Financial History Issue 114 (Summer 2015) | Page 31
Forbes Financial Editor
On November 15, 1925, Forbes business
magazine published Schabacker’s article
entitled “Good Stocks to Put in Christmas
that the column had previously
been written by Managing Editor J.G. Donley, Jr. showed the
importance B.C. Forbes ascribed
to it.
Schabacker’s “Outlook” column
was written under the name R.W.
Schabacker and was headed by a
four-year (and later a five-year)
chart of The New York Times’ composite index of 50 industrial and
railroad stocks and the separate
indexes of 25 stocks each. He wrote
his last column the day before he
died.
Schabacker often contributed
an accompanying article under
the name Richard S. Wallace, the
nom de plume he had adopted for
his lighter humorous pieces. The
articles analyzed leading stocks,
sectors and corporate bonds
rather than current stock market
trends. Since his first years at
Forbes, he had a knack for analyzing the prospects of broadly held
stocks and bonds. He would say he
had been involved in writing all the
other articles.
From 1927 on, Schabacker’s columns showed his increasing interest in the technical side of the stock market. The titles of the columns spoke of
“technical indications,” “technical position looks much stronger,” “signs of distribution,” “no technical market bottom
is yet apparent” and “anticipated technical
support base.” The inclination to the technical side was evident.
The column advised both the “longpull” investor and more active speculator.
Schabacker rendered opinions on when
to buy, sell or gradually begin holding or
lightening positions. He was not adverse
to short selling but was cautious on using
margin. He described himself as having a
conservative temperament, but he was not
willing to forego “speculative profits by
bucking the trend,” a view evoking Wall
Street’s maxim “the trend is your friend.”
Schabacker was willing to admit error.
The 1931 annual forecast column began
with him conceding “to admit frankly that
he was wrong in his prophecy for 1930.”
The Great Depression challenged everyone’s opinions.
Courtesy of Princeton University
with high honors, as he ranked
22nd in his class of 212 graduates.
Alumni would later “remember
the sly intelligence of his humor,
and his power of dispassionate
observation of what went on
around him — a power which was
to make him one of the recognized observers and interpreters
of trends in the business world.”
That career began at the Federal
Reserve Bank of New York, where
Schabacker worked from 1921 to
1923. While working in the Reports
Department, he constructed a
stock market index of representative stocks that went back to 1872.
He likely selected that year because
in September 1871 the New York
Stock Exchange had established a
continuous market in stocks.
Schabacker linked his 1872–
1896 series to the original Dow
Jones Industrial Average (DJIA)
from 1897 to 1914, and then to
the 1914 version of the DJIA after
the Exchange reopened that year.
He undertook this project because
“there was no accurate index of
American industrial stock prices
dating back very far beyond the
opening of the 20th century.” He used his
longer index as a comparison to historical
interest rates and business activity.
Schabacker may have worked for a
short time in 1923 at Standard Statistics Company, Inc. before he returned
to Princeton in September to obtain a
graduate degree in English. Pursuing a
financial writing and literary career, Schabacker studied literary criticism, Greek/
Hellenistic