Reborn in America, I am a legendary short seller on Wall Street.

Chapter 57 Good Luck Omaha (Seeking monthly votes and recommendations)

The stock in question refers to the Omaha Railroad. At that time, railroad stocks were the hottest and most profitable investments in the United States, and such stocks often experienced a short period of strong performance during dividend season.

Railway stocks have always been one of the most closely watched categories in Larry's notebook.

However, railway stocks also have their own characteristics, namely, large fluctuations and wild price swings, which can easily wipe out a margin deposit of only one dollar.

Larry is reluctant to touch them unless he is absolutely certain.

Larry had actually been watching Omaha stock for a long time.

Every time the stock price dips, a strong force pulls it back to the surface. This regular market support behavior is a classic sign of insider buying, and it's also a technical pattern that Larry, who trades based on price fluctuations, is most confident in.

Larry had already decided he wanted to buy an Omaha before he even reached the counter. But because Larry's acting was so convincing, the clerks happily and generously accepted his deposit when he slapped the $200 on the counter.

A teller began filling out a transaction form: "Buy 200 shares at $62 and a quarter, with a margin of $1 per share. You will also need to pay me a transaction fee of 25 cents."

Larry obediently handed over 25 cents.

After finishing writing, he handed the transaction order to Larry and kindly suggested that he keep the order safe and come here to close the position if he felt the stock price had risen to a suitable level.

After saying that, the teller crossed her arms and added, "..."

"But if the stock price drops to $61 and a quarter, you don't need to come over, because your margin will be automatically liquidated, understand, kid."

Larry nodded, feigning ignorance, then carried the transaction order back to the price board.

At that moment, the stock quote machine was also clicking away, and a young man about the same age as Larry was sitting in front of it, loudly reading out the latest stock quotes.

Larry waited a while and then got the latest price in Omaha: $62 and three-quarters.

The $0.5 jump was not unexpected for Larry, because he bought 200 shares of Omaha at the over-the-counter only after the market-supporting funds appeared at the lower end of the trading range.

At that moment, the transaction slip was in Larry's shirt pocket, but in his pants pocket, Larry was still clutching the remaining $100 in his hand.

Larry had a backup plan: if the stock continued to rise as expected, he would buy another $100; but if Omaha's stock price fell below the $62 mark, he would not hesitate to cut his losses and close his position.

Five minutes later, Omaha's second offer came in, still $62 and three-quarters.

Larry remained unmoved, looked up at the clock on the wall; it was 11:23 a.m., more than 30 minutes before the market closed.

As trading in the stock market became more active, many gamblers gathered in the betting shops. They wore the signature wool suits of the middle class, with patches on their elbows, and stared intently at the price quotes, barely daring to breathe.

Every time the price quote machine roared, they would all look at it without saying a word.

The atmosphere here is different from that of betting companies in Boston.

At 11:40, the third bid came from Omaha. The young man reading the slip of paper, still holding the slip that hadn't been fully dispensed, shouted towards the bid board, "Omaha, $63.1."

Larry was now completely relieved.

The $63 mark was the upper limit of the stock's previous trading range. Now that the stock price has broken through it, even if only slightly, it shows that the insiders behind the stock will not allow the price to fall again.

After the market closed at noon, all the remaining stock prices that hadn't been transmitted poured out of the quotation machine. Larry got the latest quote for Omaha: $63.50.

Larry excitedly pumped his fist, and as he passed the counter, he glanced smugly at the people behind it. Larry's superficial behavior made the clerks even more convinced that he was just a lucky kid who'd had a stroke of good fortune.

After lunch, Larry strolled back to the betting shop to wait for the afternoon session to open.

Three minutes later, Omaha's first offer came in: $64.

Larry had a sudden thought. Based on his understanding of railway stock prices, this was a typical breakout pattern where the major shareholders had finished accumulating shares and were starting to drive up the price.

An ordinary person would think that the afternoon's surge would be the day's high, after which the stock would gradually fall back. But Larry knew that this was just the beginning of the stock price's rise.

Sure enough, in the two subsequent quotes, Omaha's stock price returned to $63 and three-quarters, as if the bulls were unable to maintain the stock's high price of $64.

Larry remained unmoved, but he held onto the remaining $100 firmly in his pocket.

At 1:52 p.m., the latest quote came out, and Omaha's stock price returned to $64. Shortly afterward, a new quote appeared, and Omaha's stock price climbed to $64.1.

Without further hesitation, Larry strode to the trading counter, bid down his remaining $100, and shouted, "Omaha, another 100 shares!"

The two tellers looked at each other, not knowing what to do. According to local practice, if a trader's order is profitable, the teller will not accept additional buy orders.

However, Larry's previous behavior had lulled the two into a false sense of security. After a brief discussion, the tellers decided to take advantage of the boy's pride and wait until the market closed in the afternoon before pocketing his $300 margin deposit.

The teller made a decision, accepted Larry's $100, and took another transaction slip, wrote, "Buy 100 shares of Omaha at $64.1, with a margin of $1 per share," and signed his name.

This time, Larry didn't wait for them to speak again; he slapped the 25-cent coin on the counter and took the transaction slip.

With two trade orders in hand, Larry had completely given up on the act.

The clock struck 2 p.m., with an hour left before the afternoon session ended. Larry waited quietly with his hands in his pockets for the latest stock quotes.

Meanwhile, the tellers, who sensed something was amiss, craned their necks to wait for the latest Omaha stock quote.

At 1:08 p.m., the young man shouted, "Omaha, 66 and a quarter dollars!"

The jump of more than $2 instantly shocked the entire market. Some Omaha holders rushed to the trading desk with joyful faces to cash in their profits, while those who shorted the stock watched their orders become worthless.

Larry remained unmoved. He knew that insiders who had accumulated enough shares in Omaha stock would never be content with merely raising the stock price by 2 points.

Sure enough, in the next 45 minutes, Omaha's stock price jumped by almost $2 with each bid, continuing to climb. Larry could clearly feel the gasps of surprise from the people around him about Omaha's stock.

Railroad stocks were the most active stocks in the US stock market at that time, a breeding ground for speculators to get rich quick.

At 2:55 PM, the latest offer for Omaha came out, and it was a whopping $72.5!
Larry frowned, because according to his expectations, the stock should be over $80 by now. The price of $72.5 seemed high, but it failed to rise again in the final minutes of trading.

Without further hesitation, Larry walked to the counter and slammed down two transaction slips. "I want to close out my position: 300 shares of Omaha!"

However, Larry suddenly remembered something, and his face once again wore a humble but insecure honest smile as he looked at the teller questioningly.

"Is that alright? Does that mean I can keep my promise?"

(End of this chapter)