"On the late Charles H. Dow's well-known method of reading the stock
market movement from the Dow Jones Averages, the twenty railroad
stocks on Wednesday October 23 confirmed a bearish indication given
by the industrials two days before. Together the averages gave
the signal for a bear market in stocks after a major bull market
with the unprecedented duration of almost six years..."
William P. Hamilton
From editorial in the Wall Street Journal October 25, 1929
With his words, William Peter Hamilton (1867-1929), had written the Obituary
for the most speculative period in American history, the end signaled by a
Dow Theory confirmation.
Hamilton was a man of faith. He had faith in Wall Street's ability to predict
the condition of American business through its stock averages. Born an
Englishman, his adamant defense of Wall Street life is broadly evident in
his book, The Stock Market Barometer. Hamilton eviscerated Hollywood's
portrayal of Wall Street, mocked fiction writers' casting of Financiers as
always sinister, and took to task anybody who would carelessly regard their
own failures as Wall Street's doing. Hamilton saw Wall Street as an
opportunity for individuals to express their ideas; a great stage where
the hopes and dreams of a nation come together and be it rags or riches,
the judgment came, Hamilton insisted, dispassionately from the stock averages.
Hamilton's writings capture his healthy ego. He made no secret that he thought
Charles Dow to be far too cautious in his editorials. Hamilton wrote of
Dow that;
"He {Dow} would write a strong, readable and convincing editorial, on a public
question affecting finance and business, and in the last paragraph would add
safeguards and saving clauses which not merely took the sting out of It but
took the "wallop" out of it. In the language of the prize ring, he pulled
his punches."
There is no proof though, that these two men had anything but respect for each other.
In fact, as you acquaint yourself with Hamilton's writing style, you will feel how he
is chomping at the bit to promote and expand Dow's ideas. Where Dow was cautious,
Hamilton was sure and steadfast. Dow believed that by following his industrial and
rail averages, one could detect "that beneath the fluctuations in individual stocks
there was present at all times a trend of the market as a whole". Hamilton agreed,
and after Dow's passing in 1902, he remained committed to the fledging theory.
Through his writing, "Hamilton developed what he called the "implications" of Dow's
theory", adding meat to the bones Dow had left behind in his own editorials.
Tooling as a writer under Dow at the Wall Street Journal, Hamilton's steadfast dedication
was rewarded when he became the papers forth editor in 1903, a year after Dow had
expired. For the next twenty-five plus years until his death from pneumonia in
December 1929, Hamilton penned more than 250 editorials under the title "The
Price Movement", for the Wall Street Journal and Barron's.
In his editorials and the 1922 book; The Stock Market Barometer, Hamilton had left
behind the ingredients for the next phase of Dow Theory development.
Rhea, Robert, The Dow Theory - Fraser Publishing 1993
Hamilton, William Peter, The Stock Market Barometer - John Wiley & Sons Inc. 1998
Russell, Richard, The History of Dow Theory - Russell Website
With his words, William Peter Hamilton (1867-1929), had written the Obituary
for the most speculative period in American history, the end signaled by a
Dow Theory confirmation.