Henry Voorce Brandenburg - Profitable Stock Exchange Investments

This book is published to show the absurdity of trying to make moneyspeculating in Wall Street without adequate capital and the ease withwhich it can be made with capital and proper methods.

The following pages open to the public a safe, conservative, and highlyremunerative channel for the investment of their surplus funds, whichdoes not have the element of risk and uncertainty that exists ingeneral business.

You read a great deal about the money lost in Wall Street.

As a matter of fact there isn't any money lost in Wall Street.

It simply changes hands.

People talk loosely about gamblers and speculators losing all theirmoney in the end.

If money is lost, somebody has got to win it.

The people who go plunging around in Wall Street making all sorts ofspeculations on margin naturally lose their money. They ought to expectto lose it, and they ought to lose it whether they expect to or not.They are simply gambling with all the odds against them.

Meanwhile, the wise and shrewd operators follow prudent, business-likemethods and get the money.

The Vanderbilts, Goulds and Morgans of Wall Street are sometimesdescribed as robbers waiting in their dens to slaughter the poorinnocents who venture within reach. That is all nonsense. They winbecause they know how to play the game, and others who have senseenough and patience enough to play the game in the same way will wintoo. They absolutely cannot help winning.

The purpose of this book is to inform the reader fully as to themethods by which money can be taken out of Wall Streetthe methodsused by the successful operators of the past twenty years to ourknowledgethe methods which positively must win year in and year out.

We purpose to give the public an opportunity to make a safe andprofitable investment in Wall Street, and have their money handled forthem according to correct and profitable methods.

The men who win in Wall Street are those who invest in stocksgood,dividend-paying stocks, buying them when they are low, selling themwhen they are high.

This is not gambling nor speculation any more than any legitimatebusiness is gambling or speculation.

In all classes of business we buy at a certain price, and sell at ahigher price.

We buy under the most advantageous circumstances possible, payingthe least possible price and selling at the highest market price.

This is what we are doing in Wall Street, and as we handle only thestocks of sound and stable corporations, the security behind ouroperations will be the strongest in the world.

The gist of the matter is that the stocks of the leading and moststable corporations of the country are tossed about in Wall Street fromspeculator to speculator, going up and down constantly and varyingenormously in the prices at which they are bought and sold.

These changes in prices are nearly always due to a feverish and excitedmarket. The stocks themselves do not actually vary in real value. Theyare worth a certain sum all the time. They are paying dividends on thatsum and the stocks at their real value are always a good investment.Yet by the manipulations of the speculators and on account of theexigencies of these Wall Street marginal gamblers such stocks can bebought at times at a fraction of their value, and by reason of the samecauses can be sold at other times for far more than they are reallyworth.

The men who make the money in Wall Street are those who know whatstocks are really worth and who buy when prices, go down and sell whenthey go up, buying and selling the same stocks over and over again,and making a handsome profit on every transaction. They do not care howlow a stock they hold goes for the reason that the stock belongs tothem, they know what it is actually worth as a dividend payer, and inthe skyrocket performances of the speculators of the Street they takeno interest except as it gives them opportunities to buy and sell. Theydo not care how high a stock goes; they have no shortages to cover, butcan simply sit back and sell as much of their holdings as they choosewhenever they see an opportunity to make a big turn.

Such men will turn a block of stock in a given corporation over andover dozens of times in the course of a year, making so much money onit that even if the stock should disappear off the face of the earthaltogether, they would still be far ahead on it, simply on account ofthe numerous advances and declines.

By owning stocks in a large number of good, sound corporations, theywill average to make a certain sum of money every day in the year. Theyspread their invested capital over a wide field in this manner, and thelaws of average make them sure gainers at every stage of theiroperations.

This is, as you will observe, very similar to the principles uponwhich the great life insurance companies are managed.

Many of these commenced business starting with but a few thousanddollars, and they now have assets of millions. They have piled up thisenormous wealth by insuring the lives of human beings.

Every company which has not succeeded has failed because it did notissue a certain number of policies.

The secret of success is the large number of risks reducing thechance to a minimum.

No life insurance company could succeed if it insured but a few lives.

By the law of average, insurance companies can tell just how many ofthe people they insure will die each year.

When you make an application for life insurance the first question theywill ask is your age, and by referring to their tables they can tellyou the month and day when you will die. Now, you may not actually dieupon that day, but you do theoretically, and the point is that theyhave so many risks that the law of average, always prevailing, in theend brings everything out just as figured.

The fact that one person lives longer than the date when his lifeshould end is offset by the fact that another person dies sooner thanexpected, and thus the law of average is absolutely maintained.

The postal authorities could not come anywhere near telling how manyletters would be mailed in the City of New York on a certain day, butthey can come with remarkable closeness to the average for a year inadvance, and predict with certainty how many people will write lettersand forget to address them during that time.

It is by the working out by the law of average as best exemplifiedby the insurance business that it is possible to work out a plan bywhich Wall Street stocks can be dealt in with absolute safety andcertain profit.

Of course, no man or company could purchase one hundred shares of stockwithout the risk of a loss. That is to say, no man should make apurchase of this kind unless he is in a position to buy again and againmany times over and still hold all that he has previously purchased.