capital  safety  and  the  realisable  value  of  his
investments  are  matters  which  can  be  disregarded ­
  with  impunity.
But,  it  may  well  be  asked,  if  every  purchase
of  stock  is  a  speculation,  what  should  the
investor  do  who  desires  entirely  to  eschew
speculation  ?  The  answer  to  this  question  is
that  precisely  as  a  carefully-studied  system  of
averages  eliminates  all  taint  of  gambling  from
a  sound  system  of  insurance  business,  so  a
sound  system  of  averages,  based  upon  the
Geographical  Distribution  of  Capital,  should
reduce  to  a  minimum  the  taint  of  speculation
from  the  act  of  investment.
From  their  very  nature,  insurance  and
investment  are  both  highly  speculative  transactions, ­
  which  can  only  be  raised  to  the  dignity
of  solid  business  by  a  carefully  studied  system
of  averages.
We  have  already  shown  that  the  realisable
value  of  all  important  and  intrinsically  sound
stocks  is  dominantly  influenced  by  the  trading
conditions  of  the  particular  country  in  which
they  are  principally  held  and  dealt  in,  and
that  the  trade  of  every  country  moves  in
cycles  of  prosperity,  followed  by  cycles  of
adversity.
Further,  we  have  shown  that  the  course  of
trade  of  countries  which  are  under  different