TRUTH OF THE STOCK TAPE by William D. Gann

Lambert Gann Publishing 1996.Originally published in 1923. ISBN 0-93909312 X

To quote;

"In the United States a stupendous sum, reaching into millions of dollars, is wasted annually in foolish speculations and unwise investments. This senseless waste can be traced to one and only one source, namely lack of knowledge. Men and women who would not try to treat the slightest ailment, or even adjust so common a thing as a kitchen faucet, but would hand each difficulty over to its respective specialist, the doctor or the plumber, will on the spur of the moment and without the slightest preparation, undertake the investment of thousands of dollars in enterprises about which they understand absolutely nothing. Is it a wonder that they lose?"

It's a bit late now ( March 1997) but if the participating fund managers and investors in the worlds greatest stock market boom have time to read a book about what they are doing then this is probably it.

Other writers like Darvas in How I Made $2.000.000 In The Stock Market or Lefevre in Reminiscences of a Stock Operator cover the same ground in a more entertaining way but for thorough analysis and observation Gann is unbeatable. He dismantles market action piece by piece examining each part as he goes, putting a spotlight on the human illogicality that the market exploits.

After the first few chapters the reader can safely abandon the idea that most people act rationally and in this respect the book is almost a textbook study of the real non-rational world. Why don't economists read books like this? (top)
 Well, Ganns answer might be that they haven't taken a close enough look at their subject.

In 1930 Gann wrote a sequel to the book entitled Wall Street Selector where he analysed the before and after of optimism/pessimism stock market cycles which is particularly interesting for the analysis of the summer 1929 feeling that is paralleled today.
To quote his observations;

"People had ceased to work and were watching the stock ticker"

"The largest number of new securities were floated in 1929 of any year in the history of the New York Stock Exchange"

"When everybody had bought to capacity and started to sell, there was no one else who wanted to buy and collapse was inevitable."

He left no stone unturned and explored biblical and astrological meaning aswell. This may have been his very analytical mind working overtime but he did distribute his results privately and some of it surfaces in his strange novel The Tunnel Through The Air ( a war that follows the precept "Thou shalt not kill"). Also The Magic Word, a book aiming to "..show others the way to use and obey God's divine law and thus bring out their latent talents and their God given powers, for that is the only way they can realise health, happiness and prosperity."

The idea was that it would be a small portable book available to millions but 47 years later no one has heard of it. Nevertheless it's a good guide to Ganns psychology.

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