ossibilities of profit in language that would be considered greatly
exaggerated if used by a promoter, and yet he is extremely conservative
in his advice to traders. He advises never to buy on margin, never to
sell short, and staying out of the market entirely, neither buying or
selling, for a great part of the time. Here is a quotation from his
book, which follows a detailed statement of an investment of $2,500 over
a period of fifty years:

"The preceding example shows that $2,500 conservatively invested in
a few standard stocks about fifty years ago would today amount to
over $1,000,000. These are not only strictly investment stocks, but
are also stocks which have fluctuated comparatively little in price.
This, moreover was possible by giving orders to buy or sell only
once in every three or four years.

"If other stocks which were not dividend payers and which have shown
greater fluctuations were purchased, and advantage had been taken of
the intermediate fluctuations, the $2,500 would have amounted to
much larger figures. By intermediate movements is not meant the
weekly movements which the ordinary professional operator notes, but
the broader movements extending over many months and possibly a year
or more. Nevertheless, these broader intermediate movements should
not be noticed by a conservative investor, as it is possible to
correctly diagnose only the movements extending over longer periods.
Many brokers believe that it is possible to discern also these
intermediate movements of six or eight months; and if so, the
following results would have been possible.

"$5,000 invested in 'St. Paul' in 1870 would
amount to over $10,000,000 today.

"$5,000 invested in 'Union Pacific' in 1870
would amount to over $15,000,000 today.

"$5,000 invested in 'Central of New Jersey'
would amount to over $30,000,000 today.

"$5,000 invested in 'Northern Pacific' would
amount to over $50,000,000 today.

"These figures are not based on the supposition that the investor
was selling at the top of every rise or buying at the bottom of
every decline, but that the transactions were made at average 'high'
and average 'low' prices based upon the study of technical
conditions."

If such large profits can be made by following Babson's advice, of
course larger profits can