Financial History Issue 114 (Summer 2015) | Page 32

With his career established at Forbes,
on September 2, 1930, Schabacker married fashion designer Elizabeth (“Larrie”)
Edwards in St. Thomas’s Church of Hamilton, New York. They later had two children.
The Foundational Books

for the average” investor who is not in the
market as a business. Schabacker believed
he had already covered the specialized
aspects for professional investors.
Technical Charting
Schabacker “prided himself on early
research and practical development” of
technical analysis “chiefly through the
medium of chart study.” He believed that
technical principles are “perhaps the most
profitable tools” of consistently successful
investors because they are based on actual
observations of stock market trends and
history.
While natural factors of supply and
demand influenced the stock market, the
market was also influenced by artificial
factors of pool manipulations and banking
operations, the latter mainly through interest rate changes. Writing in 1930, he noted
that there “is no longer much doubt in the
minds of authorities that pools do exist.”
He posited the four stages of a pool’s
operations: Accumulation, Marking

Collection of the Museum of American Finance

As the bull market climbed into 1929,
Schabacker was convinced that the public,
with a growing desire for stock market
participation and knowledge, needed to be
“completely versed, in all matters affecting
the stock market and its trading operations.” Between 1930 and 1934, he wrote
three books to meet this need.
His first book, Stock Market Theory
and Practice (1930), with 105 illustrations
and 12 appendices, was 875 pages long.
Reviewers described it as the “most complete and exhaustive treatment of the subject” and “most ambitious undertaking
I have ever known.” The first part of the
book described the physical machinery
of securities and exchange operations; the
second part covered “the basic principles”

of technical analysis. Schabacker’s gift to
technical analysis begins in the chapters
toward the end of the book where he
describes various chart formations derived
from the trends of stock prices.
In 1932, he published an instruction
course consisting of 12 weekly “studies”
totaling 400 pages with over 70 charts.
The course, which cost $100, was compiled
into a book entitled Technical Analysis
and Stock Market Profits: A Course in
Forecasting (1937).
Schabacker announced that the course
“comprises a complete and thorough
education in profitable stock market
operation from the technical or scientific
approach.” The course expanded on how
to use and profit from the chart formations Schabacker had described in 1930.
The course became the seminal basis of
technical charting that his brother-in-law,
Robert D. Edwards, and John Magee later
popularized.
His last book, Stock Market Profits
(1934), was a “purely general volume on
profitable but simple rules and methods

Chart of the Dow Jones Industrial Average from 1897–1934, published in Richard Schabacker’s 1934 book, Stock Market Profits.

30    FINANCIAL HISTORY  |  Summer 2015  | www.MoAF.org