Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-09-14
RISKS MUST BE RUN
In All Stock Speculation, if Success
Is to Be Expected.
THE DANGERS OF BLIND CHANCE
To Reckless and Ignorant Operators Are
Soon Experienced.
REAL CAPITAL is WHAT is NECESSARY
ESPECIAL, TELEGRAM TO THE DISPATCH. !


reviews the financial and speculative situs-
ton for tomorrow San as follows:
There is no disputing the fact that the
mass of operators and brokers on the Stock
Exchange have made up their minds that
the recent advance in stocks is going TO be
main tanned, and that prices are bound to go
much higher than they are now. Still, they
have their misgiving, which shows itself in
their impatience with the expression of a
contrary view Even much mild suggestions
of a possible disappointment of their eX-
pectations have been received with some
thing very much like anger, and only this
last week have been twitted by more than
one of my friends with what they are
pleased to call the failure of my prophecies,
weeks ago, in regard TO the market.
Considering the pains l always take to
express my opinions modestly, and to give
the grounds for them, that my readers
NAV be able to estimate their value for
themselves. l think it is very unkind to
poke fun at me when events do not cor
roborate my Judgment.
LESS GROUND FOR JOKING.
In the present case there is less ground
than in any other. for making merry at my
expense, since my force SITS have been con-
fined to saying that there was an overstock
of new securities sale, which would
probably have to be reduced in price to
attract purchasers. and to doubling the i'm
mediate realization of the good results
almost universally expected from our
abundant harvests, in the shape of copiouS
arrivals of gold and OF large orders from
Europe for the purchase OF our securities.
4 little gold, it is true, has arrived, or is on
its way and it is asserted that London
operators are buying our stocks and bonds,
but for the last few days halt has occurred
in the upward movement and the entire
list Of speculative fancies closed on Satur-
day at Il marked decline from the highest
point Of the week. 1t is too soon, therefore,
to say that my Judgment was entirely wrong,
and it may yet prove to have been substan-
TALLY correct
no BOLD SPECULATION.
The feature of the present situation which
strikes me as more noteworthy than the
scattering advances of particular stocks, is
the absence Of any prominent and trusted
leader of speculation for a rise. Conse-
uuentlv operators are acting each for him
self, and with the timidity and hesitation
which mark the individual who does not
feel the encouragement of a crowd. Few
men have confidence enough in their own
Judgment to buy or TO sell upon that judg
ment alone. They want somebody to tell
them to do this or to do that. and as soon as
they have done it they want that somebody
TO tell them whether to undo it or to let
it alone. They find it easy enough to buy,
but then. if what they have bought does not
go up in price and thus confirm their good
opinion of it, and particularly II 1t falls ever
so little, they become nervous and discour-
aged.
a bold, self-reliant man, therefore, who
will ta Ike rold of stocks courageously, and
not hesitate to advise everybody to do the
same as he does. and who will hold the mar
ket up by main strength for a few days, may,
in circumstances like the present, conf
IDENTIFY reckon upon securing following
which will carry prices up and up, until on
the momentum thus acquired he Can sell out
and leave his following to take care of
themselves.
HIS PROFITS ARE SURE.
Of course, as soon as they discover that he
has deserted them they become panic
stricken and tumble out their purchases as
recklessly as they bought them, but in the
meantime the market has had its boom and
the manipulation of the boom has gathered
in his profits. ] have seen no indications of
any such performance lately, and for that
reason 7 do not believe that the recent rise
is going TO develop Immediately to wild
rush.
Indeed, | rather think that pretty much
everybody who was disposed to buy stocks
for 4 rise has already bought all he can, and
is now waiting for other buyers TO come in
and take his purchases of his hands. There
is n story of a schoolmaster in German vii
lage who persuaded all the people in it to
follow him to the top of a high hill one night
when the moon was shining brightly in the
heavens for the purpose of all shouting to-
gether, and thus making the man in the
moon hear them and shout back. He gave
the signal for the united outcrY, but to his
disgust t was followed by absolute silence.
Every one of the crowd had listened to hear
his neighbors shout, and no one uttered a
sound himself
Possibly the crowd who have lately been
buying stocks in Wall street may, like the
German villagers, be waiuing to hear from
their neighborS, and thus there will be quiet
where lively excitement has been expected.
REAL CAPITAL NEEDED.
brought about by gambling purchases and
sales, nothing can obliterate the everlasting
truth that a healthy and permanent advance
in financial securities can be produced only
BY surplus of real capital seeking invest |
ment, just as permanent depression is
caused only by n deficiency of such capital |
1t Is an equally lncontroNertlDle truth that
the market price of q security will in |
cvitably be decided in the long run by the |
amount and the certainty of the income it
Yields.
1t is the investor who ultimately fixes the |
value of an investment, while the speculator
who seeks TO anticipate his Judgment by |
buying or selling on the hazards of an I'M |
known future does so at the peril of falling |
to secure the approval of the investors |
Judgment at the last. Many men have been |
sagaciOu5 enough or lucky enough to buy at |
low prices apparently worthless securities, |
which have subsequently proved TO be valu- |
able as interest or dividend payers, but |
until the event confirmed their good opin- |
ion, they were at best only sklllful specu- |
latOrs.
AS to the mass who buy and sell as the |
whim takes them, or because they are told |
by other people to buy or to sell, they might |
better stake their money cards or dice. |
The operation would be much more quickly |
performed, and with less cost for commits |
sions and interest.
SPECULATING ON RISK.
Now it is possible, for example, for an out |
slider, not familiar with the railroad bust |
ness in general and with the business of |
each railroad IN particular, to Judge fntelli- |
gently OF the value of Atchison, or Erie or |
Union Pacific stock. He may say that the |
earnings of these companies, owing to the
good crops, are likely to be very large the
next few months, but suppose they are The
crops next year may be as bad as they were
last year and what then? Unless the advo-