Chapter VIII Summary and Analysis

Livingston is convinced his own knowledge, ideas, and hunches serve him better than any other other sources of information. He discusses the importance of being objective and neutral and not preferring a bear or bull market, but trading based on what conditions actually are. He complains that economic news in the papers is retrospective rather than forward-looking.

Livingston is concerned about the world economic situation in 1906. He expects the San Francisco earthquake and fire, a British war in South Africa, and other disasters will effect the market. The market must drop, and the drop will be a big one. Consequently, he sells short. Unfortunately, a series of market rallies and general instability eat up his profits. Certain the market must eventually go as he expects, he tries again, only to go broke. Frustrated, he wonders where his calculations went...