50 Years in Wall Street - Henry Clews

[Guest JoelS]

[amazonsearch]50 Years in Wall Street[/amazonsearch]

 

I enjoyed this recollection by Henry Clews, of his 50 years in Wall Street from 1856-1906. It is a personal recounting of the things he saw and his views on success and failure in the markets. Clews was the Bob Rubin of his time and was known as the "sage of Wall Street". He details the operations of heavyweights like Jay Gould, WH Vanderbilt, John Rockefeller, Daniel Drew and others. He goes into some detail of the panics of 1817, 1837, 1857, 1873, 1884, 1893, 1905 and 1907. He discusses corners in the market by renowned operators, and what caused the panics and booms over the 50 yr period. He talks about his role in the Civil War.

 

Some of the reviews on Amazon were not favourable, apparently because the publishers cut the original version down by 2/3rds. This didn't bother me since I haven't read the original. The writing style is not always easy but it's not hard either and some of the gems throughout the book, in my opinion, more than make up for the shortfalls. I think it was very good from a factual and social sciences perspective. The foreword to this version is given by Victor Neiderhoffen.

 

Here were some highlights for me:

 

"While it is often easy to make money, it is still easier to lose it. Therefore, boldness should always be tempered with caution in the pursuit of the almighty dollar in Wall Street"

 

From the Jay Gould chapter:

 

Quote from Gould: "All my life I have been dealing in railroads.. And I have always considered their future and not their past. That is the way I have made my money.. The very first railroad I ever bought had a deplorable past, but it's future was fair. I paid 10c on the dollar for its bonds and finally sold the stock at par $1.25. It was the future of the Union Pacific that drew me into it. I went into it to make money.

 

Gould: "you pay more for rubies than for diamonds and more for diamonds than for glass"

 

On Henry Smith (a stock market operator, and a bull turned bear):

 

"It is almost impossible for a man who has had no experience in Wall Street matters to estimate the extremes of fanaticism in speculation to which a man is prepared to go when he is seized with a monomania either on the bull or the bear side - but especially the latter. This inveterate combination of egotism and fanaticism has ruined many hundreds to my knowledge - Henry Clews ( perhaps a warning to the ardent bears of today's markets? )

 

I learned from this book that while things change, they stay the same. I also learnt that if I want to go from zero to rich and back to zero, then I should speculate. If I instead want to go from zero to rich, then I should invest. Many of the great speculators of the day ended up broke, but the investors (Gould, Vanderbilt, Russell Sage ) died rich.