CHAPTER III.

THE RIGHT TEMPERAMENT FOR A PROFESSIONAL SPECULATOR.

A man who wins by haphazard speculation, who chances to operate successfully until he has filled his pockets, and retires with his gains from so fascinating an arena, is one in a hundred. Any one who knows anything of Stock Exchange speculation will confirm the statement that, to the ordinary run of men, the game is not worth the candle. There are, however, conditions under which speculation, in a market where ten or fifty thousand pounds can be lost in half-an-hour, may, under given conditions, be systematically practised profitably. First, and most important perhaps of all these conditions, is the temperament of the speculator, upon which we propose to speak in this chapter.

[Sidenote: COOL-HEADEDNESS AN INDISPENSABLE CONDITION OF SUCCESS.]

A man who is excitable and easily led away from a set purpose will, if he go deep into speculation, be soon involved in hopeless ruin. A method of proceeding that has been formed by a careful judgment which has provided for all contingencies, once adopted, should be adhered to as a rule. To be able to follow this advice it is necessary that a speculator should possess a coolness that is not affected by the excitement into which others are thrown by unexpected events; that he should cultivate the art of concealing the dissatisfaction felt on sustaining a loss, which is read at once in the face of a nervous or excitable man; and that he should have the power of calling forth emotions which are the opposite of those commonly manifested under given circumstances. In speaking of the conditions under which speculation may be successfully pursued as a business, it must be understood that we are referring to the one man in the hundred—the professional operator—who will frequently in the elaboration of his arrangements find it necessary to be in the markets himself, gaining what advantage he can by personally dealing either as a jobber or a broker. It is obvious that, when a man enters a market with a view to doing business, his object is to transact it upon the most favourable terms for himself. He confronts those who are prepared to deal with him either way, that is, to buy or to sell. According as he “opens” to the dealers, or, in other words, indicates what he wants to do, the dealers will make their prices. If he be a buyer, they will try to get him to pay as high price as possible and _vice versa_. His business therefore, if he be really a buyer, is to try to look as if he were a seller. He may enter the market under a variety of influences. He may know from private sources, for certain, that a stock is about to improve much, and he may intend to buy as much as he can get at a fixed limit as regards price. If he is anxious to operate largely, and possess but a poor control over his countenance, the probabilities are that he will be read at once, and the market be immediately raised above his limit if he attempt to buy any considerable sum. In the same way, if being a broker, he is instructed to get a client out of a large amount of stock for any particular reason, the suspicion of which he is not able to conceal, the price will be lowered to him in an instant, unless it be an easy market to deal in, or by chance an opposite influence springs up at the moment to improve the price.

Ninety-nine men out of a hundred when they are made stock-brokers are comparatively young, who make a start for themselves after having been many years clerks. These men are eager for profit, and commence at once to go through a course of training which daily saps from their physical powers the very element upon which a cool temperament rests. The hurry-scurry, wear and tear strain upon the nerves which is involved in running from one client to another for orders, deprives a man by degrees of those qualities, if he ever possessed them, which are indispensable to the professional speculator. A man whose daily bread for his wife and family depends upon the execution of a certain amount of business, must of necessity manifest some degree of eagerness to do the business intrusted to him, and that eagerness keeps up a strain upon the nerves, and through them upon his physical powers, which weakens the capacity of forming very rapidly a correct judgment, and renders the intelligence liable to become confused under circumstances when to lose the head for a moment may involve a certain loss of money. Professional speculators are consequently very seldom men engaged in the business of dealing in stocks and shares for others, as the kind of labour is incompatible with the maintenance of the cool temperament which is necessary to success.

[Sidenote: THE USELESSNESS OF HAPHAZARD SPECULATION.]

There is nothing like unsystematic speculation to destroy the cool temperament of a man. A loss incurred through hasty ill-matured operations renders him impatient to recover it, which probably leads to its being doubled. If he chance to recover the loss, instead of pausing to reflect upon the surprise created in himself by a result only feverishly hoped for, he goes on blindly tempting fortune, only to experience ups and downs which unsettle his judgment more and more, until he begins to “plunge,” when all is soon over.

[Sidenote: ACCURATE FORESIGHT.]

Any one who has moved about at all amongst financial experts, and has closely observed them, must have noticed that they seem to be men far above the average as regards penetrative intelligence, appearing to possess that calm precision of judgment, which, as a rule, is only secured by the deliberations of many persons. Men who have amassed a great deal of money, by their own unaided intelligence, have been men of steady accurate foresight, men who have possessed a large capacity of judging what the public will do in the Stock markets under certain circumstances. A great speculator must make it his study to gather into a focus the various effects that are likely to arise under a given transformation of circumstances, analyze them, set one against the other, and calculate out the effect that will be caused when their forces are spent.

[Sidenote: THE COOL MAN, OR PROFESSIONAL SPECULATOR.]

We will now suppose we are watching the speculator of the cool calculating temperament, and also the excitable man who is always acting on new ideas, which, he thinks, will occur to no one else until he has made money out of them. The cool man sits quietly down and reasons with himself, and arrives at the conclusion that what is indispensable to him as ground work is, first, some capital, a sum proportioned to the contemplated extent of his operations. Without this to commence with, speculating under any conditions is about as sensible, and about as likely to be followed by the desired result, as attempting to ferry people across a deep stream without the aid of a boat. Secondly, early information is equally necessary from all other markets where the securities are dealt in in which he contemplates speculating. To render such information as far as possible trustworthy, a branch house in the cities where there are important bourses is desirable. These two portions of the machinery are absolutely indispensable, if success in large operations is to be the rule and not the exception; and the man with the cool temperament will probably owe his success as much to the judgment which showed the necessity of these accessories, as to the well and timely directed operations which, based upon them, result in profit.

[Sidenote: OBSERVANCE OF THE DAILY PUBLISHED TELEGRAMS FROM ABROAD.]

With the necessary capital and machinery duly prepared for instant action when a good opportunity occurs, the cool man plants himself in a prominent position from which he can discern at once the small cloud on the horizon which warns of the coming storm. The telegrams in the daily press, as they rise above such hypothetical horizon, are the harmless or otherwise little clouds which our speculator will scan, making a note of any which may seem to deserve attention for any special reason, on account of the effect they may be calculated to have upon the public mind. Well-conducted journals only admit into their columns telegrams from trusted correspondents, or from the public companies who supply them, and whose interest it is to adopt every precaution against imposition. An important telegram in a high class journal standing on its merits will always produce more or less effect, and it is of much consequence, but in the second rank, in the chain of machinery necessary to insure success for the speculator, that he be posted hourly throughout the day in the telegraphic news which reaches the seat of his operations. Side by side with this telegraphic intelligence which appears in the press, the speculator will receive private telegrams in cipher from his correspondents abroad, and according to his skill and intelligence in reading between the lines of the two, and judging of the probable course of events by their light, will he be able to operate profitably or not.

Pure speculation as a business, the sole object of which is to gain money, is, from the point of view of risk, removed far out of the ordinary path in which men labour for profit. Only a small percentage of men desire, even if they thought they possessed the required exceptional qualities, to gain their living in such a way. Most men reason that life is short, and that to spend it always in an atmosphere of excitement, under circumstances which keep up a constant destructive mental strain, is a mode of gaining money that involves too heavy sacrifices. The speculator who deliberately selects that calling must consequently be a man peculiarly constituted. He is generally a man of rather singular habits of thought, who thinks it quite legitimate to start a Juggernaut, and drive it over the crowd, if thereby he can do it profitably. Perfectly legitimate processes of working a market with him, would be considered little better than cheating by the ordinary run of men. He employs systematically all sorts of devices for getting the better of others who are ignorant and less sharp in foreseeing events than he. He does not scruple to lay traps, and drive the public into them, by plying them with fictitious telegrams, if he can get them published, and by forming syndicates to “rig” the markets. He partakes, indeed, a good deal of the nature of the bandit, who prepares the way for forcing concession to his demands by firing a volley into the carriage of the traveller to whom he is going to give the choice of his money or his life.

[Sidenote: THE SELFISHNESS AND HARD-HEARTEDNESS OF THE PROFESSIONAL SPECULATOR.]

If he intends to buy a large amount of stock, which he knows is going to rise, he throws off the cloak of secrecy when he enters the market to sell, and depresses the price as a preliminary feint, so that the contemplated rigging of the price may be as little encumbered by bulls as possible. When it is known in a market that a great speculator is selling, weak bulls are speedily frightened out, and when he has such an object in view it is his “game” to intimidate with all the force of his prestige and the power of his capital. Such a man must have a concrete hardness of indifference through which nothing can penetrate to his heart. It is as necessary to the success of his operations that he possess no more regard for the feelings or pockets of other people than a hungry tiger would for him if he were airing himself unconcernedly in a Bengal jungle. He has a purpose in view, just as a surgeon has when the amputation of a leg has been decided upon. The speculator’s sole aim in the operation is the profit, towards which he cuts his way, regardless of the nature of the obstacles to be overcome, just as the knife is plunged into the flesh, severing the arteries, muscles, and sinews that surround the bone which it is the object to reach and saw through.

For a man to tread a path in which he must systematically not only disregard the interest of other people, but deliberately calculate upon the weaknesses of human nature which characterize the crowd, in order to work upon them for his own ends, it is obvious that he must be constituted in a quite exceptional manner, and not in a way that it is at all desirable that others should attempt to imitate. If uninitiated people who enter the arena in which some of the professional speculators flourish, were to spend some months in gathering information and in close observance of the _modus operandi_, so far as they can get to see and hear, many of them would soon be persuaded that they were utterly useless at such work, and would retire, thanking their stars they had been sensible enough to look on at the game before hazarding anything themselves. From the very fact that but few are successful as professional speculators, it can be safely argued that but few are competent to engage in the business at all, even when educated in all the tricks and deceptions necessary as collateral aids to the machinery which we have shown, and shall show more in detail, to be a _sine qua non_. Those qualities which have, more particularly in the past, characterized the successful diplomatist are also of the utmost importance to the speculator. Successful diplomatists in all times, with few exceptions, have been men who have never scrupled to resort to finessing, chicanery, and the _ruse de guerre_ in every form under cover of a saintly innocence that would shame the devil. Deception in all its forms will be found in the armoury of the professional speculator, and the weapons, two-edged, are employed with a laboured precision of which a glimpse by the outsiders is occasionally to be obtained because it is impossible completely to conceal the fringes of the organisation by which his gains are netted.

[Sidenote: THE NON-PROFESSIONAL OR HAPHAZARD SPECULATOR.]

We now turn to the non-professional speculator, and what a pitiable plight is that in which these gentlemen in ninety-nine cases out of one hundred ultimately find themselves. The members of the Stock Exchange liken their place of gathering in Capel Court to a barn, and themselves to fowls inside it, who repair thither every day to pick up the golden grain thrown in by the public. This description is not exaggerated, and the more marvellous does it become as one reflects upon the subject. Many and many is the man that has toiled and earned a fortune to produce him a competence for the rest of his days, who has been lured into that fatal vortex, in very many cases because industry had become a habit with him, and he found retirement irksome. “I amuse myself with a little jobbing in the stock markets, just to have some object for going up to town twice a week,” he says to a friend in the train, with whom he chances to be travelling. Such is the beginning of more sorrow in respectable households than the world has any idea of. Many a pensive countenance furrowed by the Stock Exchange, carries in its deep lines the index to a heavy volume of lugubrious family history, which, partly from shame, is sealed but to the few who must know its contents. Prosperity brings wealth in its train, and people put by at first their gains, until a taste for the excitement of dabbling in the markets grows into a thirst, and from that into a mania, which is generally the frontier to be repassed with empty money-bags, and a sad heart, by a wiser, if not a better man. It is not so easy to be good on nothing after one has had £5,000 a year, and hence a deal of the mischief that results from the foundering of Stock Exchange speculators.

The haphazard man, who is the antithesis of the professional speculator, will generally be found as differently constituted as are the results of his operations. The man who makes a study and business of speculating, investigating every detail that it seems necessary to probe until he has adapted it to the rest of his machinery, will be found to be a hard-grained man, sailing very close to the wind, while your persistently haphazard man is mostly a person of flabby character, and no less flabby mind, as easily frightened off a line that he has set himself to follow, in the innocence of a heart that expands with a delusive consciousness of possessing power, as a stray rabbit. Such a class of man is to be found by hundreds in the haunts of the Stock markets, and they are always fidgetting in and out, first as little bulls, and then as little bears, disappearing after a sharp panic like flies from a joint of meat that is rudely disturbed by the shop-boy, with the important difference that whereas the flies always get something, the speculators invariably drop their money.

The following letter which appeared in the _Spectator_ of the 4th October, 1873, struck us as being _a propos_, as regards a portion of it, of this part of our subject. It affords another instance of the success which follows the trial of a haphazard speculator’s “scientific plan.” In playing against a public bank the gambler should know in these times that the science of mathematics has been already employed on the side of the managers, and is arrayed against him as a fixed law, working on the side of the _croupier_, whether he wills it or not:—

“A friend of mine who was not with us, but who had had many weeks’ experience at Monaco, had communicated a little plan for an all but moral certainty of winning, which was founded on the most scientific principles, but the only defect of which was that the banks gave one no conceivable means of carrying it into practice—a defect, indeed, which I believe he himself had verified by leaving Monaco a loser, in spite of his scientific plan. His idea was this:—It is obvious that even where,—say at roulette,—the chance of the next ‘odd’ or ‘even’ is precisely one in two, or one-half, the chance of a run of any given eight results in a _specified_ order,—such as odd, odd, even, odd, odd, even, even, even,—will be only one in 2 × 2 × 2 × 2 × 2 × 2 × 2 × 2, or one in 256. If, then, my friend bethought himself, you could but steadily stake your money so as to stake it against the arrival of this highly improbable compound event, you would be sure to win. I quite agreed in this extremely sagacious principle, but the difficulty, unfortunately, was in the application of the theory. The bank gives you no chance at all of staking your money against any complex event. It admits only of your staking it in favour of or against the simple elements of this compound event. And, unfortunately, though it always remains highly improbable that any specified run of eight will take place, as you can only stake your money time by time on each single one of the eight component elements of the event, and as, in each of them separately, the chance is one in two, and not one in 256, it is simply impossible by the rules of the game so to play as to have the chances in your favour. I did, indeed, think of requesting the bank to let me stake on the result of two or three successive twirls of the roulette table, instead of on one at a time, but since my French was extremely bad, hardly adequate to protesting against the accidental raking up of my money when I had actually won, and since, had it been better, I had no hope that the authorities would comply with a request so very unsafe for themselves,—the drift of which, indeed, the croupiers might hardly have caught at the first suggestion, but would certainly have suspected,—I reluctantly abandoned my friend’s scientific receipt for winning, and was contented to lose.

“The gamblers of our party were but three in number, and all firm of purpose not to exceed the small risk we had prescribed for ourselves of 125 francs each. I was the eldest and rashest of the three, my money being soonest gone, though not for two or three hours, and it was never for a moment doubtful but that I should be a loser in the end. My companions were both cooler and cannier in their play. They did not, like me, precipitately put down their money before the croupiers had raked up the stakes lost by the previous catastrophe. They did not stretch over other players so awkwardly as I did,—indeed, the croupiers had to rebuke me mildly, by begging me to use a rake; and then, when I did use the rake, I managed to knock the most desperate gambler in the room about the head with it, and draw forth a fierce remonstrance, which made me recall with uncomfortable vividness that there was a pistol-practising ground (‘Tir-au pistolet’) in the garden of the hotel, which would readily furnish the instruments for a meeting, wherein I should hardly have come off with a mere moral lesson. Indeed, I felt clear, after watching my companions,—one of them a shrewd counsel, learned in the law, the other a cool, sagacious Cantab, who came out high in the Tripos the other day,—that neither of them had the true gambling instinct as strongly as I, though so far as their experience went, it seemed to confirm my own. And what was that experience? This chiefly,—that I was distinctly conscious of partially attributing to some defect or stupidity in my own mind every venture on an issue that proved a failure; that I groped about within me for something in me like an anticipation or warning (which, of course, was not to be found) of what the next event was to be, and generally hit upon some vague impulse in my own mind which determined me; that whenever I succeeded, I raked up my gains with a half-impression that I had been a clever fellow, and had made a judicious stake, just as if I had really moved a skilful move at chess; and that when I failed, I thought to myself, ‘Ah, I knew all the time I was going wrong in selecting that number, and yet I was fool enough to stick to it,’ which, of course was a pure illusion, for all that I did really know was that the chance was even, or much more than even, against me. But this illusion followed me throughout. I had a sense of _deserving_ success when I succeeded, and of having failed through my own wilfulness, or wrong-headed caprice of choice, when I failed. When, as not unfrequently happened, I put a coin on the corner between four numbers, receiving eight times my stake if any of the four numbers turned up, I was conscious of an honest glow of self-applause. I could see the same flickering impressions around me. One man, who was a great winner, evidently thought exceedingly well of his own sagacity of head, and others also, for they were very apt to follow his lead as to stakes, and looked upon him with a sort of temporary and provisional, though purely intellectual respect. But what quite convinced me of the strength of this curious fallacy of the mind, was that when I heard that the youngest of my companions had actually come off a slight winner, having at the last moment retrieved his previous losses by putting his sole remaining two-franc-piece out of a hundred and twenty-five francs he was willing to risk, on the number which represented his age, and gained in consequence thirty-two times his stake, my respect for his shrewdness distinctly rose, and I became sensible of obscure self-reproaches for not having made use of like arbitrary reasons for the selection of the various numbers on which I had staked my money during the period of my own play. It was true that there was no number high enough, sad to say, for that which would have represented my own age, so that I could not have staked on that,—but then, why not have selected numbers whereon to stake that had some real relation to my own life, the day of the month which gave me birth, or the number of the abode in which I work in town? Evidently, in spite of the clearest understanding of the chances of the game, the moral fallacy which attributes luck or ill-luck to something of capacity or gift, or incapacity and deficiency, in the individual player, must be profoundly ingrained in us. I am convinced that the shadow of merit and demerit is thrown by the mind over multitudes of actions which have no more possibility of either wisdom or folly in them than—granted, of course, the folly of gambling at all—the selection of the particular chance on which you win or lose. When you win at one time, and lose at another, the mind is almost unable to realize steadily that there was no reason accessible to yourself _why_ you won and _why_ you lost. And so you invent—what you know perfectly well to be a fiction—the conception of some sort of inward divining rod which guided you right when you used it properly, and failed only because you did not attend adequately to its indications.

“Such is the experience which I carried away with me from amidst the objectionable smells, the unsavoury company, the malignant gnats, the haggard revelry, and the general moral squalor of Saxon-les-Bains; and when my wife reproached me, with triumphant references to her own warnings, for the missing five pounds, I replied, what I really feel,—though I know I shall never convince her of it,—that my experience was not dearly bought. Is it the only case in which the fiction that we ourselves have _earned_—whether good or evil fortune—forces itself with absurd tenacity upon us? Luther himself could hardly have desired a better proof than this of the pranks which the imagination plays us when dealing with that sense of merit and demerit, so closely bound up with our human egotism. We give ourselves credit, and get credit, I suspect, for a vast deal more both of wisdom and folly in life than we deserve. Are nine-tenths of the prizes and the blanks of life at all more ascribable to any fine selective purpose or deficiency thereof in him who draws them, than my losses, or my friend the Cantab’s sudden retrieval of his loss? Yet I still look upon that able and thoughtful youth with a deep sense of respect for his cleverness in retrieving his losses, and on myself with a melancholy consciousness that, like ‘Traddles’ in ‘David Copperfield,’ my native awkwardness of mind must have been the cause of my very moderate reverses.—I am, Sir, &c.,

“AN INSTRUCTED GAMBLER.”[26]

[Sidenote: THE MISFORTUNE OF EARLY GAINS.]

The greatest misfortune that can happen to the haphazard speculator is for him to make money the first two or three “accounts.” He will, in such a case, in the first place believe himself to possess some uncommon luck, or a shrewdness for selecting a security that was about to move in the direction he had reckoned upon. The operations of the most stupid speculator are frequently attended with such results, just as they might also be on his first essay at pitch-and-toss. Such incipient luck, by drawing forth the commendations of others, especially of the brokers—who do not generally err on the side of warning the individual against the dangers which beset such a path—builds up in him a false estimate of his powers. Early success associates his mind with the gains and not with the losses, and the latter are incurred subsequently with a light heart, as a sort of accident that will be sponged out by the results of the next throw.

A case came under our notice of the extreme danger of good luck attending a first operation, but it was in another market. A Spaniard had settled in London with his wife and family, and had entered into partnership with another gentleman. Much money had been made in iron, and prices had attained to an unprecedented figure (it was in 1872). He bought on pure speculation 30,000 tons, and cleared £6,000 profit. Elated with such success, his next operation was a purchase of 40,000 tons. The price fell £1 a ton. He lost all his own and his partner’s money, and fled from the country leaving his family destitute.

But when two or three losses have been incurred the confidence becomes somewhat shaken, especially after a large operation has been attempted, so as to recover the losses on several smaller ones at one _coup_, and has failed. Then some sort of a system will be tried, but the bad judgment which has landed the haphazard speculator so far without his having perceived the necessity of machinery and a system, will prevent his adhering to any set purpose. Such a man acts on this information and on that, led away by the plausibility of a wiser head possessed by a person who goes about like a big fish in the deep waters, disposing of the smaller fry for his own purposes.

[Sidenote: VERY FEW FAILURES MADE PUBLIC.]

To dig to the bottom of the question without attempting further to widen it, what are the chances against the haphazard speculator? If we ask ourselves whether we have known personally any individuals who have succeeded as haphazard speculators, we must reply emphatically in the negative. It occurs to us on making this observation that we have heard of one individual, who may be described as a haphazard speculator who did get clear off with £100,000, and we believe it to be correct. Everything he touched chanced to go the right way until one morning he raised his hat to his friends and the members who were in the markets at the time, and bid them farewell. He was a solitary instance of a man with sufficient strength of character to say to himself, “Thus far shalt thou go and no farther,” and he adhered to it. Many had made as much before, but they could never stop until it was all lost again. How is it so little is heard of those who venture and fail, for the practice would be greatly discouraged if the failures always came to light. All concerned are interested in keeping such matters quiet for obvious reasons. The broker who does the business for the speculator can measure his means pretty well at the outset, and takes care to keep his client informed so that he may persuade him to diminish his commitments if the times are not promising. The business is remunerative enough to make it worth while to run some risk, and as the client will have always something, at least, to meet his losses with, the broker is generally prepared for accidents. The speculator will, for his own sake, keep his misfortunes to himself, and so the new men come on, never knowing how many have gone irretrievably into the gulf before them until they have passed the fatal barrier of actual experience from which, in all but a very few cases, there are _vestigia nulla retrorsum_.

The chances are overwhelmingly against the class of speculator with whom we are now dealing, for the following reasons: He has no money, as a rule, worthy of the name of capital, and consequently if he is caught deep in by any of the thousand and one accidents that may burst like a thunder-clap on the top of the markets any hour of any day in the week, he is unable to “see it out,” as the saying goes. Not being able to take his stock off the market, the settling day occurs before a sufficient recovery takes place, and he is done for. Where there is an exposure to such a catastrophe, that may happen at any moment and sweep away the entire fund, it is obvious that the game is not worth the shadow of a candle-end, to say nothing of the substance. Yet this is the common condition of the haphazard speculator. He stands at the edge of a precipice knowing that a puff of wind will blow him over, and that it may come at any moment.

Supposing, for the sake of argument, we put such a possibility of accident out of the question, and imagine the haphazard speculator not to be exposed to the contingency of such a collapse, what do we find in the second rank of chances against him? In the first place his attention, as a rule, will be drawn to a stock by, we will say, its upward movement. He thinks to himself, “That stock has been getting up, why shouldn’t I have some of it?” and he buys, allured as are many others who wait to buy of those who have rigged the market up to a certain price, and then send the tip round to buy. The haphazard man thus assists probably the professional and systematic speculator to unload. He has got in at the top, and only sees his mistake by getting out at the bottom. Secondly, he very seldom pauses after having taken the decision to operate, owing to some special circumstance, to reflect upon the minor surroundings which are very necessary to keep in view. What are these? To buy on the eve of a settlement is a mistake, as a rule. In Stock Exchange speculation the exceptions are of the utmost importance, as for instance—When there has been a very sharp fall in the middle of an account, and it is known that the depression has been due to any considerable extent to bear operations, there will nearly always be a recovery on the eve of the account, caused by the bears taking their profits. The converse will also necessitate an operation of an exceptional nature, as when values have been driven up to a high point in an account by the bulls, to sell would be the line to take as the account approached, because the bulls might be reckoned on to take their profits in the same way. As a rule, however, prices tend to droop as the settlement approaches, owing to sales. The haphazard speculator is always very much discouraged when he has to pull up a loss, he should consequently avoid as much as possible incurring it. If he does not keep these important influences in mind, he will assuredly have to pay for the negligence.

[Sidenote: GREEDINESS INVOLVES LOSS.]

Then there is the fatal blunder made by almost every inexperienced speculator, of never being satisfied with a moderate profit. If he buys, and the price rises ½, he cannot make up his mind to take it, but must wait for ¾; when it has reached that he must have 1 per cent.; and when that rise has been attained to, he wants another ⅛ or ¼ to cover the commission. Like the dog, in attempting to grasp the shadow of his bone, he loses all. This is of daily occurrence in numerous instances, and is one of the fatal weaknesses bound up in the frailty of human nature, from which only the strongest and coolest temperaments are able to emancipate themselves. Speculators never set sufficient value upon the importance of avoiding a loss: they think only of the profits. As it is with our money affairs when we say, Look after the pence, the pounds will take care of themselves; so it is with speculators, look after the losses, the profits will take care of themselves. “Never refuse a profit,” is a golden motto for the speculator, which unhappily few of them in their greediness have the courage to adopt.

[Sidenote: KEEPING ONE’S OWN COUNSEL.]

In parting company, for the present, with the haphazard speculator, to whom we have yet more to say worthy of his attention, we would strongly recommend him if he finds it impossible to leave it alone altogether, _to keep his own counsel_. Do not listen to what other people have to recommend. People who are engaged in commerce in all its multifarious ramifications, care only for themselves, and for no other single soul; it is at all times consequently idle to put any other construction upon advice to buy a certain stock, tendered apparently, with the most benevolent motives, than that it is to serve directly, or indirectly, the purpose of him who recommends the purchase. In business every one is for himself, and, as the saying is, “the devil take the hindmost.” A man who takes to speculating, and has not enough stability of character to lay down certain principles for his guidance, to be rigidly adhered to as a rule, or is possessed of an excitable temperament, had better flee from the thought of engaging in so dangerous a vocation, for his ventures will assuredly result in the speedy dissipation of his inheritance, be it large or small.

NOTE.—I made, purposely, no comments on this very interesting and important chapter, and trust all the terms will be as readily understood by the New York speculator as by the London speculator.

H. W. R.