The work of the Stock Exchange

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Monograph

Identifikator:: 1831284952

URN:: urn:nbn:de:zbw-retromon-225876

Document type:: Monograph

Author:: Meeker, James Edward http://d-nb.info/gnd/126597340

Title:: The work of the Stock Exchange

Edition:: Revised edition

Place of publication:: New York

Publisher:: The Ronald Press Company

Year of publication:: [1930]

Scope:: XVI, 720 Seiten; Illustrationen, Diagramme

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

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Document type:: Monograph

Structure type:: Chapter

Title:: Chapter V. The dangers and benefits of stock speculation

Collection:: Economics Books

124 THE WORK OF THE STOCK EXCHANGE the economic standpoint, it is essential in each case to concen- trate on what kind of an act is committed, rather than what the one who does it may be thinking about at the time, or whether he is intelligent or the reverse, or indeed whether he is really a nice man in other respects or not. Distinctions Between Investment and Speculation.—The theoretical distinction between investment and speculation in securities is thus clear enough. Yet in actual daily life this distinction becomes almost impossible to establish, owing to the usually inextricable connection between income and profits in securities. Of course, some cases of almost pure investing and of almost pure speculating exist. A savings bank account is an. almost completely non-speculative investment, for there is no chance for appreciation of principal, but simply an income derived from it. Yet even here the failure of the bank or currency troubles might enter into the case. So, too, the purchase of a non-dividend-paying stock in order to profit from a possible rise in its price is almost a pure speculation; never- theless, the rise in price will probably be due to an actual divi- end or the hope of a declaration of a dividend upon it. As a matter of fact, the purest cases of speculation occur, not in securities but in commodities, which do not of course pay interest or dividends, and hence do not involve this element of income which so extensively pervades the consideration of securities. In the field of articles and commodities the proto- type of the investor is the consumer or user, and the distinction between speculation and investment consumption there depends upon whether the individual purchases goods to use or consume himself, or to sell to some other consumer with an attempt to get a profit. In the latter case he is just as truly a speculator as the margin purchaser of stocks or the short seller of cotton fFiituires. Returning to the instance of securities, however, the aver- age man who buys 100 shares of stock wants both an income and a profit to be derived bv selling it at a higher price later on,

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