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Puts And Calls
What Is Speculation?
Minor Movements In Prices
A Correct Basis For Speculating
What Stocks To Buy
Successful Speculation
Stock Some Terms Explained
When To Buy Stocks
Stop Loss Orders
Technical Conditions


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When To Sell Stocks
Possibilities Of Profit
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Two Kinds Of Traders
The Desire To Speculate
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The Money Market And Stock Prices
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When Not To Buy Stocks


Successful Speculation








Success in stock speculation depends upon a few things that are very
simple.

If you know what to buy, when to buy, and when to sell, and will act in
accordance with that knowledge, your success is assured. You may think
it is impossible to know these things, but it is not so difficult as it
is supposed to be.

Many people buy stocks at the wrong time, and most of those who do buy
them at the right time, buy the wrong stocks. Right now (early in April,
1922) is buying time in the stock market, and it is possible that this
buying time may continue--with some interruptions--for another year or
two, or even longer.

It is more difficult, however, to tell you WHAT stocks to buy. First of
all, we advise you against buying stocks that are put up to high prices
by manipulation. Of course, if you get in one of those stocks right and
get out right, your profits are very large, but you take a great risk,
and those who win once or twice by this method are almost sure to lose
everything sooner or later in an effort to do the same thing again. Your
chances are not much better than if you gambled at Monte Carlo. The
chances in buying manipulated stocks are invariably against the
outsider.

There always is so much publicity about these very active speculative
stocks that the public is attracted towards them. Newspapers and
brokers' market letters give altogether too much space to them. Such
stocks sell far too high, and when the break comes, it brings ruinous
losses to many people.

On the other hand, by following a conservative course, you really have a
chance to make large profits with a minimum risk. We are giving below
sixteen stocks that we recommended in our Advisory Letter of February
14th, 1922, with the approximate prices of them then and the approximate
prices on March 31st.[2] In arriving at these prices, we took the
closing prices on February 13th and on March 31st, and omitted the
fractions. We recommended only sixteen stocks on that date, and you will
see that every one of them made substantial gains.

Approximate Approximate
Price Price
Stock Feb. 14, 1922 Mar. 31, 1922 Profit

C. R. I. & P. pfd (6) 75 79 4
C. R. I. & P. pfd (7) 88 93 5
New York Central 76 88 12
Pacific Gas & Electric 64 68 4
Consolidated Gas 90 109 19
American Telephone & Telegraph 118 121 3
General Motors Deb. (6) 70 78 8
General Motors Deb. (7) 81 91 10
U. S. Steel 87 95 8
Dome Mines 23 26 3
Laclede Gas 50 63 13
Missouri Pacific Pfd 48 54 6
C. R. I. & P. Common 33 40 7
Am. Smel. & Refining 45 53 8
Anaconda 47 51 4
Erie Common 10 11 1
---- ---- ---
Total 1005 1120 115

Let us suppose you bought ten shares of each of these stocks on February
14th. They would have cost you $10,050. We recommended 30% margin on the
first ten, all of which were dividend payers; and 50% margin on the last
six, because they were more speculative and would have been more
affected by a reaction in the market. To buy ten shares of each on that
margin basis would have required a little less than $3,500, but let us
suppose you put up $3,500. After allowing for buying and selling
commissions and interest on the balance of $6,550, but crediting you
with dividends paid, your profit would be about 32% or at the rate of
about 250% per annum.

Of course, we do not claim that by following the conservative course we
advise, you always will make such large profits, although you might do
just as well as that if you took advantage of some of the opportunities
so frequently to be found in the market; but keen discrimination in what
you buy always is necessary. However, let us suppose you made annual
profits of one-fifth the above amount, or 50%, which is easily possible
without taking the risks that are usually taken in stock speculating. If
you invested $1000 and made 50% profit per annum, reinvesting your
profit at the same rate each year for twenty years, you would have more
than THREE MILLION DOLLARS.

When there is a possibility of making such enormous profits as that by
following careful methods, surely there is no argument in favor of
taking the extreme risks that people do take in buying the highly
speculative stocks, the prices of which are put up for the purpose of
unloading them on the public. Ten of the stocks we selected in the above
list were dividend payers, and while the other six were not, they were
considered worth much more than their market prices, and the list as a
whole was conceded by conservative people as a safe one to buy.

Very frequently we are able to recommend a list of stocks that we
believe will yield equally large profits, but the stocks you should buy
are not the ones that are the most active nor the ones that are
mentioned most frequently in the financial news and brokers' market
letters. The stocks that most people buy are usually the very stocks
that should be left alone. The stocks you should buy are usually the
ones you hear very little about.

There is only one SAFE way to speculate, and that is to be guided by a
knowledge of the fundamental conditions of each stock and also of the
industries they represent. There are several large organizations giving
information of this kind, and those who have been guided by the
fundamental statistics issued by them, almost invariably have made money
in stock speculating. The value of that kind of service has been
thoroughly demonstrated beyond any question. However, a subscription for
the service of most of these organizations costs more than the average
person can afford to pay. Usually it is anywhere from $100 to $1,000 a
year.

We are giving a service for the purpose of guiding our clients to
successful speculation for a fee of only $25 a year, $15 for six months,
or $10 for three months. For this fee we tell you what stocks to buy,
when to buy, and when to sell. We send you our recommendations at least
twice a month, but send you additional Advisory Letters and lists
oftener if conditions make it necessary. You also have the privilege of
unlimited personal correspondence regarding your market problems. The
cost of our Service is very small, compared with what other reliable
organizations charge.

Our Service is based on the principles expounded in this book. We try to
select stocks having the greatest possibilities of profit with minimum
risk, and the sample of our Service given in this chapter is proof of
our success.






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