THE THEORY
OF
STOCK EXCHANGE
SPECULATION.
BY
ARTHUR CRUMP.
With Preface and Annotations by
H. W. ROSENBAUM.
New York:
H. W. ROSENBAUM.
1887.
Copyright, 1886.
By H. W. ROSENBAUM.
Jones Printing Co. Press,
47 Broad St., New York.
Some years ago I came across a book, called“Crump’s Theory of Stock Speculation,” which hadgone through several editions in England; and thepractical wisdom expressed therein impressed me soforcibly that ever since then I formed the project ofpublishing an American edition.
The reader may be astonished that, as a broker, Idesire to give such a book a larger circulation than itpossessed heretofore, as the natural conclusion wouldbe that it might injure my business. I feel, however,that it is not so, and think that a broker loses nothingby doing his duty in warning his clients againstdanger, and showing them the pitfalls.
I do not quite agree with the author of the bookon every point, especially when he seeks to conveythe impression that it would seem almost impossiblethat any profit could be derived from Stock Exchangespeculation. During my long experience I have seenmany speculators accumulate large fortunes, and Ibelieve that when speculation is conducted by aclear-headed man, as a matter of business and not asa matter of amusement, it offers great chances.
Where the strength of Mr. Crump’s work lies isin his showing what attributes of character a manmust possess to be successful, and with these attributesa man must prove successful in stock speculationas well as in any other business. Condensed, these attributesare: first, a clear head; second, capital; andthird, patience.
I do not agree with Mr. Crump, that a speculator,to be successful, must be a hard-hearted, selfish man.I found it different with most of the prominent menin Wall Street. Of course, if a Gould or a Vanderbiltbuys up a whole railroad, he cannot very welltake many people into his confidence; but these menare not what is generally called speculators—theyare generals or diplomats, and they are not differentin their actions from generals in warfare or diplomatsin politics.
Outside of this class, I found generally, when Iasked one of the prominent speculators for his opinionof the market, that he gave me his true and candidopinion of the future of the market; and the probabilitiesare that, if even not acting on this opinionat that very moment, his general policy was based onsuch a forecast of the market’s condition.
The strength of the successful speculator lies inhis observing the important principle set forth byMr. Crump on page 60 of his work. “Speculatorsnever set sufficient value on the importance of avoidinga loss—they think only of the profits.” As it iswith our money affairs when we say, “Look after thepence; the pounds will take care of themselves,” so it iswith speculation. Look after the losses; the profitswill take care of themselves. Never refuse a profit, isa golden motto for speculators, which unhappily fewof them, in their greediness, have the courage toadopt. The observance of this rule is the main causeof the success of the best speculators, and the non-observanceis the cau