The Psychology of Speculation by Henry Howard Harper

Reverting again to the characteristic bent of speculators who trade / on the constructive side of the market, some years ago a man of / my acquaintance bought a hundred shares of Union Pacific at $120 / a share, just for "a turn of a few points," as he expressed it. / Within a few days he sold it at $125, making a net gain of $500, / less commission, -- equal to more than five years' interest at six per / cent. on the $1500 he put up as margin. Someone afterwards convinced / him that he was silly to have sold out at $125, because the stock / was sure to go to $150; therefore he bought it back at $130, and at / $135 he took on another hundred. The stock dropped back to $125, and / on hearing from someone else that it was likely to go down to par he / sold the two hundred shares at a net loss of $1500 and commissions.

About that time somebody discovered that the Company was likely to / distribute its large surplus, consisting of Baltimore & Ohio stock and / other securities, and the stock rebounded to $135, at which figure my / friend repurchased the two hundred shares he had sold at $125. At $139 / he bought two hundred more, which, in a spasm of fright, he sold when / the price suddenly dipped down to $133. Later, at $140, he recovered / his nerve, also the last two hundred shares he had sold at a loss. At / $160 the stock looked cheaper than it had at $120, and having a safe / margin of profit to trade on he bought five hundred more. At $170 it / was reported that Harriman (who controlled the road) was buying the / stock, and encouraged by the entry of such distinguished company my / friend plunged in and bought a thousand shares more. When the stock got / to about $190 it was noised about that the great railroad magnate had / completed his purchases, so the price went down a few points, again / frightening our trader into taking a loss on three hundred shares he / had bought at $189. But concurrently some wise tipster had discovered / that the price had been depressed purposely, to enable other "inside / interests" to accumulate a large line, and in a short time the price / climbed to $200. By this time my affluent friend was becoming somewhat / disturbed and confused, but lured by the prospect of greater gains he / managed to regain his composure, and bought five hundred shares more; / figuring that as long as he was trading on profits he had everything to / gain, and nothing to lose.