Reprint from The Ticker and Investment Digest
(Now known as The Wall Street Journal) Vol.S DECEMBER 1909 No.2
An Operator Whose Science and Ability Place Him in the Front Rank- His Remarkable Predictions and Trading Record.
Sometime ago the attention of this magazine was attracted by certain long pull stock market predictions which were being made by William D. Gann. In a large number of cases Mr.Gann gave us in advance the exact points at which certain stocks and commodities would sell, together with prices close to the then prevailing figures which would not be touched.
For instance, when New York Central was 131 he predicted that it would sell at 145 before 129.
So repeatedly did his figures prove to be accurate, and so different did his work appear from that of any expert whose methods we had examined,that we set about to investigate Mr.Gann and his way or figuring out these predictions, as well as the particular use which he was making or them in the market.
The results of this investigation are remarkable in many ways.
It appears to be a fact that Mr. Ga.on has developed an entirely new idea as to the principles governin g stock market movements. He bases his operations upon certain natural laws which though existing since the world began, have only in recent years been subjected to the will of man, and added to the list of so-called discoveries.
We have asked Mr. Gann for an outline or his work, and have secured some remarkable evidence as to the results obtained therefrom.We submit this in full recognition of the fact that in Wall Street, a man with a new idea, au idea which violates the traditions and encourages a scientific view of tbe proposition is not usually welcomed by the majority, for the reason that he stimulates thought and research. These activities said majority abhors.
Mr. Gann’s description of his experience and methods is given herewith.It should be read with a recognition of the established fact that Mr.Gann ‘s predictions have proved correct in a large majority of Instances.
“For the past ten years I have devoted my entire time and attention to the speculae the markets.”
Like many others, I lost thousands or dollars and experienced the usual ups and downs Incidental to the novice who enters the market without preparatory knowledge or the subject.
“I soon began to realize that all successful men,whether lawyers,doctors, or scientists, devoted years of time to the study and Investigation of their particular pursuit or profession before attempting to make any money out or it.
“Being in the brokerage business myself and handllng large accounts,I had opportunities seldom afforded the ordinary man for studying the cause of success and failure in the speculations or others. I found that over ninety per cent of t:he traders who go in to the market without knowledge or study usually lose in the end.”
“I soon began to note the periodical recurrence or the rise and fall in stocks and commodities. This led me to conclude that natural law was the basis of market movements. I then decided to devote ten years of my life to the study of natural law as applicable to the speculative markets and to devote my best energies toward making speculation a profitable profession. After exhaustive researches and Investigations of the known sciences, I discovered that the Law of Vibration enabled me to accurately determine the exact points to which stocks or commodities should rise and fall within a given time. The working out of this Law determines the cause and predicts the effect long before the Street is aware of either.Most speculators can testify to the fact that it is looking at the effect and ignoring th e cause that bas produced their losses.
“It is impossible here to give an adequate idea of the Law of Vibration as I apply to the markets, however,the layman may be able to grasp some of the principles when I state the Law of Vibration is the fundamental law upon which wireless telegraphy, wireless telephone and phonographs are based. Without the existence or Itis law the above inventions would have been impossible.”
“In order to test out the efficiency-of my idea I have not only put in years of labor in the regular way, but I spent nine months working night and day in the Astor Library of New York and in the British Museum of London, going over the records of stock transactions as far back as 1820. I have incidentally examined the manipulations of ,Jay Gould,Daniel Drew,Commodore Vanderbilt, and all the other Important Wall Street manipulators from past time to the present day.I have examined every quotation of Union Pacific prior lo and from the time of E.R. Harriman’s securing control,and can say that of all the manipulations in t:he history of Wall Street, Mr. Harriman’s was the most masterly.The figures show that,whether unconsciously or not, Mr. Harriman worked strictly in accordance to the natural law.”
“In going over the history of markets and the great mass of related statistics, it soon becomes apparent that certain laws govern the changes and variations in the value or stocks and there exists a periodic or cyclic law,which is at the back or all these movements. Observation has shown that there arc regular periods of intense activity on the Exchange followed by periods of lnactjvity. Mr. Henry Hall,in his recent book devoted much space to ‘Cycles of Prosperity and Depression’ which he found recurring at regular intervals of time. The law which I have applied will not only give these long cycles or swings,but the daily and even hourly movements of stocks. By knowing the exact vibration of each individual stock I am able to determine at what point each will receive support and at what point the greatest resistance is to be meet.”
Those in close touch with the market have noticed the phenomena of ebb and flow, or rise and fall in the value of stocks. At certain times a stock will become practically stationary or inactive with a very small volume of sales. I have found that the Law of Vibration governs and controls these conditions. l have also found that certain phases of this law governs the rise in a stock and an entirely differnt rule operates on the decline.
“While Union Pacific. and other railroad stocks which made their high prices i.n August were declining, United States Steel common was steadily advancing. The Law of Vibration was at work, sending a particular stock on the upward trend, whilst others were tren ding downward.”
“l have found that in the stock itself exists its harmonic or inharmonic relationship to the driving power or force behind ii. The secret of all its activity is therefore apparent. By my method I can determine the vibration of each stock and by also taking certain time values in to consideration I can In the majority of cases tell exactly what the stock will do under given conditions.”
To be Continued