Successful Speculation

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


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


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


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


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.