Daily Speculations

The Stock Market in Literature

I find it uplifting and educational to find sensible writings of great authors about the stock market. John Steinbeck, in "Of Men and Their Making," writes:

I remember '29 very well. We had it made. (I didn't, but most people did).

I remember the drugged and happy faces of people who built paper fortunes on stocks they couldn't possibly have paid for. "I made 10 grand
in 10 minutes today. Let's see, that's eighty thousand for the week."

In our little town (Salinas), bank presidents and track workers rushed to pay phones to call brokers. Everyone was a broker, more or less. At lunch hour, store clerks and stenographers munched sandwiches while they watched the stock boards and calculated their pyramiding fortunes. Their eyes had the look you see around the roulette tables."

Steinbeck, like Mark Twain, owned a business and writes sensibly about the lessons he learned from his marine bio-testing laboratory.

His essay about Ed Ricketts (his co-owner, is one of the most touching epitaphs I have read. Of course, the descriptive is not predictive. Steinbeck noted the same roulette looks in the eyes in writing about the '50s and '60s.

I used to try to quantify speculation with the ratio of volume on the American Stock Exchange to volume on the NYSE. When used in a multiple
regression along with the independent variable past price change, it was highly predictive of future price changes. I wonder what similar independent variable measuring speculation could be used to improve regression forecasts today. -- Vic