11 
capital for the sake of a possible profit. The 
purpose of this book is to supply our readers 
with a sound system of investment and not 
to encourage them to risk their capital in 
speculation. 
In the above example it will be noticed 
that the movements of the two stocks were 
of similar extent, that is to say, they both 
fluctuated five points, so that their width of 
fluctuation was identical. Now, when com 
paring the characteristics of different stocks, 
it is important to remember that stocks 
resemble or differ from one another in sound 
ness, in dividend-productiveness, and in width 
of fluctuation. Their limits of fluctuation 
constitute a very material difference between 
stocks ; and of two stocks, both subject to 
precisely the same market influence, one may 
rise or fall five points as the consequence of a 
given event, whilst the other may move only 
two points in response to the same influence. 
The safety of Capital is obtained by dividing 
it (1) equally among a number of sound 
stocks (2) of identical quality, but (3) every 
stock held must be subject to an entirely 
different market and trade influence. 
In selecting stocks of identical quality, the 
average annual fluctuations over a period of 
at least three years should be compared. It