Finance has a language all its own, with unique phrases that go back a few centuries. A few good examples can be found in an 1875
sales pamphlet book from John Hickling & Co.
Readers got the total Wall Street experience — they snuck in a weekly newsletter and “improved” trading system sales pitch — while learning about the Men and Idioms of Wall Street (not much has changed).
Promotions aside, the idioms are spot on and still offer a few lessons. So I thought I’d share a few that stood out:
Speculation — The great feature of Wall Street, as in every important centre of commerce, is speculation. The love of gain is an inherent principle in human nature, to a large extent, the foundation of all enterprise. The desire to make money is the mainspring of speculation… The old maxim of “buying cheap, selling dear,” is the sine qua non of speculation.
Modus Operandi — There are certain principles underlying the successful application of stock operations, which, if understood, will guide the operator in taking advantage of the market… Never speculate beyond your means. There are many influences at work to tempt the operator to rush blindly into the stream of speculation, and go beyond his depth. The speculator who is not guided by the exercise of discretion and common sense should not complain if his indiscriminate investments terminate in disaster. Rumors and false reports are commonly resorted to, for the purpose of producing certain effects. The very circumstance calculated in your mind to produce a rise may have been announced for a contrary purpose. The news which you regard as fresh may have been known and acted upon hours previous to your entering the market, and a sudden break-down follow an upward movement, so that, while congratulating yourself on a sure thing, you may be actually left out in the cold.
A Break — in the market means there is a sudden fall in prices. The sudden news of national disaster — a Chicago fire; evidence of panic brought on by the failure of some prominent houses — will often precipitate a break in stocks. Wall Street is the barometer which indicates the changes in commerce and finance, and rises or falls according to surrounding influences. It is often so sensitive on signs of bad weather that a passing cloud will change its face… Where operations in stocks and bonds are conducted on the sound principle of business, they are safe, but if, in the hurry to become suddenly rich we plunge headlong into the vortex of speculation, ignoring all the lessons of experience, disaster must follow.
A Lame Duck — is one who has lost heavily and is sorely crippled in his resources, but still has not failed, and is therefore allowed to waddle along. There are some dead ducks in Wall Street, and not a few lame ones. Some have become lame through their own faults; some through faults of others. To the looker-on it would appear the easiest matter in the world to make money in Wall Street. A man looks at the price of Union Pacific at 25 and finds it selling afterward at 40, so he thinks he will go in and buy 100 shares, depositing $600 margin. Instead of U.P. advancing still, as he expected in his ignorance it would do, he finds the stock declines to 35. The fluctuations in the stock market are often so sudden that unless the operator can watch the market, or give orders to his broker to do it for him, he will frequently lose the opportunity of making a good turn.
Investments — “I have made some money, how shall I invest it safely?” is ever and anon the cry of the merchant, tradesman, lawyer, clergyman, farmer, and mechanic. Every decade brings some mania which takes hold of the public mind. At one time there will be a rush for real estate, and every man to be in fashion must live in his own house or buy a patch of ground. Industrious mechanics and tradesmen of small means, with frugal wives, after scraping a few thousands of dollars, rush into real estate. Another time when things are prosperous money will be put out on bond and mortgage — loans are all the rage. Then there are the street railroad investments, which have so frequently been found, if not profitable, at least permanent. Again the different branches of trade are embarked in with ever-recurring failure. Now everybody is off to make a fortune in silver-mining. Then the tide of excitement turns in favor of the oil regions, or carried away to the salted diamond fields of the West.
Salting Down — It is an old saying, “Any fool can make money, but it takes a wise man to keep it.” This is especially true of Wall Street, where money is constantly changing hands. The lucky speculator who, starting with a few hundred dollars, makes a hundred thousand in a few months or weeks, is apt to become careless, and in proportion as his prosperity increases, will often allow himself to be led away into reckless speculation and extravagance, and be caught at last in the meshes of his own folly. The thirst for excitement, the desire to become a millionaire all at once, makes him oblivious to the wisdom of preparing for a rainy day. Salting down may be called conservatism, or “hold fast that which is good;” invest a portion of your money in solid securities. Reverses in every business are sure to come.
Men and Idioms of Wall Street
88 Year Old Contrarian Advice
100-Year-Old Investment Advice
Lessons from a 300 Year Old Book on Markets