Profitable Stock Exchange Investments

Part 1

Transcriber's Note: Minor typographical errors have been corrected without note. Irregularities and inconsistencies in the text have been retained as printed. Words printed in italics are noted with underscores: italics. The cover of this ebook was created by the transcriber and is hereby placed in the public domain.

Profitable Stock Exchange Investments

PRINCIPAL AND INTEREST GUARANTEED

Henry Voorce Brandenburg & Co. (INCORPORATED) BANKERS 6 WALL STREET, NEW YORK, N.Y.

Copyrighted 1901 Henry Voorce Brandenburg & Co.

PREFACE

This book is published to show the absurdity of trying to make money speculating in Wall Street without adequate capital and the ease with which it can be made with capital and proper methods.

The following pages open to the public a safe, conservative, and highly remunerative channel for the investment of their surplus funds, which does not have the element of risk and uncertainty that exists in general business.

PROFITABLE STOCK EXCHANGE INVESTMENTS

You read a great deal about the money lost in Wall Street.

As a matter of fact there isn't any money lost in Wall Street.

It simply changes hands.

People talk loosely about gamblers and speculators losing all their money in the end.

If money is lost, somebody has got to win it.

The people who go plunging around in Wall Street making all sorts of speculations on margin naturally lose their money. They ought to expect to lose it, and they ought to lose it whether they expect to or not. They are simply gambling with all the odds against them.

Meanwhile, the wise and shrewd operators follow prudent, business-like methods and get the money.

The Vanderbilts, Goulds and Morgans of Wall Street are sometimes described as robbers waiting in their dens to slaughter the poor innocents who venture within reach. That is all nonsense. They win because they know how to play the game, and others who have sense enough and patience enough to play the game in the same way will win too. They absolutely cannot help winning.

The purpose of this book is to inform the reader fully as to the methods by which money can be taken out of Wall Street--the methods used by the successful operators of the past twenty years to our knowledge--the methods which positively must win year in and year out.

We purpose to give the public an opportunity to make a safe and profitable investment in Wall Street, and have their money handled for them according to correct and profitable methods.

The men who win in Wall Street are those who invest in stocks--good, dividend-paying stocks, buying them when they are low, selling them when they are high.

This is not gambling nor speculation any more than any legitimate business is gambling or speculation.

In all classes of business we buy at a certain price, and sell at a higher price.

We buy under the most advantageous circumstances possible, paying the least possible price and selling at the highest market price.

This is what we are doing in Wall Street, and as we handle only the stocks of sound and stable corporations, the security behind our operations will be the strongest in the world.

The gist of the matter is that the stocks of the leading and most stable corporations of the country are tossed about in Wall Street from speculator to speculator, going up and down constantly and varying enormously in the prices at which they are bought and sold.

These changes in prices are nearly always due to a feverish and excited market. The stocks themselves do not actually vary in real value. They are worth a certain sum all the time. They are paying dividends on that sum and the stocks at their real value are always a good investment. Yet by the manipulations of the speculators and on account of the exigencies of these Wall Street marginal gamblers such stocks can be bought at times at a fraction of their value, and by reason of the same causes can be sold at other times for far more than they are really worth.

The men who make the money in Wall Street are those who know what stocks are really worth and who buy when prices, go down and sell when they go up, buying and selling the same stocks over and over again, and making a handsome profit on every transaction. They do not care how low a stock they hold goes for the reason that the stock belongs to them, they know what it is actually worth as a dividend payer, and in the skyrocket performances of the speculators of the Street they take no interest except as it gives them opportunities to buy and sell. They do not care how high a stock goes; they have no shortages to cover, but can simply sit back and sell as much of their holdings as they choose whenever they see an opportunity to make a big turn.

Such men will turn a block of stock in a given corporation over and over dozens of times in the course of a year, making so much money on it that even if the stock should disappear off the face of the earth altogether, they would still be far ahead on it, simply on account of the numerous advances and declines.

Part 2

By owning stocks in a large number of good, sound corporations, they will average to make a certain sum of money every day in the year. They spread their invested capital over a wide field in this manner, and the laws of average make them sure gainers at every stage of their operations.

This is, as you will observe, very similar to the principles upon which the great life insurance companies are managed.

Many of these commenced business starting with but a few thousand dollars, and they now have assets of millions. They have piled up this enormous wealth by insuring the lives of human beings.

Every company which has not succeeded has failed because it did not issue a certain number of policies.

The secret of success is the large number of risks reducing the chance to a minimum.

No life insurance company could succeed if it insured but a few lives.

By the law of average, insurance companies can tell just how many of the people they insure will die each year.

When you make an application for life insurance the first question they will ask is your age, and by referring to their tables they can tell you the month and day when you will die. Now, you may not actually die upon that day, but you do theoretically, and the point is that they have so many risks that the law of average, always prevailing, in the end brings everything out just as figured.

The fact that one person lives longer than the date when his life should end is offset by the fact that another person dies sooner than expected, and thus the law of average is absolutely maintained.

The postal authorities could not come anywhere near telling how many letters would be mailed in the City of New York on a certain day, but they can come with remarkable closeness to the average for a year in advance, and predict with certainty how many people will write letters and forget to address them during that time.

It is by the working out by the law of average as best exemplified by the insurance business that it is possible to work out a plan by which Wall Street stocks can be dealt in with absolute safety and certain profit.

Of course, no man or company could purchase one hundred shares of stock without the risk of a loss. That is to say, no man should make a purchase of this kind unless he is in a position to buy again and again many times over and still hold all that he has previously purchased.

Buying a certain quantity of stock in one corporation is very much like an insurance company insuring the life of one man. But when you buy thousands of shares of stock in various corporations, some stocks going up and some going down, the law of average is an absolute protection and the statistics of stock fluctuations for the past twenty-five years show beyond the possibility of doubt that this is true.

The fluctuations in the prices of good, dividend paying stocks are something remarkable. Some active stocks show a fluctuation of five thousand times their value in a year, thus offering a continual opportunity for money making.

These are the stocks which are constantly speculated upon, the stocks on which so much money is lost and upon which the cool headed and careful operators make so much.

The Western Union Telegraph Company's shares have always paid 5% dividend, and the average market price has been about 90, making the income about 5-1/2. Now, suppose it is purchased in ten-share blocks on every one per cent. decline and none sold above the average price, it will show an income of more than 43% per annum, besides some dividends.

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