Word: lotters
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...wants to buy 1,000 shares of a $1 stock. On the other hand, if he's got $800 for a blue-chip stock, I'd take that business." Since brokers often act as if they are doing him a favor by accepting his money, the odd-lotter frequently feels like odd man out. "I've only got $2,500 to play with," says Hollywood Electrician Richard Johnson. "I know that's not much. But I've had to change brokers three times in the past year, and each time...
Last but not least, Wall Street is perhaps the most superstitious of all business neighborhoods. And the omens look good: according to the lore of the Street, when the little odd-lotter starts buying heavily, the market will soon take a dive. But when the odd-lotter sells, the market will rise. Right now, he is selling. Anyway, all such tea leaves aside, the Dow-Jones average seems certain to pass the 1000 mark within days or weeks...
...Boswell of the small investor is Garfield Albee Drew, a controversial Boston chartist. He tries to call turns in the stock market by keeping careful tab on the odd-lotter-generally the small investor who buys and sells in lots of less than 100 shares. Mustachioed "Jeff" Drew (5 ft. 6 in. and 57), has an unusual attitude toward his subjects: he thinks that they are usually wrong. Small investors, says Drew, are most wrong just when the stock market is making important changes in trends; they sell when the market is getting ready to advance and buy when...
...pull. In the early stages of a bull market, such as now, the public is disbelieving." The rationale of Drew's theory is that the public simply cannot compete with the trusts and other professional investors who operate with more knowledge and less emotion. If the odd-lotter is selling, reasons Drew, somebody must be buying. The buyers are the professionals. Drew's conclusion: selling by the odd-lotters, since it simultaneously reflects a heavy flow of "smart money" into the market, signals a market advance...
WALL Street and Drew often disagree about the nature of the little man. But there is no doubt that he is important: in 1960 odd-lotters accounted for 21.3% of the market's total volume. Many brokers believe that Drew does not do the odd-lotter justice. Even Drew himself admits that while the odd-lotter may be slow to recognize short-term trends, he has done well over the long run, if he held onto his stocks. In ten of the past eleven years, the odd-lotter has bought more than he has sold-while the market...