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

~ hicl4 IL never ~ xshesl before. or Of srlt-
ing when u hss reached "a unfHeee-
aented hslyh. There are n,ot - nzany
wesvhsy Oh ieets0as &c this plaza. bat ep-
portunislss ~ practice II do not ofiea
o<eer. and even ~hen stsek that has
nsser fAli<n below atty falls ~ forty.
special ceases may bs AZ work ts4aE
shall drive ~ down 90 t~sats " evrs
sna'hilzte IL; aaa II IL rises Is a POINT
never reached L<for~ that mas De only
q stayrtnx stone ~ = further riss
Even this comparatively reasonable
system. % avail Of whicA Foa may
await the moving Of the waters" dur
ing entire years. Is not absolute ~ safe-
In this svs,em also ingk what the
rlsthsmaticians style the ''iadeternia-
ale soefficlept'
Some Ingenious operators nave
fancy for dealing against insursnes ~
puts aud Calls" g. = source of pront
and protection against is,ss- In al
most any state ofthe market = capital
ist will sell you the privilege OF deiiv-
ering hina few stocks ut . l,wsr. or
OF calling on him for "a stock at . high
or price than tho market price OF the
day. Taking the A. H. railroad shares
a -. you may deliver him. that il.
put To him.. 100 shares within sixty
days IT IS; or you may call ON him for
100 shares within sixty days ~ 10. You
pay your money. ono hundred dollars.
two. three hundred. more or less as the
case may be. and you take your choice
Having bought the put" let us say
you proceed to use IL ~ an Insurance
against loss by buying .. hundred
shares In the market NJ W.
The stock will either stay at 90 or
rise or fall II il rises you sell
and reap profit; IL il falls. you lose
on your purchase. but you approach
point where your put may become
profitable. But II you have bought
real stock at 90 and hold onto IL. and
the shares fall To 81. and you put tie
stock 10 tho capitalists at IS. you GER
tainiy make two hundred dollars.
which is probably about what you paid
him for the privilege, and you have
lost lat least on papcr) seven hundred
dollars on your real purchase. Many
people might inquire where the benc-
Ats Of the put and cali" insurance
come in. I answer. "a the Jersey
schoolmastcr was wont To answer pu-
pills whose questions sank the plumnet
into too deep waters for him 70 follow
II: This Is question OF your own
asiingl'
The capitalist who sells the priv
lege presumably has better forecast
of the market than you have. He sells
his wisdom at = profit: you buy tho
fruitage of him. and he gets the better
OF you at the start. Then the market
Is before you with all its chances
With your put In your pocket, You
may buy A ID ten times over at 90 and
sell I. at y profit each time; but you
could have done the same without .
put, and vice versa. You have how
ever the satisfaction of knowing that
IL the stock falls you cannot losc be-
yond certain definite amount pro-
vided you market your purchase, that
Is your 100 share lot, at the Same time
that you avail Of your put to the capt.
talist. But you could have limited
your loss just as well and much more
cheaply by ordering your purchase TO
be sold at definite point Of drop, say
one or two per cent.
The put and call system does not
exempt tho operator from any of the
vicissitudes of the market. however
attractive IL may he 10 person to buy
chances of an experienced capitalist
who makes IL his business to sell
chances as means of profit. Tho
capitalist sets up the goods in his shop
window for his own benefit: and you
need To DO exceedingly sagacious or
exceedingly lucky to beat him on his
own terms.
Shall we then say there is no safety
In Wall street? By no means. There
is always good property TO be had il
you have the means 10 buy IL, and
when i'm times of money scarcity the
man with money comes into the
market and buys dividend-playing So
ourrsics of long standing, snd secure
foundation, from people who are
Obliged To sell 90 meet necessities, he
Is pretty sure ~ buy what he can sell
at latter day at liberal profit And
whether he buys outright for cash or
on n full and adequate margin. the
principle IL the same: except that a. to
margin purchases the yield Of profits
Is at greater ratio 10 the amount in
vested than on purchases outright
All systems OF money making de-
pending on fluctuations of price should
be looked at through the compound
lens OF this truth. that wherever there
j. chance Of gain there il also a
chance Of loss. Loss and gain are only
opposite ends OF the same rope. They
are the Same accounthead In every
ledger. and are N inseparsbly united
a. the Siamese twins. This law is In
cxorablc. absolute and operates all the
time. TIE attempt To- override n by tho
aid Of systems 81 whatever nature In
irrational. And the only eulogy 20 be
bestowed on systems. as applied TO
financial hazards. ia that some are not
a. Irrational IA others.
iiIsRY CLgwa