On Pat Hearne - He made money in stocks, and that made people ask him for advice. He would never give any. If they asked him point-blank for his opinion about the wisdom of their commitments he used a favourite race-track maxim of his: “You can’t tell till you bet.” He traded in our office. He would buy one hundred shares of some active stock and when, or if, it went up 1 percent, he would buy another hundred. On another points advance, another hundred shares; and so on. He used to say that he wasn’t playing the game to make money for others and therefore would put in a stop-loss order one point below the price of his last purchase. When the price kept going up he simply moved up his stop with it. On a 1 percent reaction he was stopped out. He declared he did not see any sense in losing more than one point, whether it came out of his original margin or out of his paper profits.
“You know, a professional gambler is not looking for long shots, but for sure money. Of course, long shots are fine when they come in. In the stock market Pat wasn’t after tips or playing to catch twenty-points-a-week advances, but sure money in sufficient quantity to provide him with a good sense of living. Of all the thousands of outsiders I have run across in Wall Street, Pat Hearne was the only one who saw in stock speculation merely a game of chance like faro or roulette, but nevertheless had the sense to stick to a relatively sound betting method.
“After Pat Hearne’s death one of our customers who had always traded with Pat and used his system made over a hundred thousand dollars in Luckawana. Then he switched over to some other stock and because he had made a big stake he thought he need not stick to Pat’s way. When a reaction came, instead of cutting his losses he let them run – as though they were profits. Of course every cent went. When he finally quit he owed us several thousand dollars. Jesse Livermore
May The Force Be With You.
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