Introduction
XIX
the New York Stock Exchange by an estimated
$26,000,000,000.
In the bull market stocks had reached a level more
than double that of 1926—that is, the prices on the
average of stocks on the New York Exchange had
risen by more than 100 per cent in three short years.
Before the November panic, the stock price level was
not only twice the level of 1926, but nearly four times
the level of 1913, before the war.
And that is not all. What has just been said
applies to stocks which were simply ‘“held,” so to
speak. If an investor had bought stocks in 1913 and
held them in his strong-box until September, 1929,
he would have had $400 for every $100 invested six-
teen years before, and he would have had $200 for
every $100 invested in 1926. Moreover, while
stocks ‘‘held” in this way increased on the average at
a tremendous rate, stocks in active tradings among
the market leaders increased still faster. To be
specific, if in 1926 a trader, as distinguished from
a strong-box holder, had bought stocks which were
then market favorites and had changed his holdings
from week to week, so as each week to possess those
which had proved most popular that week, instead of
having merely the $200 for every $100 invested in
1926, as the strong-box holder had, he, the trader,
would have $1,000 for every $100 of his original
investment. These statements are evidenced by my
two weekly indexes of stocks held and stocks
traded—called the Investors’ Index and the Traders’
Index.