Business: The Speculator's Speculator

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JOHN ALOYSIUS COLEMAN

Among all the speculators in stocks, no one, day in and day out, takes greater risks than John Aloysius Coleman, 58, a trim, broad-shouldered Irishman with the saturnine look and sad eyes of a bloodhound. He is a stock specialist and is required by the New York Stock Exchange to "make the market" and help stabilize prices in the 52 stocks he specializes in. This means that he must often buy a stock, whatever its price and prospects, when the majority of investors want to sell, thus keep it from dropping too much. He must also sell stocks when the majority wants to buy, thus keep stocks from rising too fast. In the great "Cardiac Break" on Sept. 26, 1955, after President Eisenhower's attack, Coleman and the other 350 New York Exchange specialists laid out about $100 million in one day for stocks that panicky investors dumped on the market. The specialists had no assurance prices would not keep falling until their fortunes were decimated—though the market rallied next day. To outsiders, Coleman's profession seems like gambling on a scale to make a Las Vegas bettor quail.

But Coleman, a Stock Exchange veteran of 35 years and one of its senior specialists, does not consider his job gambling. "I call it speculation," he says. "The difference between gambling and speculation is knowledge." It is knowledge of his 52 stocks, including American Tobacco, Brunswick, Motorola, and W. R. Grace, that is part of the secret of Coleman's success: what stock is likely to be in demand, and—more often than not—why. When a stock goes up, Coleman has usually laid in a supply of it in advance, and turns a profit. Conversely, he often is shrewd enough to unload his supply of a stock before the market in it turns down. The worst thing he has to contend with is fear—the sudden frights that cause investors to dump stocks with little reason. Says Coleman: "Nobody ever got burned to death in a theater fire. They get trampled to death."

WHEN the fire bell rings, Coleman nimbly dodges between frightened investors. Even when the overall trend of the market is down, there are momentary rallies that he can profit by. He can buy a stock one minute and sell it for a half-point profit the next. He often is "long" (buying a stock for a rise) in one stock while "short" (selling for a fall) in another. Coleman actually profited in the Cardiac Break, just as he did in the market's crash in 1929. "We were both long and short. To survive you had to be."