The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-03-19
WALL STREET PITFALLS.
TROS2 THO SET TdslI AND THOSE
WEO AIRS CAUGHT.


and Fazirs Who Deceive the Credu.
lous and the Way -hey DO Il.
CC1Dyri1-t'
NEW York, March lS-Wau street is
full Of pitfalls. Some men dig these Tor
Others to fall into Frequently the scheme
is unsuccessful; sometimes the diggers mis-
calculate aud are tripped in their own pito.
Then, again, great many people, with the
best intentions as 60 promoting their own
Interests, are at great pains net only to dig
deep holes, from which extraction is diff
cult, but also to slump into them with great
dezterity and dispatch when they are ready
for occupancy. These wlo dig for their
own ruin are more numerous than those
who dig for the ruin OF others, and, if pos
siois, they work with more elacrity and in
dustry.
The people who come into shat domain or
share vaIues and trafio known as Wall
street with the indictments necessary to dig
their own financial pits cannot well be
classified like so many styles OF soldiers OF
an army: but they differ in numerous re-
Rpects and their modes of operation are
various, and only alike in one particular.
which is that they are wrong, and being
wrong and acted upon in defiance Of fixed
laws they Guke lead TO disaster.
Quite proportion Of people who spec
ulste in shares base their orders to their
bankers on information, so called, that is
derived from spritualstic mediums l
do not wish 10 offend any believer in the
doctrine that the spirits OF departed men
and women hover about our planet, but l
may be allowed 10 express my opinion that
If they do they do not make 1t their bust
ness or pleasure 70 give POINTS on the
future of the stock market. This is only
an opinion. 1t is impossible to frame an
argument upon this topic, because all
controversy must he base upon adj
mitted principles, and when We come
to the topic of the existence and
doings OF de arted souls we are at a loss
for admitted principles. But we can all
stand upon facts, aud one fAct is that
people " no buy shares on spiritualistiC tips
rarely come out ahead. w hen they do it
is merely a chance. If the tips were really
sound they ought always to win. But they
often fail, and not only do the tips Of this
or that medium often FAIL but those Of all
mediums. And this Is not to be wondered
at, since first, mediums. as a rule. are COM
paratively lllterate and not skilled IN
finance, and are utterly out in the cold as to
the designs OF the leading operators of the
market; and, second, it Is a well-knOwn
habit of this class of advisors to change
their advice frequently, advising one IN
ing it a tolerably sure thing TO be right half
the time.
Il may happen that the medium really
believes he or she has a correct spiritual
message. | knew of the following instance:
A psrson began TO buy 500 and 1000 share
lots of stock that mad recently taken on
strange elacrity at sinking, on Der cent.
margins. As each margin wasted away he
bought fresh lots, until be had sunk $50, 900
and was obliged to quit from sheer ex-
baustiou. DURING this time the stock had
hardly ever realized at all. l said to him,
why do you bull this STOCK so persisteutly
when it fails all tue timer He replied, 81
have been advised by So-and-So Ia skillful
medium TO buy it and keep on buying, be-
cause it Is ultimately bound to rise. / paid
him a 1000 fee for his information, ana
I'm only sorry my capital isn't ample
enough to allow me 10 60 ON WhereupOn
he retired.
Next day 0Ir So-and-so came in and
lodged an order for l coo shares Of the same
stock on a stop order Of / per cent, inelud-
ing commission. He said; "The stock will
rally for long turn to-day; the spirits
have firmly assured me Of it. Here is q
check for the margin Ii was with great
pleasure that / saw the renorseless stock in
which the dups's fortune had been engulfed
swallow up the constituencies fee of the
humbug, who had not only persuaded him
TO invest in a losing game, but had also per-
sCeded himself into the same folly. The dis
embodied shades of George washington
Alexander Hamilton. Horace Greeley and
others showed bad judgment in bulliag q
stock which within few months utter this
occurrence was wholly wiped out by fore
closure.
One feels very little sympathy for people
who take tips from the ethereal deuizens Of
the atmosphere, whose communications TO
mankind emenate 20 psrtinaciously from
dingy and cabbage smelling fats on Third
and Sixth avenues. They can, as q rule
afford 20 fling away fees on humbugs for
the privilege Of losing a few thousand in
Wall street, but feeling OF regret cannot
always De repressed at the view OF the
broken-down merchants and small timid,
Empecunious spectators who frequent the
bucket shops, so called, in hope of gain.
These people do, indeed, dig their pitt
falls, since. so long as there exists a saloon
An New York where a stranger is allowed to
sit and read the papers at the price of a
glass Of beer, there is no excuse for holding
down chair in bucket shop.
The proprietor's game is, on the face, fair
enough; but the customer is so intent on
digging his own pit that he fails to calculate
abe factors of the game. The margin re-
quired is ! per cent and you paw one
eighth commission to come in and one
eighth to 60 out. Therefore when you lose
a dollar you lose a whole dollar; when YOU
win dollar you collect 70 cents The odds
of 100 TO IS are thus continuously against
the customer.
Again, the customer goes wholly on guess
work. II he were to toss copper as to
whether to buy or sell he might be right
something like half the time:
but If the odds are one
TO two that a stock will move in a given
direction, and also one TO two that O guesser
will guess right, the guesser starts in with
actual odds of four to one against him. The
bucket shop customer may not be familiar
with this feature Of calculus Of probabilities.
but the mathematical professors lay it
down, and Mr. Proctor mentions it in his
treatise on gambling, and the prosperity of
She bucket shops seems to bear 1t out as q
fixed truth.
In some of these by-ways of finance you
can buy one share. In others, where i've
shares are the smallest gamble, two, three
sometimes five small spectators will share in
a5-shaTe lot.
These facts are not stated as evidences Of
depravity nor as the basis for sneers at hon
es. and laboriOus poverty; they only tend
to show tuet where people are unable to dig
large holes TO bury themselves in they will
dig small ones.
Another pitfall on the regular stock mar
ket Is the small margin system. There are
Indeed advocates OF this system on the
ground thai where tie market goes against
you it Is better 10 lose or 2 per cent. than
8 CT 10. And where a Spectator is in