From Why You Win or Lose by Fred C Kelly (1930) Shrewd pool managers long ago learned that, because man is by nature a bargain hunter, it is easy to sell him stocks when prices are declining. For this reason probably the majority of them sell their stocks to the public on the way down instead of on the way up. In other words, most of us in our zeal for bargains are poor judges of bargains. People remember a stock’s former high price long after they forget it also had a former low price. The pool would like to sell all it has at the exact top, but knowing this to be impossible, it doesn’t mind selling on the way down, so long as the average price is considerably above what it paid. Before the big crash of 1929 the public had ample warning that the big fellows were selling and the little fellows buying. Week after week, the published report of the Federal Reserve Bank indicated that the number of margin accounts — stocks held by brokers for customers with loans against them — were inc...
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