The Art of Wall Street Investing involves two important primary principles. The first is to place one’s principal where it will be entirely secure, and the second, to gain as large a percentage of return as possible without in the least disturbing or lessening the security of the principal.
Introductions (From Author):
Although the popular impression is probably the reverse, it is certainly a fact that a greater sum of money is annually lost in this country through unwise investment in Wall Street, than through pure speculation.
While fortunes are daily jeopardized and dissipated through speculation in stocks, bonds, grain-futures and like ventures, yet the many sums, large and small, which annually leave the pockets of actual investors are far greater in amount. Indeed, I would almost say that the losses incurred through “unwise Wall Street investing” are easily tenfold the losses occasioned through mere speculation on the exchanges.
And furthermore, the losses resulting from unwise investing are far more important to the community at large; for while speculative losses are in a sense anticipated, the losses through mistaken investments are usually unexpected and unprepared for.
Speculative losses often represent the loss of money easily gained, either through former speculations or from other sources, but the average loss of the investing public is generally a loss of hard-earned or industriously accumulated savings; and therefor such losses are felt more deeply by the community.
This Book involves two principles. The moment the status of the principal is changed for the purpose of enhanc-ing the rate of return, the transaction ceases to be a pure investment and becomes more or less of a speculation.
Thus, analyzed in its simplest form, we may put it down as axiomatic that only those are legitimate investments where the primary motive is the safe securing of one’s principal and the rate of return thereon is looked upon as secondary.
A speculation, on the other hand, is where the desire for large profit is so strong that the safety of the principal becomes in effect a minor comideration.
That is to say, the person investing or speculating may regard his principal as secure but is willing to place it at considerable risk in order to increase his profit. The securing of the principal, therefor, is the first and chief matter to be considered in investing money.
Looked upon in this light, it will be seen that the matter of investing money wisely is a most important as well as a most difficult art, and therefor well worthy of careful examination.
The ideas and suggestions embraced in the following pages are the concrete result of sixteen years’ experience and study of Wall Street conditions and methods; and while it may appear to some that the writer is too conservative in his attitude towards investing methods in general, yet careful thought should convince every reader that it is the part of safety and prudence to be securely on the side of con-servatism in Wall Street investing, rather than the reverse.
In the following chapters the general sub-ject of Wall Street investing is treated in as practical a way as possible. The fundamental principles of investing are carefully examined, and their importance emphasized. It is intended that the book shall not be merely a treatise on the abstract or theoretical side of investing, nor that it shall merely give a sur-face view of the investment field.
Rather is it intended to make the book of general use as a practical handbook or guide for those who wish to place their money in legitimate corporate enterprises of the several kinds, through the purchase of stocks and bonds. Not only are the different classes of securities themselves described, but careful explanations are given of the machinery and methods of investing throughout the various Wall Street channels.
Contents:
- Safety and Security
- Bonds and What They Represent
- Stocks and What They Are
- Analyzing Railroad Securities
- Industrials and Tractions
- Investment vs. Speculation
- “Get-Rich-Quick” Schemes
- Reorganizations and Syndicates
- The New York Stock Exchange
- Wall Street Phrases and Methods