Feb

21

During the old days of pools and syndicates in bull and bear stocks, one key element in the pool, when distribution was at its climactic moment, was to dispatch lieutenants into the field to fan the flames of impending dividend increases, acquisitions, and favorable changes in trolley legislation, et al. This was done so that the head of the pool could unload her stock.

I am reading a great account of that now in Ticker Magazine, Vol. 2, 1908. It's so representative of what we see so often today:

"Floor lieutenants are called up and given instructions before the opening of the day on which the climax is to be reached. They are to bid the stock up at every opportunity but to take no more than is compulsory in order to sustain the market.

Naturally these gentlemen begin to bubble bullishly. Bulletins are prepared showing the effect of the new departure. They are held ready to "spring" at the proper moment. Prominent officials of the company, financiers, and others are interviewed. All give very bullish opinions (or in the case of certain lieutenants throughout last year, bearish ones, about the impending doom).

Predictions are freely made that it will eventually sell (at the key level of) from 50 to 60 as a result of these developments, all of which are served up with brass band accompaniment. The stock is kept strong for some days or weeks depending upon the quantity of such to be unloaded, and the power of absorption displayed by the public, after which the lieutenants retire to their perches on the steps of Trinity Church and wait for the next member to come along."


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