William D. Gann -
An
Operator Whose Science and Ability Place Him in the Front Rank His Remarkable
Predictions and Trading Records
(Reprinted
From an Article of The Ticker and Investment Digest Featuring W.D. Gann dated
December, 1909)
Sometime ago the attention of this magazine
was attracted by certain long pull Stock Market predictions which were being
made by William
D. Gann. In a large number of cases Mr. Gann gave us, in advance,
the exact points at which certain stocks and commodities would sell, together
with prices close to the then prevailing figures which would
not be touched.
For instance, when the New York Central was
131 he predicted that it would sell at 145 before 129. So repeatedly did his
figures prove to be accurate, and so different did his work appear from that of
any expert whose methods we had examined, that we set about to investigate Mr. Gann
and his way of figuring out these predictions, as well as the particular use
which he was making of them in the market.
The results of this investigation are
remarkable in many ways.
It appears to be a fact Mr. W. D. Gann
has developed an entirely new idea as to the principles governing stock market
movements. He bases his operations upon certain natural laws which, though existing since
the world began, have only in recent years been subjected to the will of man
and added to the list of so-called modern discoveries. We have asked Mr. Gann
for an outline of his work, and have secured some remarkable evidence as to the
results obtained there from.
We submit this in full recognition of the
fact that in Wall Street a man with a new idea, an idea which violates the
traditions and encourages a scientific view of the Proposition, is not usually
welcomed by the majority, for the reason that he stimulates thought and
research. These activities the said majority abhors.
W. D. Gann's description of his
experience and methods is given herewith. It should be read with recognition of
the established fact that Mr. Gann's predictions have proved correct in
a large majority of instances.
"For the past ten years I have devoted
my entire time and attention to the speculative markets. Like many others, I
lost thousands of dollars and experienced the usual ups and downs incidental to
the novice who enters the market without preparatory knowledge of the
subject."
"I soon began to realize that all
successful men, whether Lawyers, Doctors or Scientists, devoted years of time
to the study and investigation of their particular pursuit or profession before
attempting to make any money out of it."
"Being in the Brokerage business
myself and handling large accounts, I had opportunities seldom afforded the
ordinary man for studying the cause of success and failure in the speculations
of others. I found that over ninety percent of the traders who go into the
market without knowledge or study usually lose in the end."
"I soon began to note the periodical
recurrence of the rise and fall in stocks and commodities. This led me to
conclude that natural law was the basis of market movements. I then
decided to devote ten years of my life to the study of natural law as
applicable to the speculative markets and to devote my best energies toward
making speculation a profitable profession. After exhaustive
researches and investigations of the known sciences, I discovered that the law of vibration enabled me to accurately determine
the exact points at which stocks or commodities should rise and fall within a
given time."
The working out of this law
determines the cause and predicts the effect long before the street is aware of
either. Most speculators can testify to the fact that it is looking at the
effect and ignoring the cause that has produced their losses.
"It is impossible here to give an
adequate idea of the law of vibrations as I apply it to the
markets. However, the layman may be able to grasp some of the principles when I
state that the law of vibration is the fundamental law
upon which wireless telegraphy, wireless telephone and phonographs are based.
Without the existence of this law the above inventions would have been
impossible."
"In order to test the efficiency of my
idea I have not only put in years of labor in the regular way, but I spent nine months working night and day
in the Astor Library in New York and in the British Museum of London, going
over the records of stock transactions as far back as 1820. I have
incidentally examined the manipulations of Jay Gould, Daniel Drew, Commodore
Vanderbilt & all other important manipulators from that time
to the present day. I have examined every quotation of Union Pacific prior to
& from the time
of E. H. Harriman; Mr. Harriman's was the most masterly. The figures show that,
whether unconsciously or not, Mr. Harriman worked strictly in accordance with
natural law."
"In going over the history of markets
and the great mass of related statistics, it soon becomes apparent that certain
laws
govern the changes and variations in the value of stocks, and that there exists
a periodic or cyclic law which is at the back of all these movements.
Observation has shown that there are regular periods of intense activity on the
Exchange followed by periods of inactivity."
Mr. Henry Hall in his recent book devoted
much space to "Cycles of Prosperity and Depression," which he found
recurring at regular intervals of time.
The
law which I have applied will not only give
these long cycles or swings, but the daily and even hourly movements of stocks.
By knowing the exact vibration of each individual stock I am able to determine
at what point each will receive support and at what point the greatest
resistance is to be met.
"Those in close touch with the market
have noticed the phenomena of ebb and flow, or rise and fall, in the value of
stocks. At certain times a stock will become intensely active,
large transactions being made in it; at other times this same stock will
become practically stationary or inactive with a very small volume of sales. I have found that the law of vibration governs and controls these
conditions. I have also found that certain phases of this law govern the rise in a stock and an entirely
different rule operates on the decline."
"While Union Pacific and other
railroad stocks which made their high prices in
August were declining, United States Steel Common was steadily advancing. The law of
vibration was at work, sending a particular stock on the upward
trend whilst others were trending downward."
"I
have found that in the stock itself exists its harmonic or inharmonious
relationship to the driving power or force behind it. The secret of all its
activity is therefore apparent. By my method I can determine the vibration
of each stock and also, by taking certain time values into consideration, I can, in the
majority of cases, tell exactly what the stock will do under given conditions."
"The power to determine the trend of
the market is due to my knowledge of the characteristics of each individual
stock and a certain grouping of different stocks under their proper rates of
vibration. Stocks are like electrons,
atoms and molecules, which hold persistently to their own individuality in
response to the fundamental law of vibration. Science teaches that 'an original impulse of any kind finally resolves itself
into a periodic or rhythmical motion; also, just as the pendulum returns again in
its swing, just as the moon returns in its orbit, just as the advancing year
over brings the rose of spring, so do the properties of the elements
periodically recur as the weight of the atoms rises."
"From
my extensive investigations, studies and applied tests, I find that not only do
the various stocks vibrate, but that the driving forces controlling the stocks
are also in a state of vibration. These vibratory forces can only be known by
the movements they generate on the stocks and their values in the market. Since
all great swings or movements of the market are cyclic, they act in accordance
with periodic law."
"Science
has laid down the principle that the properties of an element are a periodic
function of its atomic weight. A famous scientist has stated that 'we are
brought to the conviction that diversity in phenomenal nature in its different
kingdoms is most intimately associated with numerical relationship. The numbers
are not intermixed accidentally but are subject to regular periodicity. The changes
and developments are seen to be in many cases as somewhat odd."
Thus, I affirm every class of phenomena,
whether in nature or on the stock market, must be subject to the universal law of
causation and harmony. Every effect must have an adequate cause.
"If we wish to avert failure in
speculation we must deal with causes. Everything in existence is based on exact
proportion and perfect relationship. There is no chance in nature, because
mathematical principles of the highest order lie at the foundation of all
things. Faraday said, "There is nothing in the universe but mathematical
points of force."
"Vibration is fundamental: nothing is
exempt from this law. It is universal, therefore applicable to every class of
phenomena on the globe."
Through the law of vibration every stock
in the market moves in its own distinctive sphere of activities, as to intensity,
volume and direction; all the essential qualities of its evolution are
characterized in its own rate of vibration. Stocks, like atoms, are really centres
of energy; therefore, they are controlled mathematically. Stocks create their
own field of action and power: power to attract and repel, which principle
explains why certain stocks at times lead the market and 'turn dead’ at other
times.
Thus, to speculate scientifically it is absolutely necessary to follow natural law.
"After years of patient study I have
proven to my entire satisfaction, as well as demonstrated to others, that
vibration explains every possible phase and condition of the market."
