It is the object of the present work to point out, so far as the abilities of the writer will permit, what essentials are required in any form of speculation, whether on margins, or masquerading in the guise of investment. As to this last distinction, it may be stated that the word “speculation” is herein taken to mean the purchase of any security or commodity because it is considered cheap, with the ultimate intention of disposing of the property so purchased at a profit. In the writer’s opinion this definition is correct. Speculation contemplates a rise in price, and an accretion in principal. Investment refers to interest returns on money. One of the most flagrant errors in speculation is an entirely mistaken idea as to the _possibilities_ in this field. Nine men out of ten have a deep-rooted conviction that if any individual could be right in his main deductions for, say one or two years, he should make millions on a small capital. This is a great mistake, and leads to numerous minor errors which are productive of much loss in actual operations. The business of speculation never did, and never will result in abnormal profits. Large returns are sometimes made, it is true, but this fact is also true of every other line of business. Certain individuals grow very rich in Wall Street; this again is true of every commercial branch. We hear now and then of a million dollar coup by a Morgan or a Rockefeller, and do not stop to consider the great capital behind it. If an individual makes five thousand dollars in a year’s speculative ventures on a capital of twenty thousand, he is not considered a Napoleon of finance, but he has accomplished much more, in proportion to his capital, than Rockefeller would have accomplished if he had made five millions on similar operations.