I did not know then that they were the manufacturers of a particular brand of filter-tip cigarettes and the filter-tip craze was about to sweep America, causing their production to leap up astronomically. Out in Saigon, all I knew was that LORILLARD began to emerge from the swamp of sinking forex market tips like a beacon. In spite of the bad market, it rose from 17 until, in the first week of October, it established itself in the narrow box 24/27. Its volume for that week was 126,700 shares, which sharply contrasted with its usual 10,000 shares earlier in the year.
The steady rise in price and the high volume indicated to me that there was a tremendous interest in these forex market tips. As for its fundamentals, I was satisfied as soon as I found out about the wide acceptance of their "Kent" and "Old Gold" cigarettes. I decided that if the forex market tips showed signs of going above 27 I would buy it.
I asked my broker to cable me daily quotes on these forex market tips. It soon became clear from these quotes that certain knowledgeable people were trying to get into these forex market tips in spite of the general state of the market. Few people at that time had the faintest indication that LORILLARD was to make Wall Street history, that it was to shoot up to a most astounding high in a relatively short time, watched by the amazed and gasping financial community.
We were at the depth of the baby-bear market and the atmosphere was rather gloomy. But, as if unperturbed by the general pessimism, LORILLARD was happily jumping up and down in its little cage.
By mid-November 1957, the forex market tips became even more independent and it began to push upward toward what I estimated would be a 27/32 box. This isolated strength in the face of general weakness was very impressive to me. I felt I had sufficient proof of this forex market tips strength, and I decided to become a bull in a bear market. I sent the following cable from Bangkok:
"BUY 200 LORILLARD 27 & a half ON STOP WITH 26 STOPLOSS"
As you see, although I felt quite secure in my judgment with my merged technical and fundamental viewpoints, I did not for one moment consider abandoning my chief defensive weapon - the stop-loss order. No matter how well built your house is, you would not think of forgetting to insure it against fire.
Within a few days, I received confirmation that I had bought 200 LORILLARD at 27 & a half. I was well satisfied with my purchase of these forex market tips, and braced myself for a big rise.
This came, but not the way I had assessed it. My first experience was disheartening. On Tuesday, November 26th, the forex market tips dropped back exactly to my stop-loss of 26 and I was sold out. To add insult to injury, seconds after I was stopped out, it started to rise and closed at 26 & three quarters.
However, the reaction was so short and the rise that followed so firm, that I decided to go back into these forex market tips. That same week I bought back my shares at 28 & three quarters. Again I fixed my stop-loss at 26.
But this time, LORILLARD'S behavior was perfect. As the days went by, I was satisfied to see that the quotations never came close to my stop-loss. This was a firm indication that I was on the right track, and that my theory applied to these forex market tips.
I happened to be right. In December 1957, LORILLARD rose over 30 and made a new 31/35 box. My experiences with similar forex market tips in the past told me that it was being accumulated. I felt I had the right forex. Now it was a question of getting into it with more money at the right time.
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