Specialists, The Managers of the Stock Exchange

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Specialists, The Managers Of The Managers Of The StockExchange:

The Stock Exchange establishment includesthe stock exchanges, along with the EasternBanking establishment, the major investmentbanking houses, and the regulatory agenciesthat serve as the guardians of theestablishment. Because the average investor fails to perceive the magnitude of thisestablishment’s power, or the manner in whichit has immobilized his financial resources, hefails to see that he is looked upon as an objectrather than a person, a commodity to beconsumed and disposed of rather than theconsumer that he should be.The Federal Government has the authority toinstitute the fundamental changes that areneeded that would greatly improve theinvestor’s chances for success. The fact is,however, that the unprecedented magnitude of the Exchange establishment’s coercive powerslong ago reached into the government toestablish its sources of control. Perhaps themost distinctive feature of our democracy in theUnited States is the extent to which thefinancial establishment dominates themechanics of government. There can be nopunishment when the government is your bedfellow.Within the limits fixed by their materialconditions, time, and capacity, investors canlearn to compete successfully against theinsider by following the transactions of thespecialist for his own accounts. It is remarkablehow successful the average investor canbecome at solving his or her investmentdifficulties once they learn how to manage intheir heads two entirely different concepts, themarket as the specialist wants you to imagine itis, and the market as it is because of past andpresent specialist intentions.The specialist is the person who, in theexercise of his role at the center of the market,acts as your broker’s broker on the floor of theexchange. However, at the same time, he isalso acting as both an investor and a trader for himself. For now it is sufficient to point out that,in the exercise of his role, he is able todetermine the long – and short – termmovements of the stocks under his control.Many investors have been surprised anddisturbed to learn that although a specialistmay seem to do very poorly in the market for his customers, he does very well for himself.With the specialist’s ability to totally control theprice movements of his stocks, how can hepossibly be expected to deny himself theopportunities for maximizing his personalprofits while trading against his very owncustomers? Why should anyone expect thestock market specialist to behave anydifferently from any store merchant who sellshis products at retail prices once he haspurchased those products at the wholesaleprice levels?There is only one reliable method by whichinvestors can accurately predict the futurecourse of stock prices. This method is basedon the premise that specialists well in advanceof their happenings know the market’s major trends. It is for this reason that, in determiningthe relevance of a specialist’s pastmerchandising practices to those of his presentpractices, investors are then able to determinewhat events are necessary for the attainmentof the specialist’s future merchandisingobjectives.It is important to note that traditional analysistotally ignores the existence of the specialist. Itconcentrates entirely on the assumption thatthe average investor’s success or failure in themarket place depends on selecting thosestocks whose underlying economicfundamentals will cause them to becomeobjects of public demand, and that publicdemand will cause those stocks to advance in

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