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

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Document type:: Monograph

Structure type:: Chapter

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

Collection:: Economics Books

134 THE WORK OF THE STOCK EXCHANGE speculation which subsequently readjusts the prices to inherent values. Moreover, hindsight is always easier than foresight. It is easy to detect afterwards occasions when market prices, which largely represent human opinion, temporarily misjudged the trend in values, but it is a very different matter to stare into an inscrutable future and accurately fit prices to future values. The distance into the future which present prices may be dis- counting is also a variable factor. But with all due allowance for such exceptions, the general effect of speculation, if allowed freedom and permitted to proceed with equal ease for the rise or for the decline, is to stabilize prices,*® by adjusting them aven in advance of changes in intrinsic values. Another public misconception of speculation seems to arise from a tendency to associate it with manipulation of prices. As a previous chapter’ has pointed out, in reality free specula- ‘jon is the principal corrective of the manipulation of prices. Losses from Speculative Ventures.—After this extended account of the ills for which speculation is not responsible, the reader may think that the present study is an attempt to “white- wash” speculation. This is far from the truth. For, having disposed of these incorrect notions concerning speculation, there still remains a residuum of possible danger and harm to the individual which no one would attempt to deny—Ileast of all members of the Stock Exchange, who, if only from their own experience, appreciate just how dangerous speculation can be. This story of the real injury done by injudicious specula- fion is older than the South Sea Bubble and as universal as trade itself. For generations men have rashly undertaken speculative commitments in the stock market and out of it, have recklessly traded beyond their means, have been influ- enced in their commitments by “tips” and jumbled, absurd reasoning—and have lost their money. Usually, despite the "See Chapter II, p. 45.

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