The Black Hills union and western stock review. [volume] (Rapid City, S.D.) 1904-19??, 1905-08-11
INSIDE WORKINGS
OF WALL STREET
Patience Is the One Great Vir-
tue That Is Needed in
Trading.
WHY DOEs"PUBLlc"L
It Cannot Be Denied That the Tender
foot Who Speculates in Stock on
the Street Loses More Free
quently Than He Gains.

Washington Star: hat the public
always loses money in Wall street is
one of the legendary aXioms: a state
ment so widely credited that it is an
old faVOrite of the professional joke
manufacturers, like the terrible moth
er-in-law. 1t has qualifications, as it
were, such as he belief that what the
lamb loses. his broker gains. the lat
ter's profit being in exact proportion to
the formers loss. or late. due perhaps
to the epidemic of frenZied financial
writing, an outsider might we'll grow to
believe that 1t is not the broker who
profits by the public's ignorance, but
the WOrld-famOus captains of finance.
all OF whom are pictured as BEASTS of
prey, actuated by the same motives,
pursuing the same end, gorging them
selves goldenly with the hard-earned
dollars of a %virtuous, but over-credited
public. "A moments reelection would
show all this TO be an abSurdly one
sided as most. generalitieS are apt to
be. 1t is an elastic phrase. that pub
be. AS a matter of fact it is not 50
much that the public loses enormously,
but that 1t fails to make as much as 1t
aught to. 1t is an elastic phrase, that
public" and it would b" interesting to
compile statistics showing the proper
ton of winnings to losses, if only it
were possible to compile such figures.
1t cannot be denied that the public, or
that part of it which ~speculates in
stocks, loses more frequently than it
gains. hat man people who fall UNI
der the category of public make Oft
ener than not, is also to be Sainsaid,
else so many others would not be try
Ing to do likewise. For one gambler
who goes to Mont Carlo firmly believ-
ing that he is going to break the bank,
Their are "A hundred who realize that the
chances are overwhelmingly against
them. And ordinarily sensible men
will play faro even though they know
the house will win oftener than not.
But if the public recognizes the fulfill
lty of trying to beat avowed games Of
chance it does not recognize UGH fulfill
lty in the Wall street game because as
a matter of fact stock speculation is
not a haphaZard affair nor exclusively
a sport in which the skill begotten of
experience and long practice con alone
take the trick. 1t requires no great eX-
%perience nor marvellous adriotness to
beat the stock market. All that is
needed is some money and some brains.
And because one Of the evidences OF the
possession of brains Is the possession
Of patience, perhaps what Is most lack
Ing in the majority of the stock-specu-
lating public Is patience. The street is
full of men who have made fortunes
out of the stock mark ct, men who are
neither brokers nor captains of finance,
but men who without exception have
been successful because they have had
patience.
In thsu emphasizing the value of pa
thence the conclusion is obvious hat
the average speculation is no a phil
osophilc gambler. The public is COM
posed of average spectators. 1t is
we'll therefore in considering the pub
lie. and the reason why it so often
loses one in Wall street to eliminate
the big men," who also lose none
and a great deal of it, oftener than peo-
pie imagine or Mr.. Lawson would have
his readers believe, and to exclude
similarly brokers. professional trad
ers" and investors. The public which
remains is largely composed therefore
of the victims of the game, the lambs
or suckers" or, as the late Frank Nor
. ris used to say. the great American
d fool. 1t includes all sorts OF
business-merchants, manufacturers
professional men young and old, of al
], religions and of no religion at all
They are much alike i nthat the con-
tributing causes of their infrequen'
winnings are the same. They are act
uated by one motive-to make money
, and to make it easily and quickly. L
before buying a stock you should ash
one of them If a profit of, say so pc
cent. on the capital invested in three
months would satisfy them they al
/ Noulu VI q VI 10 DAN 49, es
1t often happens, the profit came with
y, in a week, not more than one in tel
, would corral it. 1t is one of the effect
which the poison of gambling has OF
!, the average mind. 1t Warps the judg
ment. A'man puts up $1,000 and buy
one hundred shares of stock and tn
!, stock goes up two II a half points il
: a couple of days. 1t looks as If i
:, ought to rise more. The average ma
> does not sell out. There is 25 per cen,
in two dayse, or at the rate of Is pc
+. cent. a business week. If continued j
: would mean $500 per cent a year. Blu
: none of them wants to wait a year. A
' of them realize that to expect a p
= point rise a day for a whole year i
idiocy. But they also think 1t is idoc
= to take a profit whereby the capital ha
! been increased at the rate Of 12H pc
= cent. a day, because the market look
as If this good fortune had only begun
1t makes them "overstay" their mar
ket.
Primarily, of course, what holds goo
Y of failure in every line of business
a true Of stock speculations. Perhaps
: per cent. of the new commercial enter
y prises in this country fail and or sue
failure 95 per cent. are due to INSULT
cient capital and not to insufticier
brains. l nave asked every big opera
tor in this country what he though
s was the reason why outsiders failed
J. make money in Wall street, and ever
one was of the same mind-over-spec
> ulation. The public buys more than II
capital warrants. The average lam
e will buy. as much stock with his :none
!, as his broker will allow him. He doe
. not ask himself If the margin is enoug
d to protect him in case of an unexpecte
n catastrophe. What ne really ht
asked, though he may be unawar Of
is whether the margin will protect II
e broker. There is nothing wrong or In
b mortal or unwise about specializing {
# a margin. 1t is doing business part
on borrowed n and that Is
le businesslike that every business ms
y does 1t every day. But the smaller Il
margin of safety the greater the ris
!, OF course. This, however. is not a r.
VI Election that a man bent on makl1
y money in the twinkling of an eye
a. apt to make himself with any degree
calmness.
he In speaking OF the stock-gamblii
k, public as buying stocks one speaks
the usual operation. The average ma
81 ,>.yI ,otAa,. raoSor that tho aVara,