y by ignorance and greediness. Many people who would be
satisfied with a fair return on their money in a business enterprise,
think they ought to make a 100% profit in a few weeks in stock
speculation.

There is something about stock speculation that appeals to the
greediness and pure gambling instincts of people. In the chapter on
Manipulation, we have told you how stock prices are put up and down.
Some outsider accidentally buys one of these stocks just before the
price starts up. In thirty days he has made several hundred per cent
profit. He does not realize that it was purely accidental as far as he
was concerned, and he tries to do the same thing again, and loses all of
his profits and probably all of his capital as well.

A stock gambler (we use the word "gambler" to refer to a man who
operates ignorantly) is watching a large number of extremely speculative
stocks and suddenly notices one that takes a big jump in price. Then he
says to himself, "If I only had bought that stock on a ten-point margin,
I would have made several hundred per cent profit." He picks out another
stock that some one tells him is going to do equally as well. He buys as
much of it as he can and puts up all the money he has as a margin, but
the price doesn't go up. Perhaps the price goes down and he loses his
margin; but, it may remain almost stationary for a long period,
sometimes for a year or more, and during all of this time, this man is
worrying for fear he will lose his money. If he does not lose his money,
it is tied up for a long time where he cannot use it to take advantage
of real opportunities that come his way.

It does not pay to take big risks. That is true in stock speculating the
same as in any other undertaking. Most speculators are keeping their
minds all the time on the possibilities of profit and not thinking about
the possibilities of losing.

If you want to be successful in stock speculating, there is one thing
you must learn to do, and that is never to think about the big profits
you might have made if you had bought such and such a stock, because the
probabilities are you could not have afforded to take the necessary risk
in buying that stock.

Of course, after it is all over, it may look to you as though the buying
of that stock was a sure thing, but the buying of such stocks is never a
sure thing. The risk always exists. There is an old saying, and we
believe a very true one, that a man who speculates with the i