Gann’s 1909 Ticker Magazine
Interview on the Law of Vibration
by Richard D. Wyckoff
Some time ago the attention of this magazine was attracted by certain long pull stock market predictions which were being made by William D. Gann. In a large number of cases Mr. Gann gave us in advance the exact points at which certain stocks and commodities would sell, together with prices close to the then prevailing figures which would not be touched. For instance, when New York Central was 131 he predicted that it would sell at 145 before 129.
So repeatedly did his figures prove to be accurate, and so different did his work appear from that of any expert whose methods we had examined, that we set about to investigate Mr. Gann and his way of figuring out these predictions, as well as the particular use which he was making of them in the market. The results of this investigation are remarkable in many ways.
It appears to be a fact that Mr. Gann has developed an entirely new idea as to the principles governing stock market movements. He bases his operations upon certain natural laws, which though existing since the world began, have only in recent years been subjected to the will of man, and added to the list of so-called modern discoveries.
We have asked Mr. Gann for an outline of his work, and have secured some remarkable evidence as to the results obtained there from. We submit this in real recognition of the fact that in Wall Street, a man with a new idea - an idea which violates the traditions and encourages a scientific view of the proposition - is not usually welcomed by the majority, for the reason that he stimulates thought and research. These activities said majority abhors.
Mr. Gann's description of his experience and methods is given herewith. It should be read with a recognition of the established fact that Mr. Gann's predictions have proven correct in a large majority of instances.
''For the past ten years I have devoted my time and attention to the speculative markets. Like many others, I lost thousands and experienced the usual ups and downs incidental to the novice who enters the market without preparatory knowledge of the subject. I soon began to realize that all successful men whether lawyers, doctors, or scientists, devoted years of time to the study and investigation of their particular pursuit or profession before attempting to make any money out of it. Being in be brokerage business myself and handling large accounts, I had opportunities seldom afforded the ordinary man for studying the cause of success and failure in the speculations of others. I found that over ninety per cent of the traders who go into the market without knowledge or study usually lose in the end."
''I soon began to note the periodical recurrence of the rise and fall of stocks and commodities. This led me to conclude that natural law was the basis of market movements. I then decided to devote ten years of my life to the study of natural law as applicable to the speculative markets, and to devote my best energies toward making speculation a profitable profession. After exhaustive research and investigations of the known sciences I discovered that the Law of Vibration enabled me to accurately determine the exact points to which stocks or commodities should rise and fall within a given time. The working out of this law determines the cause and predicts the effect long before the Street is aware of either. Most speculators can testify to the fact that they are looking at the effect and ignoring the cause that has produced their losses."
''It is impossible here to give an adequate idea of the Law of Vibration as I apply it to the market, however, the layman may be able to grasp some of the principles when I state that the Law of Vibration is the fundamental law upon which wireless telegraphy, wireless telephone and phonographs are based. Without the existence of this law the above inventions would have been impossible."
"In order to test out the efficiency of my idea I have not only put in years of labor in the regular way, but I spent nine months working night and day in the Astor Library of New York and in the British Museum of London, going over the records of stock transactions as far back as 1820. I have incidentally examined the manipulations of Jay Gould, Daniel Drew, Commodore Vanderbilt, and all the other important Wall Street manipulators from that time to the present day. I have examined every quotation of Union Pacific prior to and from the time of E. H. Harriman's securing control, and can say that of all the manipulations in the history of Wall Street, Mr. Harriman's was the most masterly. The figures show that whether unconsciously or not Mr. Harriman worked strictly in accordance with natural law.''
"In going over the history of markets and the great mass of related statistics, it soon becomes apparent that certain laws govern the changes and variations in the values of stocks and there exists a periodic or cyclic law, which is at the back of all these movements. Observations have shown that there are regular periods of intense activity on the Exchange followed by periods of inactivity. Mr. Henry Hall, in his recent book devoted much space to ''Cycles of Prosperity and Depression’’, which he found recurring at regular intervals of time. The law, which I have applied, will not only give these long cycles or swings, but the daily and even hourly movement of stocks. By knowing the exact vibrations of each individual stock I am able to determine at what point each will receive support and at what point the greatest resistance is to be met."
''Those in close touch with the market have noticed the phenomena of ebb and flow, or rise and fall in the value of stocks. At certain times a stock will become practically stationary or inactive with a very small volume of sales. I have found that the Law of Vibration governs and controls these conditions. I have also found that certain phases of this law govern the rise in a stock and an entirely different rule operates on the decline. While Union Pacific and other railroad stocks, which made their high prices in August, were declining United States Steel common was steadily advancing. The Law of Vibration was at work, sending a particular stock on the upward trend, whilst others were trending downward."
''I have found that in the stock itself exists its harmonic or inharmonic relationship - the driving power or force behind it. The secret of all its activity is therefore apparent. By my method I can determine the vibrations of each stock and by also taking certain time values into consideration l can in the majority of cases tell exactly what the stock will do under given conditions. The power to determine the trend of the market is due to my knowledge of the characteristics of each individual stock and a certain grouping of different stocks under their proper rates of vibrations. Stocks are like electrons, atoms and molecules, which hold persistently to their own individuality in response to the fundamental Law of Vibration. Science teaches that an original impulse of any kind finally resolves itself into periodic or rhythmical motion, also just as the pendulum returns again in its swing, just as the moon returns in its orbit, just as the advancing year ever brings the roses of spring, so do the properties of the elements periodically recur as the weight of the atoms rises."
''From my extensive investigations, studies and applied tests I find that not only do the various stocks vibrate, but that the driving forces controlling the stocks are also in a state of vibration. These vibratory forces can only be known by the movements they generate on the stocks and their values in the market. Since all great swings of movements of the market are cyclic they act in accordance with periodic law."
"Science has laid down the principle that the properties of an element are a periodic function of its atomic weight. A famous scientist has stated that 'we are brought to the conviction that diversity in phenomenal nature in its different kingdoms, is most intimately associated with numerical relationship. The clambers are not intermixed, chaotically and accidentally, but are subject to regular periodicity. The changes and developments are also seen to be in many cases undulatory."
''Thus, I affirm, every class of phenomena, whether in nature or in the stock market, must be subject to the universal law of causation and harmony. Every effect must have an adequate cause. lf we wish to avert failure in speculations we must deal with causes. Everything in existence is based on exact proportion and perfect relationship. There is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things. Faraday said: ''There is nothing in the Universe but mathematical points of force”.
''Vibration is fundamental; nothing is exempt from this law; it is universal, therefore applicable to every class of phenomena on the globe. Through the Law of Vibration every stock in the market moves in its own distinctive sphere of activities, as to intensity, volume and direction; all the essential qualities of its evolution are characterized in its own rate of vibration. Stocks, like atoms, are really centers of energies; therefore they are controlled, mathematically. Stocks create their own field of action and power; power to attract and repel, which principle explains why certain stocks at times lead the market and 'turn dead' at other times. Thus, to speculate scientifically it is absolutely necessary to follow natural law.''
''After years of patient study I have proven to my entry satisfaction as well as demonstrated to others that vibration explains every possible phase and condition of the market.”