Well-Authenticated Hoodoos

"Like all well-authenticated hoodoos this has its reason for

being. What does a man do when he sets out to make the stock

market pay for a sudden need? Why, he merely hopes. He gambles.

He therefore runs much greater risks than he would if he were

speculating intelligently, in accordance with opinions or

beliefs logically arrived at after a dispassionate study of

underlying conditions. To begin with, he is after an immediate

profit. He cannot afford to wait. The market must be nice to him

at once if at all. He flatters himself that he is not asking

more than to place an even-money bet. Because he is prepared to

run quick -- say, stop his loss at two points when all he hopes

to make is two points -- he hugs the fallacy that he is merely

taking a fifty-fifty chance. Why, I've known men to lose

thousands of dollars on such trades, particularly on purchases

made at the height of a bull market just before a moderate

reaction. It certainly is no way to trade."

-Reminiscences