Wall StreetWhen I was on the trading floor of the NYSE as an active broker, we had a saying about when to buy and sell a stock. ‘œDon’t fight the tape’. The ‘œtape’ is the ticker tape, a device to display stock prices and quotes that came into being in 1867, invented by Edward A. Callahan of the American Telegraph Company.

When I started on the trading floor, there were no computers yet. (Yup, I’ve been around that long). Anyway’¦ the only way one could tell what the market was doing was to read the ticker tape. Today I doubt there are many current traders on the desks of the major brokerage houses who would know how to ‘˜read, much less fight’ the tape.

So what does it mean to not fight the tape? Simply stated it means that if the prices are falling, don’t go against the trend. Which brings up another old saying from the pros on the trading floor which says: ‘œThe Trend Is Your Friend’. This saying affirms the earlier one in that one should go with the flow, and not try to go against it.

So recently with the ouster of the CEO of Wachovia, and the downgrade by S&P from AA- to A+ of Morgan Stanley, Lehman, and Merrill Lynch, helped all those companies shares decline on the news.

OK’¦ So now we know when not to buy or sell, but when can we buy the financials. Well, that’s pretty simple. Just watch the tape, and when the volume ‘“ the amount of shares changing hands ‘“ begins to slow down or as we say in the business ‘œdry up’, this may signal that there is a turnaround coming. But the tape will confirm this with higher volume and a trend to the upside.

By all signs ‘“ ‘œtrends’ ‘“ this would appear to be a ways off. So I am holding off a while. The only reason I might go against all of the above were if I were a long term investor with at least a 5 year horizon of investment. In this case, I would ‘˜nibble’, but really I mean very small bites at this time.

So remember ‘œDon’t fight the tape’ and ‘œThe trend is always your friend’. Happy hunting.

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Walter Schubert, a third generation member of the New York Stock Exchange is the Founder and CEO of GFN.com: The Gay Financial Network.