Trader Jack -The Story of Jack Miner (The Story of Jack Miner Series) (8 page)

Manson concluded that it was all about the market mood. Whether investors were confident or worried. Bullish or bearish in market speak. Share prices would either lurch upwards or slide, if participants in the market became optimistic or pessimistic. It didn't matter if the reasons were logical or illogical.

In the end Manson decided that shares behaved like live beings. They did their own thing. If they wanted to rise they would rise. If they wished to fall they would fall. There had to be an easier and more profitable way to play the stock market than studying company and brokers' reports. That was the start of Manson's first million.

*   *   *

After studying Manson's book for more than two hours, I felt like a break.

'Want some scrambled eggs, Jack?' asked Martha, who sounded like my Mum.

I stretched and smiled: 'Later, thanks. OK if Pattie joins us for a run?'

Martha went to her bedroom and came back with some running shorts and a white T-shirt that had belonged to Tony.

It was just after six and we ran up the hill towards the west into the evening sun. It was tiring up and down the heath hills, but I felt great. Jazz led the way with Pattie behind him and raced towards some trees near the centre of a hill. They sniffed a couple who were snogging under a blanket, then scampered further up the hill. I followed puffing and panting, onwards and upwards, hamstring and calf muscles straining. The soles of my trainers were digging into the uneven sandy path when I finally reached the top. The dogs were waiting for me and led me towards a clump of trees. From then onwards we followed a much easier downhill route and the path wound towards a pond where people were swimming.

Both dogs were panting and needed a swim badly, but they were barred from entry. I wanted to cool down. So I put on their leads, tied them to the fence, threw off my shirt and sprinted for the water in my shorts.

The pond, with dark brown water, looked dirty.

'Is the water OK?' I shouted.

'Quite safe,' replied a lady who was swimming near me. 'It's running water. Feel the current?'

We chatted as we swam and she told me that the pond was near the source of the River Fleet. From there it flowed underground to the City of London.

'Hundreds of years ago, the Fleet flowed through the City into the Thames,' she said. 'The City grew and roads and buildings were built above the river. It is now below a road known as Fleet Street. London's newspaper offices and printing plants used to be on that street, but they moved to other parts of London. The Corporation of London is in charge of the City and looks after Hampstead Heath. It's because the source of the River Fleet is here.'

I wasn't really superstitious. But wasn't this another sign that I should play the stock market? First Manson's book, second my Hampstead brokers and third the City controlled the Heath.

I couldn't wait to finish Manson's book. I put on my trainers, picked up my shirt, untied the dogs and still dripping ran towards the eastern part of the Heath and Martha's house.

*   *   *

Martha gave me a lovely surprise. She had tidied up the house and made up a bed in the spare room.

'I don't want any rent. Just make yourself at home,' she insisted. 'Pattie enjoyed the run. We want you to stay with us.'

'Wow, thanks Martha. As soon as I get some cash, I'll pay my way.'

'Shut up and finish reading your book,' Martha said. 'I'm not sure that money will make you happy. But if that's what you want . . .'

I ate some bread and cheese while Martha fed the dogs. Afterwards, I sat down on a rickety chair alongside a round antique rosewood table. It had two books on it. The first was by Manson and the second,
The Crowd
by Gustave Le Bon, belonged to Martha's husband.

'Tony was a psychoanalyst,' she said. 'Markets are all about people. Clever individuals invariably become fools in a crowd.'

Martha was a bit strange, but certainly not stupid. She gave me some paper and a pen and I made notes and drawings to adapt Manson's methods so that I could understand how they worked and to picture them in my mind.

Manson believed that investors should ignore brokers' tips, news, profits, interest rates and all that stuff. They should just concentrate on the share prices. Watch and see if the shares keep rising or fall back again. The shares themselves would signal when you should buy or sell them.

It was as if the shares were alive. I remembered the fish in the pet shop earlier in the day. How the fish swam up and down in their tanks, just like shares. I imagined a large aquarium. My aquarium was divided into several compartments. Thin membranes separated the divisions in the tank. Fish swam happily up and down and sideways in their own space. Small blue fish swam at the bottom. Gold fish swam in the second compartment and black fish were in the top part. I imagined that I was throwing fish food on the water. The black fish ate the food, leaving hardly anything for the gold and blue fish in the lower parts of the aquarium. So I threw more food on the water. Hungry gold fish burst through the membrane towards the top where the black fish were swimming. The blue fish followed into the second part of the aquarium swallowing the remaining morsels. After the food was eaten, some of the gold and blue fish returned to the lower parts. Others remained at the top.

Manson explained that the behaviour of shares was similar. For some time a share would fluctuate up and down at the bottom between 100 and 200 pence. All of a sudden there would be a sudden increase in trading. The share would burst into a new range of 200 to 250 pence. That's when Manson would buy. On the other hand, similarly to the fish, the share could force its way to a new 251 to 300 pence trading band and rise even further. This would be a signal that it was going to soar to even greater heights. Manson would keep holding the share for as long as it kept rising. He 'allowed his profits to run'. On the other hand if the share fell to a lower level, he would sell quickly.

I read and re-read the book that was less than 200 pages long. Went to bed at about 2am in the morning and fell into a deep sleep, dreaming about fish in a mammoth aquarium.

The dogs woke me early in the morning, but I was so excited that I wasn't tired. Martha was still sleeping so I took them out for a short walk and then came back again and paged through
The Crowd.
I knew that dictators like Hitler could influence crowds and encourage them to do terrible things. But as Martha said, the crowd also pushed the stock market up and down. Anything could influence the broking and investor crowd. A cure for cancer, an oil discovery, bank crashes or war. If the crowd of investors noticed that certain shares were going up, they would follow and buy. During a panic the crowd would dump shares. The book helped me understand that if I played the stock market, I had to move fast. I had to buy and sell before the crowd. Manson warned that mistakes would be made, but I would be OK if I sold my shares quickly and cut losses before they became worse. The first loss was the smallest loss, he wrote.

I was ready to act, but how?

'The market opens tomorrow and I want to catch some fish,' I told Martha.

'It's a waste of time fishing in Hampstead ponds. Hardly any fish. There's a good fishmonger in Kentish Town,' she said.

'No, I mean shares . . . I want to study the stock market. See which shares to buy.'

'Try Swiss Cottage Library,' grinned Martha. 'It's about two miles from here.'

*   *   *

There were several computers inside Swiss Cottage library. I browsed the Internet to find out what was happening on the London Stock Exchange. Some sites displayed shares on charts. Most shares had peaked recently and were now falling.

I had a pencil and paper and drew an aquarium with units from bottom to top. I didn't bother with the numerous shares that were slipping towards the bottom of the tank. But the charts showed that gold shares were behaving differently. I followed Manson's instructions and examined the charts of gold share prices over a period of three to five years. During most of this time they had done virtually nothing. The gold fish had swum calmly up and down at the bottom of the tank. They were virtually asleep. But suddenly in the past week, gold shares had risen. This was a sign that something was happening. I found that there were lots of gold mines in the United States, Canada, South Africa and Australia. Sure enough, their shares were beginning to rise. A friendly little girl came up to me with her mother and gave me some crayons. She watched me take an orange crayon and draw a gold fish pushing though the membrane. She took the crayon and drew a few more rising from the bottom to the top of the lowest compartment. Some went halfway through the membrane. I looked at the drawing with a child's imagination. My drawing became the aquarium in the pet shop. Gold fish were desperate for food. They were bumping their heads against the membrane of their compartment. I thought about it. The food of the gold mines was gold. If the gold price rose, profits of gold mines would increase and their shares would rise. I searched for a chart on the gold price. The price was hardly moving. That puzzled me until I discovered from the charts that gold shares tended to rise before the gold price began to increase. They also rose much faster and much more than gold. I knew that there must have been some sort of explanation, but I didn't care. From what I saw, if the gold price rose by say ten per cent, gold shares would soar by thirty per cent. If gold bullion jumped by a third, the price of gold shares would double. If gold fell, the shares would come down with a bigger bump. Huge amounts of money could thus be made and lost in gold shares. The charts also showed that a gold share boom could happen within weeks, let alone months!

It seemed that the crowd playing the stock market had become bored with gold and gold shares in the past year. They had decided to leave them alone. Gold fish had swum aimlessly for many long months near the bottom of the tank.

Something had aroused gold fish in the past week. I was so excited that I went to the water tank at the edge of the room and downed two cups. I peered at the tank and imagined my gold fish swimming to the top.

Back at the front desk, I asked the librarian whether there were any chart books on the stock exchange. I wanted to feel the charts in my hands and write down the prices. It would give me an even better understanding on what was happening to gold shares. Manson had done that before the Internet, PCs and laptops were invented. If it worked for him, it would work for me.

The librarian took me to the reference library and luckily there were several chart books with the price history of all sorts of shares. I looked up gold shares with charts going back twenty years.

Five shares interested me. In past gold booms and busts, they had gone up the most and fallen the most. Back in the library I saw a pile of
Financial Times
newspapers. I found the pages of share prices and wrote down the prices of the gold shares, going back a month. I drew another aquarium. Using an orange crayon, I plotted the path of my five gold fish. All had broken through the membrane. I had never traded in the stock market before, but I was sure that the shares were giving a signal. The price of gold was about to rise. If gold dust fell on the water, my gold fish would quickly swim for the food at the top of the tank.

I searched for articles about gold and gold shares in the
Financial Times
and other newspapers. There were hardly any reports. Gold wasn't news. The crowd was ignoring it. The charts and prices indicated that only a few investors were expecting something to happen. I had to move fast. It was too late to buy the shares today, but I would make sure that I was at the brokers at the opening of the stock market tomorrow.

I found out why bank shares had fallen to the bottom of the tank. On the front page of the
FT
was a report about the collapse of Moscow Narodsky bank. Several British banks and companies that had dealings with Moscow Narodsky were caught. They had combined losses totalling billions. According to Nostrum Krebs, an
FT
columnist, the Russian banking collapse had turned into an international financial crisis. He predicted that the stock market would slump. Investors were going to lose fortunes. I hoped that Wardle had sold my shares on Friday.

I glanced at another newspaper and saw: 'The Russian Banker Mystery'. I paged through the paper and found the article in the features section. It was about Boris Yapolovitch, the poor guy who I had found hanging from Charing Cross Bridge. The article wondered if the Russian mafia was involved. It said that there were several other murders during the past year. The men and women who had died were involved with Russian gangsters.

I shuddered and wanted to get to Martha before it was dark. As I was leaving I saw a huge guy walking ahead of me. From the back he looked just like one of the men who I had seen on the bridge. I freaked. But he turned around suddenly and a small child rushed up to him. He was Jewish, with a long black untidy beard. The man picked up the boy and gave him a hug. He was certainly no murderer.

I touched my brow and felt the sweat. After going to Wardle & Co tomorrow, I would get out of London. The question was, where?

7 - A RUSSIAN SCAM

When I arrived back at Martha's place, my jeans and shirt had been washed and neatly folded on my bed. Martha was not only giving me shelter, but was mothering me! We sat down for dinner and had egg and chips.

'Want to make lots of money, Jack?'

'Yes. I'm going to show them.'

'Show who?'

'Them!'

I didn't want to tell her that I was talking about Sandy and her rich boyfriend. It would sound silly. But that was the truth. I couldn't help thinking about her. One day I would have a sports car. Cool clothes. Big flat. Then I would meet her and tell that Taylor guy to get lost. That's what kept me going at the library. That's why I wanted to win. No way was I going to be on the streets again. I had done my bit for the homeless!