Editor’s Note: This might be your last chance to sign up to attend Jeff’s big event… At 8 p.m. this evening, Jeff will reveal the details of the cutting-edge system he’s designed to help predict – and profit from – volatility in the equities market. And Jeff believes that with more volatility on the horizon for stocks – and AI stocks in particular – he’s found the perfect strategy for playing the swings ahead. We can’t wait to see everyone tonight. If you haven’t already, you can click here to join us in a few hours for Jeff’s Coming AI Crash event. The Biggest Is the Quietest By Jeff Brown, Editor, The Bleeding Edge At the age of 31, after having climbed the ranks in banking, Albert Wiggin became a vice president at National Park Bank in New York City. It was a remarkable rise for a young man living in 1899. By 1904, Wiggin was recruited and hired as a vice president at Chase National Bank. He became the youngest vice president at Chase in history. And by the age of 47, he became the bank’s president. During Wiggin’s tenure, the bank’s deposits grew to $2 billion by 1930. Wiggin was also responsible for opening a representative office in London in 1923 and rapidly expanding Chase’s banking empire into Europe. It was a remarkable period of growth, and Wiggin had become one of the more prominent figures in banking because of it. Wiggin standing with J.P. Morgan | Source: The English High School Association But the economic growth and effervescence in the markets was just a mask… Something far more dangerous was brewing under the spectacle’s surface. It was a period of excessive speculation – a period where both financial institutions and individuals borrowed heavily to plow money into the stock market. Of course, we’ve heard the stories. We know how it ended – just as every speculative bubble ends. Badly. The Crash of 1929 On Thursday, October 24th, 1929 – otherwise known as Black Thursday – the Dow Jones Industrial Average (DJIA) crashed 11%, trading three times the average amount of shares on any given day. Wiggin, fearing the market crash, engineered the purchase of 25,000 shares of U.S. Steel with a couple of other bankers – well above market prices – to restore confidence and avoid the crash. Before the end of the day, the DJIA recovered and closed down just 6.38 points. Crisis averted. His “act of financial heroism” earned him the title of the “Wall Street Savior.” Of course, we know his efforts were only a thumb shoved into a crack in the dam. On Black Monday, October 28th, 1929, investors faced margin calls and rapidly exited the stock market. The DJIA closed down 12.82%. And then on Black Tuesday, October 29th, it was complete panic. The DJIA closed down another 11.73%. From savior to absolute pandemonium. The Great Depression was in full swing. By July 8, 1932, the Dow had lost 90% of its pre-crash value. Soul-crushing. And yet, someone made out like a king. He Wasn’t Who He Appeared to Be You won’t believe how Albert Wiggin did it. In September 1929, just one month before the crash, Wiggin sold short a massive number of shares – 40,000 shares. Who did he short? Would you believe it if I told you that man shorted the very company he was the President of – to profit on the decline of Chase National Bank? Savage. Here’s the thing… Wiggin was an officer of the company. So he had insider information on Chase National Bank. What he saw was enough for him to set up his profitable short sell. He knew Chase was going down. But I know what we’re all thinking, “Isn’t that illegal?!?” Yes, it is. Very illegal – today. But in 1929, insider trading wasn’t illegal. And it wasn’t illegal to sell short shares in the company you are an officer of. It’s dirty as hell and creates a massive conflict of interest, yes, but it wasn’t illegal. Wiggin made an incredible $4 million from the trade – roughly $71.7 million today, after accounting for inflation. A fortune. And ironically, Wiggin’s allure only grew. He was a hero. So much so that he was honored with the cover of the August 24, 1931, issue of Time Magazine. “The biggest is usually the quietest”… read the subtitle. The charade lasted until 1932 when Wiggin’s dirty little secret was quieted no more. The Wiggin Provision Wiggin’s strategy was ruthless and extremely well-timed. How he executed it is considered very illegal today. Worthy of jail time. His impropriety was later discovered in the course of a U.S. Senate investigation, and memorialized in an amendment to the 1933 Securities Act, known as the “Wiggin Provision.” The Wiggin Provision stated that company directors were prohibited from selling short shares of the stock in their own company. Doing so created a moral hazard and incentivized company directors to drive a company to ruin to profit from their short sales… at the expense of all other shareholders. The more remarkable part of the story, however, is the lack of common sense of Wiggin. As the President of Chase National Bank, he had an insider’s view of the entire banking system, its leverage, and excessive borrowing. He knew not just his bank, but all banks, and the entire market for that matter, were in trouble. Wiggin could have just as easily sold short shares in a large number of other companies without creating a massive conflict of interest by shorting his own shares. He would have made just as much money, perhaps even more, and not have done something so clearly wrong. Wiggin, of course, might have become the whipping boy. But he was far from the only one doing this. The “danger signs” wouldn’t have only been seen by Wiggin – but by a privileged collective of individuals who probably all were making their own downside bets, based on what they all saw behind the curtain. Wall Street was, and still is, littered with ethically questionable characters and crooks who look to profit illegally at the expense of others. We see evidence of this every year when we read about multibillion-dollar settlements between regulators and financial institutions. How to See Behind the Curtain Stories like Wiggin’s have always been fascinating to me – the inner workings of Wall Street and what really happens behind the scenes. Understanding these things over the years has made me a better analyst and a better investor. And for many years I had been searching for ways to shed light on the happenings behind the curtains. After all, industry insiders are everywhere. They have access to information we don’t and never will. And they actively trade on that information. Look back at any stock chart before it’s made a huge move… and you can see it in broad light. The jump before the huge spike. The blip just before the steep cut. The biggest is the quietest. We don’t need to know what they know. But if we can “see” the quiet ebbs and flows of their collective, publicly made trades – how they are executing their strategy based on their own information – we can build our own trades to profit off of what’s to come. After years of development and investment, and thanks to the help of our proprietary artificial intelligence, my team and I can now “see” those patterns. Using a very expensive, proprietary real-time data set, combined with deep-learning technology – a form of artificial intelligence – we can detect otherwise unseen trading signals coming from the darkest corners of the market. These signals indicate when large institutions believe, or intend, for a company’s share price to drop. Imagine a small beacon of light suddenly appearing through the fog... Something interesting is happening “over there.” Recognizing the patterns of hedge funds and investment banks that are selling short the shares in companies in large volumes, we can see which companies are most likely going to drop. Usually, Wall Street does this when it sees a company is way overvalued. It knows conditions won’t last, so it trades with the expectation that the stock will drop and revert to a more reasonable valuation. Just like the Krensavage “Assassin” did with Valeant Pharmaceuticals just before it crashed nearly 90%. They also might know that the next earnings announcement will be bad, or the next product release will be delayed, or there are inventory problems, or a major customer has decided to stop using a product…. The reason doesn’t matter – we don’t need to know it. What’s important is that “they” know. And by watching their moves, we can sidestep that stock and avoid investing in it. And better yet, we can structure a trade to profit from the expected decline. And that means we can see behind the curtains… We have a bird’s eye view. Please click here to join me in Brownstone’s most exciting new project in three years… Regards, Jeff | 