Part 2

“The upward pace of the stock market leads one to believe that the financial district is up to its old trick of discounting in advance the recovery of business from the trough it now finds itself in. To the observation that it is going too fast, one can only agree, and add: ‘It always does.’”

The old split-up, consolidation and stock-dividend chestnuts are being industriously warmed over and the few scattering traders who saved something out of the recent smash are beginning to nibble at the bait. All of which shows that people are quick to forget their stock market troubles and to return for more punishment. I make this observation in the light of many painful recollections of earlier days.

The grist of stocks issued in the recent past is almost incalculable. There are now six industrial companies with an aggregate capital of 171,927,540 shares outstanding; and from the side lines it looks as if there ought to be time enough to start another boom when the stock market gets over its present case of indigestion.

In the final analysis the following essentials should be constantly borne in mind: The stock and grain markets are always capable of playing new tricks on you--of doing things you never dreamed of. Who, for example, could have imagined that with a world shortage of wheat, that staple commodity would be selling in February at considerably under ninety cents a bushel--nearly as low as corn!

Another important thing always to remember is, not to buy more stocks than you can pay for, or margin far below the lowest point you think they can possibly reach. The extra profits to be derived from over-trading are scarcely ever worth the risk incurred.

To sum up the whole situation in a word, those who would make money speculating in the stock market should first understand that it requires as much caution and business acumen as any other money-making enterprise, plus some knowledge of the psychological handicaps; also plus the rare faculty of maintaining a complete mastery over one’s impulses, emotions and ambitions under the most heroic tests of human endurance. All speculations, and even the most conservative investments, have at least some slight element of risk; all lines of business are more or less a gamble; marriage is a gamble; political preferment is a gamble; in fact nearly everything in life, including our very existence, is an uncertainty; yet people are not thereby discouraged from entering into any and all of these ventures. Those who look only for certainties have far to search and little to find in this world.

* * * * *

Transcriber’s Notes:

Variations in spelling and hyphenation were retained as they appear in the original publication, except that obvious typographical errors have been corrected.

The following change was made:

p. 14: be inserted (to be the)