The Uselessness of Haphazard Speculation.
There is nothing like unsystematic speculation to destroy the cool temperament of a man. A loss incurred through hasty ill-matured operations renders him impatient to recover it, which probably leads to its being doubled. If he chance to recover the loss, instead of pausing to reflect upon the surprise created in himself by a result only feverishly hoped for, he goes on blindly tempting fortune, only to experience ups and downs which unsettle his judgment more and more, until he begins to “plunge,” when all is soon over.
Accurate Foresight.
Any one who has moved about at all amongst financial experts, and has closely observed them, must have noticed that they seem to be men far above the average as regards penetrative intelligence, appearing to possess that calm precision of judgment, which, as a rule, is only secured by the deliberations of many persons. Men who have amassed a great deal of money, by their own unaided intelligence, have been men of steady accurate foresight, men who have possessed a large capacity of judging what the public will do in the Stock markets under certain circumstances. A great speculator must make it his study to gather into a focus the various effects that are likely to arise under a given transformation of circumstances, analyze them, set one against the other, and calculate out the effect that will be caused when their forces are spent.
The cool Man, or Professional Speculator.
We will now suppose we are watching the speculator of the cool calculating temperament, and also the excitable man who is always acting on new ideas, which, he thinks, will occur to no one else until he has made money out of them. The cool man sits quietly down and reasons with himself, and arrives at the conclusion that what is indispensable to him as ground work is, first, some capital, a sum proportioned to the contemplated extent of his operations. Without this to commence with, speculating under any conditions is about as sensible, and about as likely to be followed by the desired result, as attempting to ferry people across a deep stream without the aid of a boat. Secondly, early information is equally necessary from all other markets where the securities are dealt in in which he contemplates speculating. To render such information as far as possible trustworthy, a branch house in the cities where there are important bourses is desirable. These two portions of the machinery are absolutely indispensable, if success in large operations is to be the rule and not the exception; and the man with the cool temperament will probably owe his success as much to the judgment which showed the necessity of these accessories, as to the well and timely directed operations which, based upon them, result in profit.
Observance of the daily published Telegrams from Abroad.
With the necessary capital and machinery duly prepared for instant action when a good opportunity occurs, the cool man plants himself in a prominent position from which he can discern at once the small cloud on the horizon which warns of the coming storm. The telegrams in the daily press, as they rise above such hypothetical horizon, are the harmless or otherwise little clouds which our speculator will scan, making a note of any which may seem to deserve attention for any special reason, on account of the effect they may be calculated to have upon the public mind. Well-conducted journals only admit into their columns telegrams from trusted correspondents, or from the public companies who supply them, and whose interest it is to adopt every precaution against imposition. An important telegram in a high class journal standing on its merits will always produce more or less effect, and it is of much consequence, but in the second rank, in the chain of machinery necessary to insure success for the speculator, that he be posted hourly throughout the day in the telegraphic news which reaches the seat of his operations. Side by side with this telegraphic intelligence which appears in the press, the speculator will receive private telegrams in cipher from his correspondents abroad, and according to his skill and intelligence in reading between the lines of the two, and judging of the probable course of events by their light, will he be able to operate profitably or not.
Pure speculation as a business, the sole object of which is to gain money, is, from the point of view of risk, removed far out of the ordinary path in which men labour for profit. Only a small percentage of men desire, even if they thought they possessed the required exceptional qualities, to gain their living in such a way. Most men reason that life is short, and that to spend it always in an atmosphere of excitement, under circumstances which keep up a constant destructive mental strain, is a mode of gaining money that involves too heavy sacrifices. The speculator who deliberately selects that calling must consequently be a man peculiarly constituted. He is generally a man of rather singular habits of thought, who thinks it quite legitimate to start a Juggernaut, and drive it over the crowd, if thereby he can do it profitably. Perfectly legitimate processes of working a market with him, would be considered little better than cheating by the ordinary run of men. He employs systematically all sorts of devices for getting the better of others who are ignorant and less sharp in foreseeing events than he. He does not scruple to lay traps, and drive the public into them, by plying them with fictitious telegrams, if he can get them published, and by forming syndicates to “rig” the markets. He partakes, indeed, a good deal of the nature of the bandit, who prepares the way for forcing concession to his demands by firing a volley into the carriage of the traveller to whom he is going to give the choice of his money or his life.
The Selfishness and Hard-heartedness of the Professional Speculator.