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.

Chapter

Document type:: Monograph

Structure type:: Chapter

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

Collection:: Economics Books

STOCK SPECULATION—DANGERS AND BENEFITS 125% and is therefore part speculator and part investor. Conversely, the practical speculator bases his purchases and sales of securi- ties upon prices which are fundamentally determined by the income or the expectation of income to be derived from them. The margin purchaser, who is in the main a speculator, often selects dividend-paying stocks in order to offset his interest charges,” while the short seller gives careful attention to the dividends paid on his short stock, since he must pay them to the loaner of the stock. Moreover, many an investor who pur- chases for income will, after a swift rise in price, sell out for a profit and consequently become a speculator. Thus, in actual practice, the difference between investors and speculators in securities is one of degree rather than of kind, and it is espe- cially difficult to state in any given case just where the one ceases and the other begins. It should be noticed that invest- ment and speculation are alike in that they both involve a genuine exchange of ownership of actual property. All orders, whether for investment or speculation, are executed and cleared in exactly the same way in the Stock Exchange. Meaning of the Term “Investment Transaction.”—The ordinary Wall Street expression of “investment transaction” refers to an outright purchase and sale of securities, and that of “speculative transaction” to a margin purchase or short sale.’ Usually, of course, margin purchasers and short sellers are actuated principally by a desire for profits rather than for income, and the presumption usually is when a security is bought or sold without the use of credit that the primary motive is income. Yet investors sometimes purchase securities on margin by the “part payment plan’; sometimes short sales are caused by the liquidation of investments from out of town or from abroad; and many people purchase securities outright in order to sell them later at a higher price. As working defi- nitions, then, these expressions, while of considerable practical See Chapter VII, p. 182. ale, Stas with, this’ meaning that Chapter V1, dealing with an outright purchase and

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