Tag Archives: stock market

THE BIBLE MADE W.D.GANN A TRADING LEGEND

Gann was a prolific student of the Bible. He often said it was the greatest book ever written and contains the key to the future. But Gann interpreted the Bible in a completely unique way.

Consider this:

That which has been is what will be, that which is done is what will be done, and there is nothing new, under the sun.’ Ecclesiastes 1: 9

W.D. Gann applied this to the marketplace. Specifically, he believed that the law of action and reaction means that history must repeat. In all markets. Over and over again. Markets are driven by human beings. And human beings do not change. They repeat their behaviours, cycle-after-cycle.

That was the theory, anyway. How did it stack up in practise?

Nuclear physicist-turned Wall Street investment banker Asoka Selvarajah calls W.D. Gann:

‘The greatest genius that the financial markets have ever seen… His achievements in this arena in every way match those of the greatest scientists of our century or any other.’

Gann’s legend started growing almost instantly after moving to New York City. In the month of October 1909 alone, he made 286 trades in one trading session. Only 22 of these were losing trades. A 91% success rate. The press started following him closely. A journalist from the respected Ticker and Investment Digest spent time on the trading floor observing every trade Gann made over several weeks. He later wrote, ‘I once saw him take $130, and in less than one month run it up to over $12,000. He can compound money faster than any man I ever met.

Gann’s love for God and the Bible is revealed in a letter to his former boss,  who cautioned him about investing in the stock market, as he considered it gambling, he wrote, “I have prayed and studied in secret, and I believe I am going to receive my reward. I believe that our heavenly Father, the ruler and maker of this universe, does know our needs, and that He gives understanding according to the way we would receive it. I was much impressed when I read Matthew 6:33: “But seek ye first the Kingdom of God, and His righteousness; and all these things shall be added unto you.” I have sought that Kingdom and I have found it where the good book says it is: “The Kingdom of heaven is within you.” Again the good book says: “If ye believe in me, greater things than these shall ye do.”                                  I believe I can and will do great things.  I firmly believe that the Bible and the Scriptures contain the key to all knowledge, and that all a man has to do is to seek and he shall find , knock and it shall be opened unto him. I believe it is best I go away to New York as soon as I can ……. Through my study of the Bible I have determined the major and minor time factors which repeat in the history of nations, men and markets.”

Two scriptures were important to Gann that everything works according to past cycles. 1. “The thing that hath been, it is that which shall be; and that which is done, is that which shall be done; and there is no new thing under the sun.” Ecclesiastes 1:9 and 2. “That which has been is now and that which is to be hath already been.”

Rocket expert Wernher von Braun once observed, ‘The natural laws of the universe are so precise that we have no difficulty building a spaceship to fly to the moon and can time the flight with the precision of a fraction of a second.

Gann, too, was convinced this precision had predictive powers when applied to the markets, the political cycle, even the whole course of human history.

A friend of Gann’s, Clarence Kirven, wrote: ‘He is the only man I ever knew that I thought had worked as much as Mr. Thomas Edison.

That hard work led Gann to the following conclusion:

To make a success you must continue to study past records, because the market in the future will be a repetition of the past. If I have the data, I can tell by the study of cycles when a certain event will occur in the future. The limit of future predictions based on exact mathematical law is only restricted by lack of knowledge of correct data on past history to work from.

He put out a forecast for 1929 in Gann’s Supply and Demand Letter on the 23 November 1928. In it he predicted with precision the biggest boom of all time in 2929…then the collapse into the 1932 lows.

So how did Gann ‘see’ this cycle when others didn’t?

In short, he put in the work. It was more than that, though, it is hard to dispute that the God Gann believed in provided him with understanding/wisdom from above.