A Hebrew tipster, who has a considerable following, upon one occasion explained his business and his following in this way: "I occupy the same relation to the stock market that the doctor does to the patient. I diagnose the case, or in other words, with 20 years' experience and some knowledge of speculation, I investigate market conditions and draw conclusions. I try to obtain information whenever I can get it. I examine the fluctuations and volume of trading with care and govern myself accordingly. I am at my office early and late studying the market. It is true that I am almost always a bull. All my subscribers are bulls. I could not exist without them. I never predict declines unless we are on the verge of a panic or a bad break. If I think that a certain stock will decline I advise my clients to 'take profits.' Such advice sounds well. I rarely advise 'short' sales, for experience teaches me that my clients will not make them. I am always positive-more positive when I am in doubt than when I am reasonably certain. No man can succeed in my business unless he is positive. Men who play this game want to follow a leader. They wish to be told to do things. They know that they cannot rely upon their own judgment. In a 'bull' market I can do better for them than many of them can do themselves. Am I often wrong? Yes. But I overlook my errors of judgment, as do my clients in constantly directing their attention and gaze to my successful tips. If a man wants to speculate let him do so. If he wants to buy and has a fancy, advise him as he wishes to be advised. If he buys and loses he will forget and forgive; but, if you advise him not to

make the venture on which he had concentrated his mind, and the market movement favors his conception, then he will never forgive you for, in a majority of cases, he will hold you responsible for the loss of so much money. The stock speculative public is constantly changing. Novices to-day and veterans to-morrow. 'Flush' this year and 'broke' the next. The best we can do is to entertain them while they are here and try to give them a run for their money."

The cheerful humbug responsible for the above views disposes of his typewritten opinions for in round figures about $22,000 a year. That buyers are to be found for the product of the tipsters does not speak well for the intelligence of the buyers. Wall Street regards them with impatience and contempt and would suppress them if it could.

CHAPTER XXVII.

CONCLUSIONS OF A SPECULATOR.

A close student* of speculation in all its forms as conducted on the exchanges of this country has arrived at the following conclusions, which, he says, in application to speculation are "universal laws." He divides his conclusions into two groups, laws absolute and laws conditional.

Laws absolute. Never overtrade. To take an interest larger than the capital justifies is to invite disaster. With such an interest, a flcutuation in the market unnerves the operator, and his judgment becomes worthless.

1. Never 'double up"; that is, never completely and at once reverse a position. Being "long," for instance, do not "sell out" and go as much "short." This may occasionally succeed, but is very hazardous, for should the market begin again to advance, the mind reverts to its original opinion and the speculator "covers up" and "goes long" again. Should this last change be wrong, complete demoralization ensues. The change in the original position should have been made moderately, cautiously, thus keeping the judgment clear and preserving the balance of mind.

2. "Run quick" or not at all; that is to say, act promptly at the first aproach of danger, but failing to do this

*Financial Record.

until others see the danger hold on or close out part of the "interest."

3. Another rule is, when doubtful reduce the amount of the interest; for either the mind is not satisfied with the position taken, or the interest is too large for safety. One man told another that he could not sleep on account of his position in the market; his friend judiciously and laconically replied: "Sell down to a sleeping point."

Rules conditional. These rules are subject to modification, according to the circumstances, individuality and temperament of the speculator.

1. It is better to "average up"* than to "average down." This opinion is contrary to the one commonly held and acted upon; it being the practice to buy and on a decline buy more. This reduces the average. Probably four times out of five this method will result in striking a reaction in the market that will prevent loss, but the fifth time, meeting with a permanently declining market, the operator loses his head and closes out, making a heavy loss a loss so great as to bring complete demoralization, often ruin.

But "buying up" is the reverse of the method just explained; that is to say, buying at first moderately and as the market advances adding slowly and cautiously to the "line." This is a way of speculating that requires great care and watchfulness, for the market will often (probably four times out of five) react to the point of "average." Here lies the danger. Failure to close out at the point of average destroys the safety of the whole operation. Occasionally (probably four times out of five) a permanently

*Pyramiding.

advancing market is met with and a big profit secured. In such an operation the original risk is small, the danger at no time great, and when successful the profit is large. This method should only be employed when an important advance or decline is expected, and with a moderate capital can be undertaken with comparative safety.

2. To "buy down" requires a long purse and a strong nerve, and ruin often overtakes those who have both nerve and money. The stronger the nerve the more probability of staying too long. There is, however, a class of successful operators who "buy down" and hold on. They deal in relatively small amounts. Entering the market prudently with the determination of holding on for a long period, they are not disturbed by its fluctuations. They are men of good judgment, who buy in times of depression to hold for a general revival of business-an investing rather than a speculating class.

3. In all ordinary circumstances my advice would be to buy at once an amount that is within the proper limits of capital, etc., "selling out" at a loss or profit, according to judgment. The rule is to stop losses and let profits run. If small profits are taken, then small losses should be taken. Not to have the courage to accept a loss and to be too eager to take a profit, is fatal. It is the ruin of many. 4. Public opinion is not to be ignored. A strong speculative current is for the time being overwhelming, and should be closely watched. The rule is, to act cautiously with public opinion, against it, boldly. To so go with the market even when the basis is a good one, is dangerous. It may at any time turn and rend you.

Every speculator