knows the danger of too much "company." It is equally necessary to exercise caution in going against the market. This caution should be continued to the point of wavering -of loss of confidence-when the market should be boldly encountered to the full extent of strength, nerve and capital. The market has a pulse, on which the hand of the operator should be placed as that of the physician on the wrist of the patient. This pulse-beat must be the guide when and how to act.

5. Quiet, weak markets are good markets to sell. They ordinarily develop into declining markets. But when a market has gone through the stages of quiet and weak to active and declining, then on to semi-panic or panic, it should be bought freely. When, vice versa, a quiet and firm market develops into activity and strength, then into excitement, it should be sold with great confidence.

6. In forming an opinion of the market the element of chance ought not to be omitted. There is a doctrine of chances-Napoleon, in his campaign, allowed a margin for chances for the accidents that come in to destroy or modify the best calculation. Calculation must measure the incalculable. In the "reproof of chance lies the true proof of men." It is better to act on general than special information (it is not so misleading), viz.: the state of the country, the condition of the crops, manufactures, etc. Statistics are valuable, but they must be kept subordinate to a comprehensive view of the whole situation. Those who confine themselves too closely to statistics are poor guides. "There is nothing," said Canning, "so fallacious as facts except figures." "When in doubt do noth

ing." Don't enter the market on half conviction; wait till the convictions are full matured.

7. I have written to little purpose unless I have left the impression that the fundamental principle that lies at the base of all speculation is this: Act so as to keep the mind clear, its judgment trustworthy. A reserve force should therefore be maintained and kept for supreme moments, when the full strength of the whole man should be put on the stroke delivered.

CHAPTER XXVIII.

SUCCESSFUL AND UNSUCCESSFUL SPECULATORS.

Speculators may be divided broadly into two classesthose who are successful and those who are unsuccessful. The successful speculator when compared with the total number of speculators is in the small minority. This is a statement that can be established by an examination of any broker's books of accounts. Even in a bull market, the only market in which the outside speculator will trade freely, speculators for the rise lose money.

Almost all speculators are amateurs. They approach the market with confidence, score an initial success and then cast prudence to the winds. Failure is the result. It takes time to make a successful speculator, except under extraordinary circumstances. While simple purchases and sales are in themselves extremely easy, knowledge of stock speculation can only be acquired by experience. A 55-year-old Stock Exchange broker who won and lost three fortunes and yet managed to retire on a competency, remarked on one occasion: "A man usually quits this business at the time when he should begin to make money." This broker won his early successes in the days of Vanderbilt and Gould. Later he was unsuccessful, and in the markets of 1896 to 1902 his winnings were not notably heavy. Just prior to his retirement he said: "The market has changed

since I was a young man. It is a much larger proposition. As I grow older I find that I lack the nerve of my youth. The younger men have the nerve and vitality which I lack. I love to trade and can make money in any market as a trader, provided the fluctuations are wide enough, but my judgment of prolonged price movement can no longer be relied upon, although I know men who are as correct in their market conclusions to-day as I was 15 and 25 years ago. I suppose that I am too much inclined to measure events by my old yard stick; in other words, I am behind the times."

A successful Hebrew speculator, a young man of 35, said during a discussion of stock speculation: "I started out in the dry goods business and recall the time when a dry goods merchant who speculated in stocks was regarded as an unsafe man by his friends and creditors. He was the exception, and yet to-day the merchant who does not speculate is probably the exception. The introduction of industrial stocks doubtless has had much to do with the changed conditions. In my opinion the man who comes to Wall Street without experience in stock speculation and in possession of a large sum of money will become bankrupt or crazy or both. Wall Street is no place for a man with money. The only man entitled to consider himself the possessor of hard common sense and the right attitude toward this business is the one who is satisfied to risk a very little money in an experiment to ascertain if he has the right temperament for a speculator, and, reasoning powers that can be successfully applied to market movements."

It would appear therefore that the successful speculator

should have the knowledge gained through experience, a condition which is suggestive of a period of experimentation and losses. Judging from the view of the retired broker a man may have too much experience, but this experience will be an advantage to him in gaining a livelihood as a trader. From the Hebrew's point-of-view the speculator must experience the up-and-downs of victory and defeat before he can consider himself to be other than a novice.

It must not be concluded, however, that all experienced Wall Street men are successful speculators. Quite the contrary is true. Many of the most successful brokers never speculate, experience having taught them that they do not possess those mental faculties required in the successful speculator. Other Stock Exchange firms, in their articles of co-partnership, require that no partner shall be permitted to speculate. It is also true that the financial critics, who write so knowingly and cleverly of market movements, are not successful speculators, insomuch as they are rarely men of wealth. If their market judgment were as sound and accurate as they would lead one to believe from a perusal of their articles, there is no reason why they should not be millionaires in fact, and yet, strange to say, financial journalism has not yet produced a millionaire speculator.

It is hardly reasonable, therefore, for the amateur speculator to expect to make successful ventures until he has had some experience, and this experience presumably will cost money. It certainly seems wise for the novice to reduce his early speculations to the minimum limit. If he contemplates trading in 100 shares, the preliminary ventures should be reduced to 10 when his theories of market move