Dow's Editorials - Financial Criticism

This is an editorial of Dow included by Nelson in his book ABC of Speculation.

The editorial deals with the writings on stock market by various news papers and periodicals.

Dow cautioned the readers by writing that the press has all kinds of writers. There are ultraconservative and pessimistic writers in contrast to the majority who are inclined to optimism. There are honest and corrupt writers. The moral conditions of writers are governed by the individual and his environment.


Dow said the usual method employed in corrupting the writers is to promise them a call on the shares of a particular company. The method is to offer them to sell the shares of the company at a particular price so that the writer is benefitted if it goes above that price. The writers agree to "boom" or "apply the hot air" to the stock in their stories.

But Dow stands on the side of his men by saying majority of Wall Street financial writers are honest men and they sacrifice the financial incentives offered by manipulators in order to do an honest job.

The stock market reporter or critic's job is to find a reason or explanation for the day's fluctuation. He has to searc out the primary cause.

There are rumours always in the street. A financial writer reports a rumour if he believes there is likely to be some fact in it. But the speculator who uses the rumours for his trade should study the relative values of rumours and learn to take advanatage of their market effects, always remembering that 90 percent of them are not true, but that fiction as well as fact prevails in price making.

It is not the function of the financial writer to win or lose money in speculation for the reader. His duty is to discuss those factors which govern the financial and economic situation giving to each its proper place with even temper and mature judgment. He is not a doctor or a lawyer and does not prescribe.

But if he prescribes, similar to the lawyer or a doctor, he is not responsible for mistakes of judgment. The speculator pays the bill.