Technical Conditions

Technical conditions refer to the conditions that usually affect the

supply and demand, such as short interests, floating supply, and stop

loss orders.

It is sometimes said that supply and demand must be equal or else there

could not be any sales, but that is not so. There are always some people

who are willing to sell at some price above the market who will not sell

at the market; and when the demand for
stock is greater than the supply,

it goes up until it is supplied by some of these people who are holding

it at a higher price.

It works the same way when the supply is greater than the demand. There

are always some people who will buy at some price below the market.

Therefore, when the supply is greater than the demand prices must go


A stock may have an intrinsic value of $100 a share and yet be selling

at $50 a share, and it can never sell higher than $50 until all stock

that is offered at that price is bought.

However, you should keep this in mind: if the real value is $100 a

share, sooner or later the market price will approach that figure. That

is why we so strongly urge our clients to buy stocks that have actual

values, or at least prospective values far greater than their market

prices, and either to buy them outright or margin them very heavily, and

then hold them until the prices do go up.

Of course, when one finds that a mistake has been made, the sooner one

sells and takes a loss the better.