The public always wants to be told. That is what makes tip-giving and tip-taking universal practices. It is proper that brokers should give their customers trading advice through the medium of their market letters as well as by word of mouth. But brokers should not dwell too strongly on actual conditions because the course of the market is always from six to nine months ahead of actual conditions. Today’s earnings do not justify brokers in advising their customers to buy stocks unless there is some assurance that six or nine months from today the business outlook will warrant the belief that the same rate of earnings will be maintained. If on looking that far ahead you can see, reasonably clearly, that conditions are developing which will change the present actual power, the argument about stocks being cheap today will disappear. The trader must look far ahead, but the broker is concerned with getting commissions now; hence the inescapable fallacy of the average market letter. Brokers make their living out of commissions from the public and yet they will try to induce the public through their market letters or by word of mouth to buy the same stocks in which they have received selling orders from insiders or manipulators. It often happens that an insider goes to the head of a brokerage concern and says: “I wish you’d make a market in which to dispose of 50,000 shares of my stock.” The broker asks for further details. Let us say that the quoted price of that stock is 50. The insider tells him: “I will give you calls on 5000 shares at 45 and 5000 shares every point up for the entire fifty thousand shares. I also will give you a put on 50,000 shares at the market.” Now, this is pretty easy money for the broker, if he has a large following and of course this is precisely the kind of broker the insider seeks. A house with direct wires to branches and connections in various parts of the country can usually get a large following in a deal of that kind. Remember that in any event the broker is playing absolutely safe by reason of the put. If he can get his public to follow he will be able to dispose of his entire line at a big profit in addition to his regular commissions. I have in mind the exploits of an “insider” who is well-known in Wall Street. He will call up the head customers’ man of a large brokerage house. At times he goes even further and calls up one of the junior partners of the firm. He will say something like this: “Say, old man, I want to show you that I appreciate what you have done for me at various times. I am going to give you a chance to make some real money. We are forming a new company to absorb the assets of one of our companies and we’ll take over that stock at a big advance over present quotations. I’m going to send in to you 500 shares of Bantam Shops at $65. The stock is now quoted at 72.”