The Theory of Stock Exchange SpeculationCrump, Arthur
General
The Theory of Stock Exchange Speculation
Crump, Arthur
Speculation
A speculator should have a good aneroid barometer, that has a good big
indicator, hung up in his hall, and he would not be very far wrong if
he were to buy and sell according to the indications given by this
instrument that it was going to be good or bad weather. Most people are
like any one you may chance to single out of a crowd, from a physical
point of view.[21] The change from fair to foul weather will have the
same effect upon a crowd as upon that one man. Foggy, wet, and cheerless
weather sends people to their homes with a contented mind, if they feel
they can hold their own until the return of sunshine; just as a storm
causes navigators to run for a harbour, or seek the nearest shelter from
its fury. When buyers keep away from the markets, prices droop with their
own weight, and, from the mere absence of any buying at all, will often
fall as regards value, out of all proportion to the extent of the sales.
Such a period is a very good one to turn round and buy, as there is sure
to be a nearly corresponding recovery with a favourable change in the
weather.
[Sidenote: A FAVOURABLE PERIOD OF THE YEAR.]
Unless there are special causes at work, during the first month of the
year the Stock markets are usually as hard and inelastic as the frozen
earth outside. At Christmas-time people make up their accounts for the
year, and most of them, having gained less than the total pictured by
their imagination, are more or less out of humour, and disinclined to
enter upon commitments outside the limits of their business proper. At
such a period, therefore, a speculator may look for fluctuations which
as a rule will not occur. As February creeps on, if circumstances are
generally favourable for trade, so that the newspapers can dish up their
daily fare with sauces that encourage their readers to look on the future
with hopefulness, losses that are written off will begin to assume less
harrowing proportions, and the old inclination to launch out will come
to the front.[22] The professional speculative element in the community
sniffs this movement on the part of the public with the accuracy of a
pointer that has found his bird, and they commence to draw the credulous
by fictitious prices, now and then unloading to be ready when the relapse
comes, to commence anew when another favourable opportunity offers. As
the spring comes in, with its delights and young verdure, and cheering
early sun-rays, which draw the notes of the lark and the linnet, the
disposition becomes more general to disregard those strict lines of
prudence which the bleak winds of autumn and the shorter days of an aging
year, mark out so prominently for observation. At a period of the year
when spring is merging in early summer, with all its pleasant prospects
of pleasure to come, it is quite natural to suppose that a desire
should arise to make money, by which everything could be made smooth
and delightful during the most enjoyable part of the year. Then again,
Public-domain text, read in full here on John Shaqi.
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