7 
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To begin with, the danger is obvious of an 
investor confining his purchases to one stock. 
In such a case he would be retaking his 
accumulated wealth on the fortunes of a single 
security, and on any serious depreciation over 
taking the stock of his choice his loss would 
be considerable. Further, he would be reduced 
to the vexatious position of having no other 
practical course open to him than to wearily 
nurse his crippled investment in the vague 
hope of its ultimate recovery. A 'prudent 
investor will therefore split his capital up 
among a variety of investments. The number 
of investments which would best suit his case 
depends entirely upon the amount of capital 
of which he is possessed. Thus, with a capital 
of £1,000 to invest, three stocks might suffice, 
whilst with £5,000 capital, ten stocks would 
be requisite. Later on in this book we shall 
lay down a very definite scheme for the 
scientific sub-division of capitals of all sizes. 
The idea of investing capital in a variety 
of stocks is to prevent any financial disaster 
adversely influencing more than a small portion 
of the total capital. Therefore, to select two 
-or more stocks whose price fluctuations depend 
on the same influences would be to defeat the 
whole scheme of distributing capital. So that 
not only must capital be sub-divided among a