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

enjoyed fine health during ten, twenty,
thirty years. Some day you read his
obituary notice in the paper Conditions
change and destinies with them. The
average system" as a system is hardly
to be considered by any reasonable or
prudent man.
Then there is the system of buying a
stock when it has gone down to point
which it never reached before, or of sell
ing when 1t has reached an unprecedent-
ed height. There are not so many
weighty objections to this plan; but OPP
portunities to practice 1t do not often
occur: and even when stock that has
never fallen below so falls to 40, special
causes may be at work that shall drive
it down to 20 or even anuihilate it; and if
it rises tola point never reached before,
that may be only stepping stone to a
further rise. Even this comparatively
reasonable system, to avail of which you
may await the moving of the waters"
during entire years, is not absolutely
safe. In this system also turks what the
mathematicians style the "indeterminate
co-etficient."
Some ingenius operators have fancy
for dealing against insurance by puts
and calls" as source of profit and a
protection against loss. In almost any
state OF the market a capitalist will sell
you the privilege of delivering him a few
stocks at a lower, or of calling on him for
a stock at a higher, price than the market
price of the day. Taking the A. b. rail
road shares Eat 80, you may deliver him,
that is, put to him. 100 shares within
sixty days at So; or, you may call on him
for 100 shares within sixty days OF 95
You pay your money, 500, 5000,
$500, more or less as the case may be, and
you take your choice. Having bought the
put" let us say you proceed to use II as
an insurance against loss by buying 100
shares in the markeG:at So
The stock will either stay at 80 or rise
or fall, If it rises you sell and reap a
profit if it falls, you lose on your pur-
chase, but you approach the point where
your put may become profitable. But if
you have bought real stock at 80 and hold
onto it, and the shares fall TO 80; and you
yut the stock to the capitalists at 49, you
certainly make two hundred dollars which
is probably about what you paid him for
the privilege, and you have lost Cat least
on paper) seven hundred dollars on your
real purchase. Many people might in
quire where the benefits Of the put and
call'' insurance come in. l answer, as
the Jersey schoolmaster was wont to an
swer pupils whose questions sank the
plummet into too deep waters for him to
follow it, This IS question of your own
askingl"
The capitalist who sells the privilege
presumably has better forecast of the
market than you have He sells his wis
dom at a profit; you buy the 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 b ten times
over at 80 and sell it at profit each
time; but you could have done the same
without put; and vice versa. You
have, however, the satisfaction of know
ing that if the stock falls, you cannot lose
beyond certain definite amount, pro
vided you market your purchase, that is,
your l00-share lot, at the same time that
you avail of your put to the capitalist.
But you could have limited your loss just
as well and much more cheaply by order
ing your purchase to be sold at def
mite point of drop-say or 2per cent.
The put and call system does not ex-
empt the operator from any of the vicis-
STUDIES of the market, however attractive
it may be to person to buy chances of
an experienced capitalist who makes it
his business to sell chances as a means of
profit. The capitalist sets up the goods
in his shop window for his own benefit
and you need to be 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 al
ways good property to be had if you have
the means to buy it, and when in times of
money scarcity the man with money
comes into the market and buys dividend
paying securities of long standing and Sc
cure foundation, from people who are
obliged to sell to meet necessities, he is
pretty sure to buy what he can sell at a
later day at liberal profit. And
whether he buys outright for cash or on
full and adequate margin, the principal
is the same, except that as to margin pur-
chases the yield of profits is at greater
ratio to the amount invested than on pur-
chases outright.
There is another form of insurance,
sometimes styled system, that is not
without its advantages to person who
is not fully informed as to the actual
prospects of a stock, and yet fancies it is
a trading venture. This consists in tax
ing both sides of the market at the same
price, and calmly awaiting developments
Suppose as before a stock at 90 You
buy and sell hundred shares at so. The
price falls to So. So long as you retain
both ventures you have neither made nor
lost. On inquiry and mature considera-
ton you believe that the drop has about
reached it's limit, and you conclude to
take in the sale at profit of $780, You
have now $500 profit in cash and $500
loss on paper. But feeling tolerably safe
as to the real value of the stock you de-
post your cash profit as a further margin
on the purchase or long stock After
some hesitations around the So point
the stock climbs up to 81 or IS, and you
conclude to close the deal having made
perhaps net profit of $500 or $500 on a
transaction that was comparatively q
safe one.
This method OF insurance is best adap-
ted to dealers in limited amounts, who
cannot watch the ticker ali the time, and
depend upon the stock market only for
occasional windfalls of profit. 1t is a close
second to a sure thing, the latter being
most difficult article to find. The best
system, of course, and almost the only
system that is at all certain is based upon
an accurate knowledge of what the board
of directors of corportion intend to do
at the next meeting But how few can
get such information Those who get it
are not apt to impart it; nor can you base
your action upon what they tell you; nor
can you easily ascertain what they are
doing. since for each hundred shares they
sell they may buy 81 thousand or vice
versa. And as for the "tips" that float
around the street when YOU show me
man who has got rich by acting on them,
/ will show you the wild ass whom the
scripture depicts to US as shutting UP the
east wind with view to Harding his lean
ribs with the same
All systems of money making depending
on fluctuations of price should be looked
at thpOuub the cOmuoIlud lens Of this