Business: The Speculator’s Speculator

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.”

To survive he also needs a computerlike mind, able to keep track of dozens of transactions down to the last eighth of a point. Peering over one of his books in which he keeps his transactions, he stands at his Post 13 on the floor each day, surrounded by brokers clamoring to buy and sell. On a typical morning last week, he had to spend $81,600 at the opening gong to buy 1,200 shares of Brunswick stock at 68 that nobody wanted. Later in the day the stock rose to 68¾, and Coleman sold some. But if the stock had gone down, Coleman would still have had to buy. To even up the odds, the specialist has privileges. Among them: he can trade on only 25% margin v. 90% for other buyers. But the pressure is unrelenting, and Coleman. with nerves as chilled as a dry martini, often turns over $1,000,000 a day, buying and selling. To do this requires capital. Coleman’s firm of Adler, Coleman & Co. has it: an estimated $10 million.

COLEMAN learned his specialist’s skills in the only way possible—on the job. The son of an Irish cop who had the Wall Street beat, Coleman quit high school after a year to go to work as a page boy at the New York Stock Exchange at 14, went to work as a broker at 21. At 22 he borrowed $81,000 from his employer, Specialist Edwin H. Stern, to buy a Stock Exchange seat, has been there ever since. He has been chairman of the exchange, has been a member of the exchange’s board of governors for 16 years.

Specialist John Coleman has made the most of his market opportunities. He is not far behind Millionaire Joseph Kennedy (see NATIONAL AFFAIRS) in his contributions to Catholic charities. He is a Democrat, has an apartment on Manhattan’s Park Avenue as well as a sum mer home in Spring Lake, N.J. Coleman himself takes an almost personal pride in the market: “The fact that we have been able to maintain a continuous mar ket through all sorts of conditions, including the Depression, is the greatest thing anybody ever saw.” But the best thing, says Specialist Coleman, “is that you can never tell when you get up in the morning what is going to happen.” And sometimes before he can find out what is going to happen he has to lay a million dollars on the line.