The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-07-30

have natural taste for systems. Once
learned it is easier to practice them than
TO be constantly seeking new paths. And
If found to be safe and profitable, the
sense of security is an additional pleas
ure. 1t Is like sailing over a guaranteed
smooth sea before a guaranteed wind.
The difficulty consists, in getting fault
less systems, just as sailors experience
difficulty in getting guaranteed waves
and wins.
Quite often, however, people meet you
and labor to impress upon your attention
the aptness and benefit of certain sys-
TENS of operating in the stock market,
which reduce risks to minimum and
confer large profits. Sometimes such
plans are advertised in the financial an
pouncements Of the daily papers; by
which to quote them accurately, "profits
are rendered certain, and losses impossi-
BILE" The discoveries of these panaceas
against poverty, these varieties of perpet-
uaI motion on the upgrade of fortune,
generously offer to let you work their
systems on half profits, you, of
might say, "If your rules are
so absolutely sound, why should
you give away to the public one
half of their advantages9 People with
plums do not as rule go out into the
highways and insist on sharing with the
ueedyV And If the discOverer of these
golden secrets pleads want of capital, one
might remind him that it would be more
profitable to borrow at thirty per cent
month than to give away fifty per cent a
week in profits or even fifty per cent.
month if the system requires that length
of time to ripen its fruit. Whatever ex-
cuses the ingenious artificer of systems
may have for not turning the crank him
self the bottom reason IS pretty sure to
be that which actuated the fox to advise
all other foxes in congress assembled, to
have their tails skillfully cut off. No
matter how wise or learned men become
even in the 10Th century, there is always
some good lesson to be picked up in the
Fables of H1sop.
Every alleged safe stock-dealing system
is built up on laws, but although foun-
dation may be ever so good, if the under
pinning of the structure is defective, its
flaws will certainly cause the house to
tumble. And when a set of laws is used
as a basis, and another set of laws whose
operations are hostile and destructive to
former is ignored, there is sure to be dis
aster. Nearly all systems of stock deal
ing disregard the laws of expense as
working in interest and commissions con-
tinually against the operator; the fact
beingthat these are the most important
enemies of profits and never desist from
work.
Here is a neat system, frequently ad-
vocated, based on the law that losses
should be curtailed at the outset and pro
fits nursed to their fullest growth. Sell
out invariably when your purchase drops
one point; and hold on in event of rise
until at least five points have been
reached. Then, since the chances of fall
ing and rising are about the same you will
lose one dollar and win five, which is a
clear gain Of four. And even if you lose
three times where you win once, you still
make money, and this is what you are
trying to do. And you limit your losses,
which is a great advantage.
This last clause is the one good feature
of the system. In other respects it has
no merits, as any one will discover who
tries it. 1t depends for it's value upon the
truth of a supposed fact that the chances
OF rise and fall in any given stock are
about equal. Such a supposition might
be entertained by an inmate of an insane
retreat, but a thinking man has no use
for it. No matter what the stock may be,
there are at any given time an indefinite,
might say infinite, number of forces at
work either to depress or elevate it's
price; or with greater accuracy working
IN unequal factors both to depress and
elevate. During certain periods one of
these factors will be stronger than the
other; and, of course, eventually the
balance will be shifted but no man can
say when that event will occur.
Now on this system a person buys
hundred shares of stock at, let us say, 80.
1t drops at once to 80. He sells, and loses
$40. Then being at 80, it has substan-
liaIly the same chances of rise or fall
mat 1t had before. Suppose it rallies to
w. our systematic friend has had his loss
Tor nothing, and there is absolutely not
one grain of consolation in his loss except
mat he has adhered to his system.
But suppose the stock falls to 49, Then
ne mas the satisfaction of having saved
SlOO II he buys in again. On his system
ne does buy in again, and the stock drops
I.oIs 81 Tie sells out and once more loses
for it.
r, Or, suppose that having purchased at
% Inc stock rallies to 80 or even go His
system torbids him to sell out at less than
90 90 ana even if he violates it and sells at
~, ne makes only $50. His first loss was
gro and his gain is only SITS; each hun
urea shares being saddled with E25 COM
MISSIONS, and in addition he has departed
rom MS system, and it may be that he is
punished punished for it by seeing the stock mount
"Ithln week to 90.
but the short distance which we trav-
VIC pdGll VI bulS SySUGlu SHOWS
no" ulusory it is. Forces may be at
STork' able to drive the price steadily
ooWn day by day from 80 to 20 or 60; and
ouu II IL requires thirty days to do this,
1 tU system follower may lose a 800 thirty
.ttues over and S25 commission thirty
enHeS over and thus find himself at the
Nv nv punt without any stock, and out of
80 pUgAeb 500. If he held on to his original
~ ~ Qdse by investing 50 900, he would
IGnS oe S3,O25 out of pocket, and would
bpnn55 Ihe possession Of the equity in a
INJURED shares besides.
10 ouch changes as that stocks should fall
syo thirds of any prevalent quotatio
s,a, 1oV unknown; they are hardly unu-
CO co ana they need not develop such
sffpocIIles for sinking in order to demon
bss%eyJS Ihe tallacy of any system that is
rec 3Ut upon the supposition that there is a
tio, - recurrence of short time oscilla-
st C.,S oI values. There is no regularity in
ui9 Tn exchange prices. is there any reg
WY WY OF waves on the ocean} All the
rim, rs Is an the time seeking an equilib-
alta, t ouI what peculiar modes it has for
hin, nlnlg IL! We have calm seas, chop
All seas' strong and still stronger swells,
inc r 10y, ana then mighty and overwhelm-
ana 33itIges, that rear up into mountains
no s Jtii5Close fr1ghtful ahysses, into which
"aoI,iiip can venture and live The
ch5 igdtIo ,rlum of valuesn on the stock ex-
sidrroSS Is as fatal to the system just con-
Of ~ as the 'hydrostatic equilibrium"
H. lIantic would be to a rowboat.
rete is anOthar very nrettr ex,etan, IT