Grand Rapids herald. [volume] (Grand Rapids, Mich.) 1892-1959, 1893-07-30


ana ssl.s "a ~, be nsk.s oniy Efsy dol
l4~< Has arss los ~ss ore hundred
as~s t~snsy-l3vs. and his gain ls only .
hnRared snd ssssnsy Ave. each Aaa-
irsd shAres being sAa1ie<i with twenty
i<= aolLSxs eomnliszs<,n2- al.z IA adj
lion ne hss Departed from hs system.
aad "a nay - rSs hs " punissed fsTis
by se~sax The ktosk neaEt wishta .
week tSssa
Travelled On th< path % th.s system
sao~s hssw illnsosy IL - I.sree laAy
Be Al work asls - drive the price
steadily dsxn day by day fivsn 30 a.
10 or g.. AID II IL requires tairty days
"a 50 this. our System foit,~sF may
l,es = hundred dollars thirty times
ever aud twenty-five dollars commits
.ion talrty tlnlss over. and thus dRd
binsslf a. the % point without any
stock. and ou, a pocket three thousand
saf hsty soilSr< II he hsla GA ~ his
srigiual purchase By investing taree
taoasaa4 dollars. he would oaly be
three thousand an4 twenty-five dollars
oat Of pocket and would have the pos-
session ~ the equity Ia . hundred
shares besides
Such changes a. that stocks should
tall ~ s~o-shirds Of any prevalent
auotstiou are not aEknown; they are
hardly snasnai. And they need not
develop saeh capacities for sinking In
order TO demonstrate the failscy of
any system that IL based upon the sup
poaitson tAss there In regular recur-
rcrsce Of ahort time oscillations of val
ues There h NO regularity In stock
exchange prices Il there any regu-
larisy Of wsvcs ON the ocean? All the
water l. ell tn. time seeking an equi-
librium. but what peculiar modes ii
has for staining IL! We have calm
seas. chopping seas. strong and still
stronger swolls. and now and then
mighty and overwhelming surweA that
rear up into mountains and dNclose
frightfsi abys<cs into which no ship
can venture and live The ''equilib-
rum of values on the stock exchange
Is a. fatal To the system jus, consid-
cred - the "hydrostatic equilibrium"
Of the Atlantic would be 10 a rowbost
Another neat systcm Is known a. the
Pyramid" and II about as follows:
You bay hundred shares at %. and
deposit nve hundred dollars ms~gin.
Tho sscck goes ~ -. You have now
Ave hundred dollars paper profit. Do
you take IL In eash7 No. but you buy
another hundred at ss. depositing tive
hundred dollars moro with orders to
your broker TO sell the two huadred
shares ~ the arst drop Of one per cent
IL the stock drops To % you sell out.
and take . profit OF four hundred dol
lars less commissions and interests
But let us follow mp the "Pyremd."
The stock rises To ono hundred. you
have fifteen hundred dollars paper
profit You then buy another hundred
shares; still under the same order To
sell IL drop Of ono per cent occurs.
II rises 70 los and you have three thou
sand dollars profit on your three pur-
chas~s. Your pyramid now becomes
sruncsted by drop Of one per
cent aud you retire with net cash
profit Of twenty-seven hundred dollars.
less interest and submission.
II will be seen that this il beauti-
ful system II IL works But IL doesn't
always work For instance. stocks
do not always rise when you
buy them Thus at the outset your
pyramid may be q hole in the ground,
and not pyramid 1T all. But IL 10
rises shapcly aud strong up to and be-
yond the 6rst tier OF masonry where
yos have q paper profit of $500 and
you buy another hundred. thus laying
the second tier. and drop comes.
this drop may not be single one per-
cent. Stocks sometimes drop five per
cent before y broker-even OF the most
active type-can market them Then
the pyraaAid suffers a shock like that
given by al earthquake. Having risen
like an sxhalation." IL disappears "a
quickly as Aladiin's palace when car
ried OF 10y the Genii Of the Lamp.
As q matter OF fnct pyramids some
rmes succeed and sometimes they
don't But IL is the nature and essence
OF system, without which so-called
system il not a system at all. that 10
shall always succeed, ca AZ least almost
We W AtS1tfa oh
the certainty that they viii ignite
when rubbed. locomotives on the Ger
ts.nty that they viii move along when
frrd mp. Bu, II pyramid can some
times &c built and sometimes not, tho
chances being more negative than pos
tive. 1t IL certainly forbidding and
unattract,ve Investment That pyra-
Eaid should D. worth anything demands
the condition precedent that a stock
should steadily rise a certain NUM-
Der Of points. say fifteen.
Another systcrn il that of the aver
ages. Nearly every stock that Is dealt
IN on the stock exchange has a history
running through . series ~ years.
made mp Of daily sales. and The average
price of any stock Is therefore mat
ter OF exact calculation. that -, its
pas, average price. The follower Of
the average system" takes a. Tho
ba-is 81 his operations the s,ippossition
that the average that i - be viii cor
respond wisa that which has been.
which might ~ a FAIR superstition in
regard 20 temperature IL anT given
latitude ih a settled country. bat
~hsrh j. cvSlently nnsound when sp-
piled - thu -slncs Of property a. 10