capital safety and the realisable value of his 
investments are matters which can be dis 
regarded with impunity. 
But, it may well be asked, if every purchase 
of stock is a speculation, what should the 
investor do who desires entirely to eschew 
speculation ? The answer to this question is 
that precisely as a carefully-studied system of 
averages eliminates all taint of gambling from 
a sound system of insurance business, so a 
sound system of averages, based upon the 
Geographical Distribution of Capital, should 
reduce to a minimum the taint of speculation 
from the act of investment. 
From their very nature, insurance and 
investment are both highly speculative trans 
actions, which can only be raised to the dignity 
of solid business by a carefully studied system 
of averages. 
We have already shown that the realisable 
value of all important and intrinsically sound 
stocks is dominantly influenced by the trading 
conditions of the particular country in which 
they are principally held and dealt in, and 
that the trade of every country moves in 
cycles of prosperity, followed by cycles of 
adversity. 
Further, we have shown that the course of 
trade of countries which are under different