Using comic strips to forecast the stock market
Frederick N. Goldsmith published a successful stock-market newsletter from 1916 to 1948, when he came under investigation by the New York Attorney General for telling his subscribers that his market advice was based on "inside information."
Goldsmith, however, had an unusual defense. He revealed that the primary source of his inside information was the comic strip "Bringing Up Father." Goldsmith believed that the comic strip provided clues, in code, about the direction of the market. The clues had been placed there by "big insiders." This was apparently their way of communicating with each other. But Goldsmith believed he had cracked the code. Details from The Manipulators (1966) by Leslie Gould:
When questioned, McManus (author of the comic-strip) insisted he knew nothing about the stock market and pointed out that he prepared his strip nine weeks ahead of publication. He also noted, "What would I be doing with cartoons if I were so hot on the stock market?"
Having learned the truth, the AG could have dropped the case, but he decided to shut down Goldsmith anyway for misleading his subscribers.
The problem that the AG faced at the trial, however, was that Goldsmith's predictions had actually been pretty good and had served his subscribers well. In fact, many of his subscribers came to his defense during the trial. Nevertheless, the judge shut down Goldsmith's business. More details from The Manipulators:
Goldsmith, however, had an unusual defense. He revealed that the primary source of his inside information was the comic strip "Bringing Up Father." Goldsmith believed that the comic strip provided clues, in code, about the direction of the market. The clues had been placed there by "big insiders." This was apparently their way of communicating with each other. But Goldsmith believed he had cracked the code. Details from The Manipulators (1966) by Leslie Gould:
Goldsmith got the "word" as to what the market and individual stocks would do from following the antics of Jiggs in the "Bringing Up Father" comic strip, which for years was drawn by George McManus. If Jiggs was pictured with his right hand in his pocket, the market was a buy. If there were two puffs rising from Jiggs' cigar, it meant the second hour would be strong.
In one episode, explained Goldsmith, Jiggs was at the theater and remarked: "The intermissions are the only good thing about this show." Goldsmith interpreted that as a sure-fire tip to buy Mission Oil, which he passed on to his market letter subscribers. It went up fifteen points the next day.
In one episode, explained Goldsmith, Jiggs was at the theater and remarked: "The intermissions are the only good thing about this show." Goldsmith interpreted that as a sure-fire tip to buy Mission Oil, which he passed on to his market letter subscribers. It went up fifteen points the next day.
When questioned, McManus (author of the comic-strip) insisted he knew nothing about the stock market and pointed out that he prepared his strip nine weeks ahead of publication. He also noted, "What would I be doing with cartoons if I were so hot on the stock market?"
Having learned the truth, the AG could have dropped the case, but he decided to shut down Goldsmith anyway for misleading his subscribers.
NY Daily News - Nov 18, 1948
The problem that the AG faced at the trial, however, was that Goldsmith's predictions had actually been pretty good and had served his subscribers well. In fact, many of his subscribers came to his defense during the trial. Nevertheless, the judge shut down Goldsmith's business. More details from The Manipulators:
Despite Goldsmith's record of accurate predictions, New York County Supreme Court Justice Benjamin F. Schreiber signed an injunction putting him out of business for keeps in these words:
The defendant. . . was engaged in the business of writing and distributing a market letter to the public which attempted to forecast and predict future prices of securities and commodities.
Subscribers were led to believe that the defendant used statistics, financial reports and charts in preparing. . . prognostications of future price movements. The letter was also so worded as to imply that the defendant had sources of special and secret information concerning stock movements. . .
The subscribers to the defendant's daily market letter had the right to assume that the defendant possessed a superior knowledge of the stock market, that whatever information he had came from living persons and recognized sources and not as a result of interpretations of comic strips. When he failed to inform his subscribers of the alleged sources of information he was concealing a material fact.
The defendant. . . was engaged in the business of writing and distributing a market letter to the public which attempted to forecast and predict future prices of securities and commodities.
Subscribers were led to believe that the defendant used statistics, financial reports and charts in preparing. . . prognostications of future price movements. The letter was also so worded as to imply that the defendant had sources of special and secret information concerning stock movements. . .
The subscribers to the defendant's daily market letter had the right to assume that the defendant possessed a superior knowledge of the stock market, that whatever information he had came from living persons and recognized sources and not as a result of interpretations of comic strips. When he failed to inform his subscribers of the alleged sources of information he was concealing a material fact.
Terre Haute Tribune - June 13, 1948
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Category: Money | Comics | 1940s