioii point while on
the ho t~ on l e have the desparat ion
point. C n eitller side we f i n d there-
~ t o ~ eha t we shall call an ex-
t i x~ n e . ~ i s t ike one sa lami is con-
nected with a nothe r, only separated
b y
a stri ng, so tlie cycles of prospe r-
ity a nd depl-essions iollow by i m -
mutable precision one to ihe other.
A t periotis of high prosperity
i
never has failed iliat tlie news tells
11so new era , while ; i t tlie bot-
tom o cIcsj)rl-ation everyone sees
tire illiisory big
byss
I-iglrt ~ r I-ont.
I n h : l i i i l e ive can irc;rti
i h a t
ever1
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in those times they were not im-
mune of famines and of periods of
great prosperity in form of herds
and tents. I-low can we expect
somethi ng different froin this old
wcr~ld?Tlies e Aricients liad ntigllty
roitgh trea tme nts theri, are we an y
be t ter no w?
I n order
t
discover the low era
of prices i n cotiimodities or sloclts,
we have not f ar to go to recognize
tha t . I t is a t a time when stocks
sell for one eighth , not one or two,
hilt l~i lnd reds f theni . T he bet ter
situated stoclts of lar-ger coinpaiiies
whcse "outlooli" is very bright,
[nay a t such tirrles sell for three ,
foul-
01
ive dollars, those who did
parac'e between
100
a n d
200
not
many years befor-e. Flowever, why
we, the public do not buy them
tilere, is caused fit-st of all by Inclc
of ready casli. If cash
i
available
or on hanil, tiieii we are all afraid
i~
[ni ght still go lower than :lie
eighth, to notlritig.
u t
sucli is not
ca r t .
since w e milst irecognize
once and for all the idea that a
stock is just like
a
perennial plant
(flowe r) which is different froin an
arinual plant. Th e latter grows but
once
anc l
dies out completely, re-
quiring a riew seeding to g~- ow
new crop. But, wit11 perennials, we
Iiave a death of the complete plant,
except of tile root system which is
undergr-ound. And ~niild ou, such
cleatlis r perennials back to the
rooL sysleni occul-s not only on ac-
colrnt of frost s as it hap pens in the
East or- ~ni d-W est , ut those deaths
also occur w i t h those perennials
out West in California, where we
are supposed t o h a v e e t e r n a l
Spr ing. In case f r o s t s do occur
ther:, th ey al e of sliol-t duration
ancl clo not cause any deep freezes.
Consequently, heat or cold are not
the clriving force that brings cleath
to the pel-ennials Apply the same
itlea t o stoclts and co m~no diti es.
This tliouglit alone,
i f
properly
~~ntlers toocl, ust 1~lalieyou buy
wlirn 1,uncIi of s t o c l ~ell at 1/8
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Thel-e will be a tim e when we shall
see the stocks at such levels again.
By all means we must discard the
idea of new el-as of th e half-wit s.
N c w the period o f satul-at ion
i e. th e lo p levels in sroclts as well
as in commodities are not any too
Iharcl to find either, when we rnalte
pt-oper comparisons of other kinds
of l i \~es.A n outg rown tr ee can live
for a long whilt,
bul
it surely can-
not get any taller.
The same with
an outgrown man.
A
violet will
never be taller than a few inches.
A ired hot poker will nevet- be taller
than t wo feet at the mosr. Those of
2 1/2 feet ar e us ef~ ll for flower
siiows. Th us, each slack has a cer-
tain extreme height , which, when
I-eached 01- even appt-oached is a
s a f e place to cash in on and let th e
olliet-s have t he e xtr a gr avy, in case
there should be sorne. If you c a n
carry a stock frorn one eighth t o
one hundred or even only up to
f i l l y , i c i w milch profit is
lier re
in
I
C I COLII-se,am n o t sl~ealting o
hogs who are
never
satisfied with
anything and never will be Jus t for
curiosity's salte go to some library
and see that back in 1932 you could
have bought half th e stocks listed
on the exchange for one eighth
each, the same as in 1921 or 1907
01 1893 More abo ut recognizing
tops will be said furt he r on, when
I
explain about th e perfume thrown
out
of
the flowers t o a t t ract the
bees, even the bumble bees.
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PART
One of th e gravest errors of busi-
ness people, of trade rs in stoclts or
con~modit ies, s the p rel~al ent dea
that an y old tim e is good enougli to
begin something, be it a business,
a
profession, or t rading, e tc . They
are of the opinion Chat as long as
they are I-eady to sta i-t , Natur e of
necessirv n-iust also be ~.eatl y o fol-
low their i wn instinct.
Nothing could be niore erroneous
t h a n t l ia t . When things go their
way the y are of ti lt opinion tliat it
u as thri r intelligence and gilts that
macle e\/erytl-iing go Iiu~il{y-do ry;
\ vI~ en l ~ i r~ g so awl-y, the y ascl-ibe
it to anything but to then~se lves :
to the weat her , the neigIi11o1-,com-
petition, pool- visibility, anything
that sountls plausible to ta ke care
of th eir h aughtin ess, ignol-ance or
other sI?or-tcomings.
I n
the very saiile way many a
prc~ ress ional har-iciles his clients.
T h ey reiiiiiitl nie very mucii of the
so-called market ietter writers
or
siinilar writers w ho hav e the ability
to appear a s if they were the only
ones upon whom the welfare of
evel-ything rests. Th ey can be as
wrong as possible, yet, the way they
write things away o r the way they
give their clien ts lozenges and pills,
plastel-s and smears, whether they
clo them a ny good or i~ot-the doc-
unientary papel-s s ay : they know
about i t If th e account get s weak-
er ancl weaker , what s the differ-
ence; there al-e plen ty of o t he r s . .
They all say: there is only one
salvation. But wIlicl1 is i t? Wh o
finds it without being first stung
by
th at fa mo us viper of tile Bible
and dies a prematul-e death him-
selT?
Itnow
of
on e of th e cleverest of
niarltrt letter writers w ho operates
for years on the same principle as
follows:
H i s
yearly earnings, as
sonleone informecl me tile other
clay, is 3 liousaiiti clollars plus. I-le
om e
i - e g~ ~ l a r l yo a certa in br-olter.
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What do you think the marl te t
will do ? he asks of the customers'
man who is merely an instrument
to fill orders. Then he consults a
certa in fun ny stri p of t he news-
paper t o see what the picture rep-
resents. If the picture shows a sor-
did face, he writes in his nest mar-
Iter analysis: the niarltet will de-
cline and builds a story around it.
Sihould the .fellow, whoever maltes
the picture, put a laughing face on
or even a Sun shine, besides, lie is
sure to write: niarltet ivi l l ~ na l t e
ga p up and will go very, vel-y fa r
u p , ecc.
B I I ~
e won'z ritlicule just one
of
those specialists; let us show
sornething a bou t the othel-s, here
ancl ihel- e. Some use trencl lines of
char t s . f the price crosses upwar ds,
they become bullish,
i f
it drops be-
low such a line, they get bearish.
Usually, Nature makes prices just
cross f ar enough L O lnalte them get
haywire . Of cour-se, ther e al-e rimes,
\vhen even tlhe d~ im be st rad er will
hit it right for once. Immediately
they
pu t
on their heacis a wr eat h of
ivy or rhododenrlron leaves. Man's
fancy goes a long way into all sorts
of bizarre ideas as to what it is that
moves the brains of the public to
want stocks or grains
or
not t o want
them. Many of them go fo r astl-ol-
o g ~nd break their brains t o malte
planets run around the Zodiac for
better or for worse just because the
Ancients have spolten about it so
much. I-lowever, they do not even
thinlc that those .4ncients were not
c l~~i i ibells .ivlio carefiilly omitted
the most important phases, upon
wliicl~ everyt hing is b ased. When
one has studied carefully some
50
or 60 texl s on as trolo gy of all
pei-iods, he g ra di~ all y ets th e idea
that something vt.1-y impel-tant is
missing. What it is can only be
gathered through stu dy of texts
which on t he silr-face have n ot t he
sliglitest llling to
lo
will1 markets
nor- with astrology ilor with anp-
thing tangible. Of su c l ~ ual i ty a re
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old I'oetry, stra nge Prose work s,
Fables, Fairy Tales, and rela ted
worlts. Th e stu dy of such boolts
gives one ideas, strange feelings of
~vlr at t is a ll about , and only years
of deep study, and fol lowing out
all tlie various performances con-
tained in those stories, will gradual-
ly lead one to a path t hat is not
troclden by tlie public at all. They
do not \vant to g o sucl i ways.
t som e oth er place spealc of
letter-shifting in \vords, with out
which nothing wliatevel- can be
ac
cornplishecl in the way of foi-ecast-
ing any thin g. \L1e just take the two
words above and show what mean
by shift ing le t ters:
F a l ~ l e swe must cal l Tables;
Fail-.y -1'aIes we must call "Very
Tales" 1.e II-ue.
f
we call tables
or
fab es tlevils, we ai-e not far wl-ong
e i t l~e r .
o~ . t lc~-o explain the si tuat ion
cleal-er-, et us talte any
of
tlie Fables
of Aesop or of 1.a Fo nt ai ne. Usual-
ly
tiicy
ate anirnal stories. \Ve have
to put
a
lot of imagination to use
and express everything that is said
and done in the story into move-
ments of lines in a chart just the
way stocits o r grains produce when
we plot their price movements on
chart paper. Som e of the excited
actions, such as xvhen the great big
wolf does some naug hty work,
would be shown in our own produc-
tion as a big strong upmove in
stoclts or grains, that takes all the
little traders by surprise, who are
silting and waiting in the brolter's
offices for a reaction. Uefor-e they
realize what that wolf is
u p
to, lie
has eaten everything up (prices
went sudtlenly sky-Iligli). Before
the trader s have a chance to even
thiiilt, it's all ovel-.
In
lliat way ail
the various fables can be worked
tlirough w hich get s us t o realize
that the old Greek Aesop wasn't so
dunih after a ll and what w e so fa r
col~s ide~-eds chi ldrens s tor ies ,
have quite a ciiffel-ent meaning
a n d wi l l p rove va l ua b l e, whe n
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p l o t t e d o u t i n f o r m o f l i n e s a n d a p -
p l i ed t o n i a r l ie t s
T h e n a m e d e v i l i s h e re n o t t o b e
unc l e rs t ood i n an ev i l wa y , b u t i n
a w a y w h i c h m a k e s t h e a c t o r s i n
t h e f a b l e a l w a y s d o t h i n g s w h i ch
n o r m a l l y a r e n o t e x p e c t e d .
I -le re a r e s o m e s e c r e t s a b o u t s h o r t
s w i ng t r a d i n g b y u s i n g n u m b e r s a n d
s h i f t i n g l e t te r s a c c o r d i n g l y . B u t , i t
i s ne c e ss a ry t h a t w e u se t h e G e r m a n
l a n g u ag e w h e n o p e r a t i n g a n d n o t
E ng li sl l w o r ds . I t s h o u l d b e
c o m p a r a t i v e l y e a s y f ol - y o u t o g e t
a G e r m a n g r a m m a r a n d a l s o le a rn
t h e n u m b e r s f l- o m t o 1 0 0 t h e w a y
t h e y a r e p r o n o u n c e d . M i n d y o u , i t
i s r - i i os t l y t he r i gh t p ronounc i a t i on
t h a t g i v e s t h e c u e t o w h a t i s g o i ng
t o h a p p e n . F u r e x a m p l e , w e m u s t
l tn o w t h a t t h e e n d i n g s o f t h e t e n
u n i t s , s u c h a s 20
30, 40,
50, e t c . ,
w h i c h w e a l w a y s p r o n o u n c e a s - y
a s t w e n t - y , t h i r t - y , m e a n i n G e r -
m a n
z ig .
T h u s z w a n z i g , i lr e is s ig ,
viel -z ig, e tc . No w co me s t i re secl -el :
t h i s e n d i n g z ig m e a n s i n t h e c o v -
ered Ial igu age s ic l ; . old Ger-
m a n i t w a s s i e c h , i . e , n o t w e ll .
F o r a s t o c k w h i c h s e ll s a t 37, w e
w o u ld m a k e t h e d e d u c t io n a s :
s i eben un d t l r- e i j si g . No w, i n o rde r
t o a r r i v e a t o u r f i n a l p a r t , w e al s o
m u s t m a k e a s h i f t i n t h e w o r d
s ie b en a n d t u r n i t i n t o s ie d en
w h i c h in G e r m a n m e a n s t o b oi l.
T h u s w e h a v e t h e s o l u ti o n , pr o v id -
ed w e c h a n g e t h e m e a n i n g of drei
i n t o o ul- E n g l is h t o try. Sieben
u ii d d r e i ss i g l i i e a n s t h u s : S u p p o s -
in g a s t o ~ l i e l ls a t 37 , t l i en we can,
p r o v i d e d
i t
boi l s t he r e , expec t
3
m o r e
&
t r y t h e n t h e s ic lt s i d e.
W h a t we ur iclers tani l as boi l
i n
n ~ a r - l t e t e r m s ,
we
a ll k n o w : g r e a t
a c t i v i t y , w i t h o u t g e t t i n g a n y w h e r e .
Lxt LIS t a li e a n o t h e r e x a n i p l e :
4 7 ; 40
w o ~ ~ l de p r e s e n t w i t h s o m e i m a g i -
r ia t io n t h e w o r d w u e r z i g , o r s t r o n g ;
s t r o n g w h i c h m e a n s s p ic y . T h u s ,
i t c o n t a i n s t h e i d e a o f : i f i t a c t s
sp i cy
;111il
;it
t he s ; rn i e
l i ~ i i c
f
i t
boi l s , then at l i i 1 o th al Llie s i tu a-
t ion I)econ?es sicl t ly al
5
ancl
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s ickly has t l ~ eGerman meaning
,,
slch legen which means to lie
down. In case no spicy move
shows up or if it does not bail at
47,
then we h ave t o expect higher
automatically. The word fuenzig
50 ) the idea of nifty (winding i t-
self) , the word twenty contains
tlie idea of a swan wh o proud ly
sails thr ough th e poncl. 60 contains
t h e idea of sawing with a sa w set-
ting ;
thus,
61
would call for a set-
ting
a n
egg ( a gap up) and then a
sett ing itself, l'herefore, a stoclc
which inaltes sixty, and then a gap
up over
G I
which represents its egg,
is ready to sit down; i.e. close the
gap again.
T h e wor-cl two
z\vo
or zwei) I-e-
lates to the Ger man \voril Geweili
\vIiich are antl ers; thel-efore we
must expect double tops at
72
pro-
vided it maltes top; thus, a stop
\voi~Iti be rrequir-ed at 73, becaus e