Thomas W . Lawson died in the Massachusetts General Hospital ... at 12:30 this morning ... It was stated at the hospital that funeral services would be held at “ The Nest ,” Egypt , Mass ., the only part of the vast Dreamwold estate which remained to Mr . Lawson after his recent financial collapse ... Little has appeared about Mr . Lawson in the last few years except the story of the gradual decline of his health and the even swifter decline of his fortune . In 1922 , faced with the necessity of selling his Dreamwold estate , he disappeared and for some days was in seclusion . There soon followed the sale of his yacht , Trophy , for a song , and the auction of his art treasures . In December of that year the $ 50,000,000 that he once had possessed had dwindled ... to $ 50,000 and the next year saw the gradual dissipation of even the few personal effects to which he had been able to cling . At one time he was so hard up for cash that he offered to trade his car for 5,000 cigars .
A last-ditch effort to rally the troops who , a few decades back , had landed a solid right hand on the chin of the apocryphal System was considered .
In the midst of these misfortunes , in May 1923 , there came an announcement that Lawson , broke , but out of debt , would re-enter Wall Street in the hope of recouping his fortunes . If he did go back into finance , high or otherwise , he did it so quietly and with such little effect that no one ever heard of it .
Throughout history , financial markets have dethroned experts and exalted the unpresuming . Lawson ’ s career , and the WallStreetBets GME saga , exemplify both .
Frenzied Finance to Come
The idea that Wall Street was taught some sort of lesson by the WSB crowd is a silly one ; indeed , at least one hedge fund rode GME ’ s rocketing price up with the Reddit crowd and earned an estimated $ 700 million . Similarly , some WSB dissidents undoubtedly shorted GME at seemingly reasonable prices like $ 100 , $ 200 or $ 300 per share and higher , experiencing huge losses .
In June 2021 , it was reported that a London-based hedge fund named White Square Capital was closing . It took huge losses on a GME short position but claimed that the “ decision to close down is related to thinking the equity long-short model is challenged [ and the ] traditional edge is being arbed away .” Whether or not White Square ’ s comment specifically referred to the activity of WallStreetBets , the dissipation of the trading edges once enjoyed only by large financial institutions has at least something to do with the massive proliferation of commission-free , high-speed trading .
Institutional investors of all sorts often categorize the miniscule , uncoordinated and usually incorrect securities positions of retail brokerage customers as “ dumb money .” But is there any dumber money than that which fails to recognize that lots of so-called dumb money , in the aggregate , can become astoundingly “ smart ” in the blink of an eye ? Or that the old adage about a broken clock being correct twice each day applies equally to securities trading ?
After the January 2021 short squeeze campaign , WSB stated that it would next push the price of silver up , using futures , options and the SLV ETF . A price jump of the desired magnitude never materialized , but here too is a curious coincidence : One of Lawson ’ s last public stock campaigns was in silver stocks . And it , too , proved unsuccessful .
Yet back in the stock market , more recently , the power of WSB ’ s coordination of mass action with flair was seen yet again . Stock picker extraordinaire Jim Cramer in early June 2021 :
Twenty-eight highly paid analysts ... follow the stock of Wendy ’ s ( WEN ). Most of them like the stock very much and pound the table aggressively after every good quarter . And those pushes collectively have meant very little , lost in the miasma of recommendations , a boat tossed on the waves of the overall market . Or at least very little versus u / chillzday , a poster on WallStreetBets …[ who with ] some ... favorable anonymous posts , the stock of Wendy ’ s move [ d ] up 18 %... Despite the fact that Wendy ’ s raised its dividend , announced that its breakfast initiative is ahead of plan and raised its guidance for 2021 , its stock went down . Talk about pounding the table , I was pounding the Wendy ’ s countertop to buy the stock and I clearly had no impact . But no one listened , not one bit , not at all . Or at least no one listened as much as they did to u / chillzday , whoever the heck that is . And you know what ? I love it .
Lawson is long gone , and the last corporate vestiges of Amalgamated Copper were consolidated out of existence in the early 1980s . But for GME , AMC Entertainment and other WSB targets , higher stock prices have brought about a new lease on commercial life ; and finance of a particularly frenzied nature still surfaces regularly . Keith Gill and the meme-bearing , over tenmillion-member WallStreetBets horde — always profane and occasionally mighty — aren ’ t going anywhere any time soon .
Peter C . Earle is a Research Fellow at the American Institute for Economic Research .
Sources
Fayant , Frank ( October 1907 ). “ The Real Lawson .” Success Magazine , 663 – 67 , 701 – 3 ; ( November 1907 ). 719 – 22 , 783 – 88 ; ( December 1907 ). 819 – 22 , 868 – 69 ; ( January 1908 ). 23 – 25 , 42 ; ( February 1908 ). 71 – 73 , 105 – 7 ; ( March 1908 ). 145 – 46 , 171 .
Lawson , T . W . Frenzied Finance : The Story of Amalgamated . Ridgway-Thayer Company . 1904 .
Lawson , T . W . High Cost Living . Privately printed . 1913 .
Zimmerman , D . A . Panic !: Markets , Crises , & Crowds in American Fiction . University of North Carolina Press . 2006 . https :// www . wsj . com / podcasts / the-journal / to-the-moon-part-4-diamond-hands / c5e48f39-6ed6-414f-a0d6-0dc9986640ba https :// www . cnbc . com / 2021 / 06 / 16 / mangroup-ceo-meme-stocks-are-a-falsemarket-sees-shift-in-cinema-industry- . html https :// www . wsj . com / articles / melvin-capitallost-53-in-january-hurt-by-gamestop-andother-bets-11612103117 https :// www . nytimes . com / 1925 / 02 / 08 / archives / tw-lawson-dies-after-anoperation-succumbs-to-diabetes-in . html https :// realmoney . thestreet . com / jim-cramer / jim-cramer-welcome-to-the-new-world-ofwallstreetbets-15678902
https :// www . thestreet . com / etffocus / tradeideas / silver-target-gamestop-traders
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