Whether there be any more rise or not left in public securities as a body after the turn of the half-year,—we are speaking from a bull point of view, as that is the way in which the public, in ninety-nine cases out of a hundred, operate,—we should always recommend a speculator to pack up his traps and go right away, whether he has won or lost on balance. If he has lost, which will probably be the case, there is all the more reason for not continuing, for he is as certain then as the day dawns, to increase it by going in heavily, or “plunging,” as it is termed. If he retires from the scene, and permits his nerves to recover, he will return to be “cleaned” out in a more wholesome frame of mind, which will enable him finally to quit such haunts without probably resorting to such desperate measures as might have been adopted, had his coffers been emptied all at once under a July sun.
At all events, the most methodical and prudent speculator, who manages to amuse himself, and by extreme care, like good whist players, leaves off at the end of six months about even, would not dispute the wisdom of closing his book when all the world was going away for their holidays.
Second Half of the Year more Favourable for Bear Operations.
As the first half of the year is favourable for the bull speculator, so the second half is more likely to favour the operations of the bear. When people have had their outing and spent their money, they return to business, and to think of the necessity of prudently providing the comforts needful in the chilly autumn and cold winter. Business begins to slacken in many important branches with the approach of that period of the year when the days and nights come to be of equal length all over the earth, except just under the pole. There may be a good deal of money about at such periods, and yet very little investment business going on in the stock markets. It should be remembered that large extra accumulations of money at the great centres very often mean, in fact, generally, an unprofitable state of trade; and when the foreign shipments leave no profit, from the great merchant princes down through every link in the chain to the labourer at thirty shillings a week, the effect is felt, and there being no profits, there is obviously nothing in the shape of surplus gain to invest. On the contrary, most people wish to sell. In the later months of the year locomotion for nearly all purposes begins to diminish both as regards business and pleasure, which affects the receipts of the railway companies. If there should have been a bountiful harvest, an important favourable influence may thus be exercised; but even as regards this, it has been evident for many years past that the harvest question in England is of comparatively diminishing importance, and there is every prospect that much of the land now under corn will return by degrees to its primitive state, and will pay better as pasture for fattening beasts.[23]
As we spoke of the Bank of England becoming temporarily rich, by the accumulation of revenue early in the year, so it becomes, as a rule, poor in the autumn. People are getting more used to this ebb and flow in Threadneedle Street, and the trouble it caused when Mr. Lowe first begun experimenting is not now experienced to the same extent; but still it is one of the elements which is disadvantageous, and to be kept in view by the speculator as a regularly recurring adverse influence.
It is, of course, of the last importance to keep a watch over the foreign exchanges, as these are affected more or less at certain periods when the imports and exports of special kinds of produce and manufactures are active.
Other influences which occur with machine-like regularity will be referred to as occasion may require, and we now proceed to go more into detail.
Activity among Buyers.
The Bull Speculator’s Great Chance.
The great Importance of being now and again altogether clear of the Markets.