“As simple as this illustration may appear, it is worthy of most earnest consideration. True, the upward and downward movements show opportunities on both sides, but if the _purchaser_ makes a mistake, as all speculators will, he is hopelessly involved. If he buys at the wrong point he will never see daylight during the progress of the movement. Look at the other side of the matter. The _seller_ cannot make a mistake. No matter at what point he sells a profit lies before him. A little reflection will show what a tremendous difference exists here.”--From Thomas Gibson’s Market Letter, Feb. 2nd, 1907. [Illustration] _Indications of Crises._ “Preceding Indications.--This preceding period is characterized by well-defined indications, some of which develop contemporaneously, but which, so far as they are distinct in time, occur in approximately the following order: “1--An increase in prices, first, of special commodities, then, in a less degree, of commodities generally, and later of real estate, both improved and unimproved. “2--Increased activity of established enterprises, and the formation of many new ones, especially those which provide for increased production or improved methods, such as factories and furnaces, railways and ships, all requiring the change of circulating to fixed capital. “3--An active demand for loans at slightly higher rates of interest. “4--The general employment of labor at increasing or well-sustained wages. “5--Increasing extravagance in private and public expenditure. “6--The development of a mania for speculation, attended by dishonest methods in business and the gullibility of many investors. “7--Lastly, a great expansion of discounts and loans, and a resulting rise in the rate of interest; also a material increase in wages, attended by frequent strikes and by difficulty in obtaining a sufficient number of laborers to meet the demand.”--From “Crises and Depression,” by Theodore Burton. _The Ordinary Swing of Prices During a Cycle of Speculation._ UPWARD SWING. EXTREME | A long period of backing HIGHEST. | and filling; public buying, and 100 | inside liquidation. 90 | Excitement and inflation | 75% of general buying done here. 80 | Good buying all around. | Public interested. NORMAL | Opinions mixed. Public beginning VALUE. | to buy, but professionals 65 | rather bearish. 45 | Insiders still bidding prices up. | Professionals bearish. 30 | Insiders bidding for stocks, | public skeptical. 20 | A dull market. Insiders EXTREME | accept all offerings. LOWEST. |