The independent., 1907-04-25
Why the Small Investor Loses
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out sharing profits beyond that ex-
tent"
There is a deal of philosophy i'm this
bankers statement. A coterie of busi-
ness men who take a flyer" as they
call it, can generally afford to lose, and
generally do.
Out of all this let us deduce q rule
Try to invest your money with sue
cessful business men In the business
inwhich they have succeeded.
In reading newspaper advertisement
of stocks. do SO always with a skepti-
cal spirit, just as you would regard a
strange individual who would cali at
your house claiming to be able to sell
something at less than its real value
II you see something in the advertise
ment which tempts you to invest, you
will, unless you are q fool, Investigate
the advertised proposition as you would
the proposition made by stranger
These are some Of the proper questions
upon which your mind should be made
clear: Vino are you, who offer the
stock? AS you ask me to regard your
rescntations as trustworthy, refer me
TO those OF whom I know, who will
vouch for your character and trust
Worthiness. AS you are offering me
stock In company, please tell me in
percentages how the stock Is allotted
What per cent of the total stock has
gone 10 the people who formerly owned
the property bought by the corpora
ton? What per cent Of the stock ren-
resents goodwill? What per cent Of
the stock is sold for cash like that you
propose to sci. me? To whom does the
cash go-to the company's treasuary,
or to buy stock already issue d for
goodwill to others? What is the re-
lation Of the cash cost or selling value
or the property Of the company to he
amount of its stock issues? Has 1t
ample working capital? What is its
Indebtedness? Are it's titles or patents
IN dispute? What are the salaries Of
its officers?
Now these questions would be only
some Of the preliminary questions which
the experienced investor would ask be-
fore taking up the equally important ones
relative to the nature, condition and pros
poets OF the business itself. How much
OF this kind Of Information have you,
who. after reading the fiamboyant adver-
tlsement In the peper fill In for.sa a few
dollars the cupon application for mining
or plantation stock printed In the margin
OF the advertisement Poor fool, the
man who follows off a bunco-steerer is
more excusabIe than you. He has at
ATaot ldu tiic OpDDIluHILy OI pdS5lu5 ~
nasty judgment upon the persontl ap-
pearance Of the scoundrel who Is after
his money You the simply biting on
hook with the bait half off, without even
seeing whether the fisherman looks TEN
eyolent. How chary is the fool OF dis
dlaying his folly? -
These are the days when the bank kers
listen to the condolences OF the unfor-
tunates who have been buying stocks on
straight tips" and who bring in their
remaining sound collaterals to borrow
cnougt to pay up their losses to the bro
kers How quiet they are-these same
men who were telling a few months ago
how they bought this or that stock upon
which their judgment had been vindicat-
ed by this or that profit. We hear OF
the successes; but of the failures which
outnumber them, we seldom near except
wnen STERN necessity reveals them But
out sympathies are not so much excited
by this class of fools.
! know poor scrubwoman who inves-