Loading ...Chances for Success in the Stock Market
Stock market speculation, notwithstanding all the calumnies and maledictions heaped upon it since its inception, is steadily increasing throughout the length and breadth of the land.
There is no gainsaying the fact that speculation has been the cause of many a lost fortune, but one should not forget that practically all business enterprises of whatever nature are also, in the last analysis, speculation pure and simple. The farmer who plows, fertilizes and plants his lands gambles on weather conditions for a good crop, and then on the prices his products may ultimately bring ; the man who buys a house speculates on his tenants remaining therein and the probability of selling it some day for a higher price ; the merchant who lays in a stock of goods gambles on the possibility of their ready sale ; etc., etc.
The difference is that in one ease a loss or gain is realized slowly and gradually, whereas in the other case they occur more quickly.
That the percentage of losses in stock speculation is greater than in business speculation is due to the fact that in the former ease values (and all values constantly fluctuate, whether seen or unseen) are registered in plain figures on the quotation board or ticker tape, while in the latter case the changes in value, whether it represents the purchase of a house or goods, are not visible. This visible evidence, in the form of changing stock quotations appearing at all times during the business hours of the stock exchange, which influences timid people to buy or sell, more often than not to their detriment, is the principal cause of all the odium which has unjustly fallen upon stock speculation.
This book is not written as a defense of stock speculation, but in the fair spirit of showing, without omission, both its virtues and faults, in order to guide those who intend to speculate, through the dark forest of speculative activities and safely past the rocks and quicksands of ignorant, stupid and blind ventures.
The stock exchange serves as a medium through which corporations are enabled to sell their shares or obligations to the public in order to secure capital for carrying on and extending their business.
All railway, mining and vast commercial enterprises necessarily depend upon the public to purchase a substantial amount of their shares or bonds, for it is quite evident that even one or more groups of wealthy capitalists cannot supply anywhere near the billions of dollars required to run all the business of the various companies.
Unfortunately, the stock exchange, despite its strict regulations, offers many an opportunity to unscrupulous wealthy men for practicing deception and fraud upon guileless and innocent people who come to Wall Street for the purpose of purchasing stocks that will bring them higher dividends than those offered by savings banks with a chance of enhancement in value.
All the mischief that was ever created and almost all the losses that are due to stock speculation can be traced directly to three primary causes ; first, lack of information ; second, gullibility on the part of investors ; and third, the actions of unscrupulous wealthy manipulators, who spread false rumors and tips concerning sudden prosperity in stagnant or moribund companies, of the shares of which they have accumulated a certain quantity at low prices and which they aim to unload on the public, once they have put up quotations where their greed may be satiated.
The trouble is that most investors in the stock market do not take as much pains in investigating the merits of a stock in which they invest hundreds or thousands of dollars as they would in the purchase of a good cigar.
The exercise of just a little prudence or common sense in inquiring thoroughly about a speculation or investment would eliminate most of the harm and pitiable losses that are daily occurrences in Wall Street.
The purpose’ of this book is to help the investor in distinguishing between good and bad speculations or investments, and if it only serves to prevent some of the losses due to ignorance and gambling impulses, it will at least have fulfilled a good part of its mission.
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