12 rules of business and money

Herbert N. Casson, in writing the rules, wanted to assist in the art of making and investing. These rules are not for children and the weak in spirit.

These RULES are a dangerous and sharp instrument. They are not for children and the weak in spirit. They are not for cursory viewing and selective familiarization. They all need to be thoroughly studied and deeply comprehended.

The purpose I have pursued in writing the RULES is to give my readers the most practical help in the art of making and investing money.

As you will see for yourself, this book is unique. There is no such book in any library. It is the result of more than twenty years of activity related to the stock exchange. The book reflects not only my costly experience, but also much of what I learned from those who are much smarter than me. We all make so many mistakes in the field of FINANCE that no one dares to call himself a big specialist here. Such things as absolute reliability in business do not exist. Therefore, everyone is randomly rushing about. arranging. how can, their affairs. Very few fathers take care of their sons. Each new generation is forced to repeat the same old mistakes.

There are far fewer "AXIOMS" in FINANCE than in BUSINESS and MATH. But still, there are some RULES, and I ventured to offer you twelve of them, intended for people who have got their money and do not want to lose it. Research shows that out of 100 businessmen, only 4 become rich and keep their money. Most make money and lose it. At age 35, 20 out of 100 people are wealthy, but subsequently 16 somehow lose their money. The average businessman makes his money until age 50 and then loses it. Why is this happening? Is it because he studied BUSINESS - the art of MAKING money and did not study FINANCE - the art of SAVE money? Therefore, in the proposed chapters, you can find information about personal FINANCE, sufficient to protect you from losing your money. Moreover, in the last chapter you will find a SYSTEM for investing money, with which you can make money work for you and bring in new money. In conclusion, I would advise not to give this book to just anyone, and not to bury it in the library. It is written only for the CHOSEN - for those who have the intelligence, courage and consistency to benefit from the knowledge gained.

Rule 1. Invest ONLY IN WHAT YOU KNOW

This simple short rule of a few words could prevent a quarter of the losses in the world of FINANCE.

Probably every businessman reading these lines has at some time in the past suffered great losses because he did not follow the First Demand of the Investor: buy only what you know. Surprisingly, almost every businessman, starting to invest money, buys all sorts of rubbish. Despite everything, he stubbornly acquires a share in a business in which he understands nothing. A beginner in Finance wants big profits, He wants perfection. But since perfection can never be obtained at home, he invests his money in something that is 10,000 miles away.

In a word, every novice investor, to a greater or lesser extent, is chasing illusions. Even the most practical trader or manager invests his first £100 in worthless papers issued either by dreamers or swindlers under some abandoned jungle in Africa or a scam in South America or the Balkans. Almost every fifty-year-old businessman has a package of so-called "securities" in his safe. They are tied with a piece of rope, and the only valuable thing in this package is the rope. He bought what he didn't know. He bought with Ignorance, not Knowledge. And he paid the full price for his stupidity.

Since I am going to speak the absolute truth in this book of the Twelve Rules, I must admit. that there is less particularity in the world of Finance than in the world of Trade and Commerce. At the top of the world of Finance are the most capable and most reliable people in society. And so it is in all countries. But at the bottom of the world of Finance there are hordes of completely unscrupulous crooks. Most of them don't break the law. Many of them go to church, etc. But they are a much greater danger to society than all the burglars and pickpockets put together. If a merchant tries to sell you cotton collars instead of bed linen, he can be taken to court and fined. And a financier can sell other people's debts under the guise of assets during the year, and the law will only take off his hat to him.

In the field of Finance you can never believe what you hear. We must adhere to the philosophy of Descartes. Everything should be questioned, In the field of Finance every minute there are ten deceptions. Most of them are unintentional: they represent what can be called financial inaccuracies. But at the same time, people lose money, and a lot of it. There are no disinterested people in the field of Finance. Everyone pursues their own selfish goals. Everyone is trying to raise or lower prices. In such conditions, even an Angel, keeping a record of the virtues and sins of mankind, cannot expect to hear the truth from people. Nine times out of ten, the buy advice comes from the sellers themselves, and the sell advice comes from the buyers. As for reports about the organization of joint-stock companies, they cannot be trusted recklessly. There are clever verbiage in the City who can paint the shares of the manufacturers of antediluvian carts as if they were shares of the Rolls-Royce company. If we are talking about balance sheets, then so far they deserve some confidence. But the fact is that every year in thousands of them expenses are given the appearance of income and vice versa. No accountant will refute this.

Buy only what you know. If you are a merchant, invest your money in the best company that sells you goods. If you are a railroad worker, invest your money in stocks and other securities of the railroad that is most reasonably run. If you are a builder. buy land. If you are a traveler, buy a share in shipping. If you are an intellectual and do not understand anything about trade and commerce, buy government securities.

Whenever you can, buy a share in the business that is nearby. Invest in your own city. Buy what you can see with your own eyes. Outer fields always appear greener. Notes are twice as "greener", more inexperienced, if you invest a significant amount of your own money in them. Buy the house you live in first. Then buy the house next door. Experience. which you acquire as a homeowner will soon cure you of your mirage-chasing mania. If there is no property nearby in which to invest your money, buy securities of well-known firms that have been in business for 30 years or more. Any railroad or firm that pays dividends for 30 years is the best it can be in this realm of risk.

But if possible, always invest in a business you know. Case. which you know is exactly what you can least cheat on. The bottom line is that you can't be incompetent/when you invest. And you can't be trusting. Ignorance is always dangerous. but most of all - in the field of Finance. If you are in business you know you are in charge of your own money.

So, in Financial activity, which can be defined as the Art of Keeping Your Money and Making New Money Through It, the first rule is to do not what you are told about, but what you know yourself..

Is it not generally accepted that once a person has money, very few people are sincere with him? As soon as it becomes known that a person has got money, people of all categories, both decent and scoundrels, begin to try their best to deprive him of money.

Everyone's money is in danger! And it's almost always harder to save money than to make it. So the first rule is: Be Careful. Buy only what you know.

Rule 2. NEVER INVEST MONEY UNDER PRESSURE

This rule applies to both business and Financial activities. Its essence is. that everyone who has some money.must firmly adhere to the principle: never spend, lend or invest under pressure. There are so many cheats in the world. poor relatives and beggars, that a man with money should hold on like a fortress. He shouldn't be wary. He must protect himself from all these extortionate parasites who live by constantly begging for other people's money.

Whenever you are asked for money, postpone your answer until tomorrow - this is a rule that will save you from many losses. We are surrounded by so many people who can convince anyone of anything that it is not easy for a person to keep what he has. Thanks to the efforts of both different parasites and governments. and scoundrels in the modern world, the art of depriving people of their money is highly developed. The art of attack in the realm of Finance is vastly superior to the art of defense. And I am writing this book precisely in order to develop for the first time, finally, this art of defense.

There are always crooks in the world of Finance. There will always be cunning rogues in it who will separate you from your money without the use of physical force. They are in every city. They are not in prison and are unlikely to get there at all. They don't make money. They pull them out of you. They come up with amazing designs. They frantically scurry back and forth and shout: “Amazing plan! Millions! Millions! Who wants to get a lot of money? Faster! Faster! Come and get money!”.

Such fuss always gathers and will gather a crowd. And people who are quite sane in other matters come up and give these barkers their money. A few months later, the deceivers get the money and the people the plans. A few months later, the crooks are left with the money, and the people with the plans. No law can protect a person from fraud.

It is quite possible that a swindler is showered with golden rain from the money of poor people. Truly gullibility and dishonesty have no limits in the world of Finance. Even the closest friends, even they, spare no effort in inventing ways to move money from yours into their pockets. Even in good old England there are thousands of men and still more women whose natural occupation is to deprive other people of Money.

Therefore, in the world of Finance, it is necessary to have the art of Self-Defence. Anyone who wants to save or spend their money on their own must learn to protect themselves. He must never give in to the pressure being put on him. Each time he must calmly, coolly ask himself: “What will I get? And how will I get it?

Self-interest is not something to be ashamed of. Selfishness is called shameful by predatory parasites who live off the generosity of others. Own benefit is a fundamental value. It is one of the pillars supporting the building of world civilization. The philosophy of gullibility and neglect of self-interest is the invention of beggars, it is also constantly used by thieves.

First earn your own money, then protect it and use it as you see fit - this is the norm of common sense, honesty and the highest virtue! The more fools there are, the more thieves are bred. “Do not steal,” says Moses. But that's only half the law. He had to supplement the commandment with the words: "You must not be robbed."

Once a person has become possessive, he should avoid emotions. He must always have a clear, sober head. He should always come home and consult with his wife. In money matters, a woman is less trusting than a man. She is more suspicious. She prefers to have a bird in her hand rather than a bird in the sky. Usually a woman is more inventive in receiving and more reliable in saving money. A man is an addicted participant in the games of fate, and a woman is a recipient of prizes. Therefore, in all matters of investing money, every man should seek advice from his wife or mother.

There can be no excuse for giving your money to another person just because his argument cannot be refuted. Also, do not give them away when it is difficult to resist the pressure of someone's personality. The only time you can write a check is when you get the full value of your money in return.

It is absurd to pay your own money. if there is a risk. When a person bursts into your office and shouts: “Quickly! Write a check for £500 and give it to me. We'll buy the main freeway if we act fast!" When a man with such a tall tale breaks into your office, calmly tell him. so that he himself buys this entire freeway. When a person comes into your office with a blueprint, an empty pocket, and the words, "Hurry, sign," be dispassionate and draw his attention to the slogan above your desk: "What I have, I keep to myself." Even if you are offered to buy an entire railroad for a piece of cheese. better not give away a good piece of cheese.

In all cases, when it comes to investing your money and you are told: "Now or never", answer: "Never." Be suspicious of haste and urgency in financial matters until you yourself have established the reasons why you need to act quickly. Always when they say to you: “Faster! Give your money, don't give anything. By postponing burning things until tomorrow, you can really miss a golden opportunity once, but in the end you will have more money and less grief.

Be as nimble as possible when you do your own thing, play your game. But when it comes to parting with your money or property, be slow. In one minute, you can easily lose what you have been collecting for a whole year. Never buy, give, lend or invest under pressure.

Rule 3. MAKE MONEY ON PROPERTY AND NOT ON PLANS

In the world of Finance everyone makes money by speculating. Everyone risks. Everyone has his own plans, and by carrying them out, he either wins or loses. Financial activity is all Investment and Speculation And the smartest banker in the world cannot tell where one ends and the other begins. Many Investments suddenly turn into Speculations, and many Speculations become Investments. That is why no laws can abolish either the founders and sponsors, or exchange fraudsters.

One of the main risks in the world of Finance is that every honest, optimistic business initiator can find out at any moment that he is in prison, looks from there to freedom and wonders how he ended up there. Every Financier is a Trustee of other people's money; he is legally responsible for the successful management of their money. In Financial business, safety and risk are so intermingled with each other that no one can ever separate one from the other.

All business starters must take risks. They must speculate and speculate about the future. There is no absolute rule by which one can act safely. But we can give a few recommendations that can warn against the most dangerous miscalculations. One of them says: Make money on property, not on plans.

If you ask: "What is the difference between property and plans?", this is a sure sign that you are not a financier. Property has inherent value, while the value of a plan depends entirely on its implementation. Property is something that really exists: If necessary, it can always be sold within one to two weeks. A plan is an idea. He does not exist materially. The plan is the unborn child. No matter how old or ruined a property is, it is always worth the money. And the most perfect plan may not cost a penny. It can only be the threshold of bankruptcy. The mystery of human nature is that most people prefer plans to property. A possible explanation for this is that any plan always looks perfect. It does not contain the errors of previous plans: It is flawless. He "just can't help but succeed." It has no flaws, it is perfect. The plan excites the imagination. It takes our thought away from all minor details regarding the cost and practical implementation of the project. The plan is hope, optimism, desire. It has nothing to do with realities, difficulties, losses.

The plan is what people want to believe, not what they have to believe. Therefore, plans will always be popular. And the same scam stories will always happen. Each new generation will inevitably throw a certain amount of money into gold mines, oil wells and ranches lost in the tropics.

I don't want to outlaw plans at all. Against. The Bank of England was once the plan. At one time, the Hudson's Bay Company and the famous Lloyd's firm were also plans. And all these enterprises have existed for two centuries. The bottom line of what I'm trying to say is that investing in plans is for those who can afford that luxury. It is not for people with disabilities and limited experience. The chance of failure here is too high. Only about 1 plan out of 50 is successful. Nobody. except for the rich, one should not engage in new plans. But even wealthy people should allocate a small part of their capital to them. Any person must invest no more than 20% of their money in the plan.

Plans are different: good, bad, average. Sometimes they are carried out by the best, and sometimes by the worst people in society. Many plans of well-known swindlers turn into a solid, reliable business. Often the implementation of the plans of honest people goes astray, and the plans of scoundrels eventually become a decent, sustainable business.

It is impossible to determine at the outset whether a plan is good or bad. All you can do if you don't want to lose your money is to stay away from all plans and invest in property. Property may become useless, but it cannot disappear altogether. It cannot, like plans, dissolve into thin air. With good foresight and the ability to sell, you can always turn a property into money or a business that brings money.

Usually a newly opened business is part property, part plan. The confusion here of the real and the unreal is misleading to most people. Every business venture consists of a plan and a property. The danger arises when the plan becomes more than the property. A secure enterprise is like a pyramid: the base is larger than the top. Dangerous - inverted pyramid: the center of gravity is at the top. There is too much plan in such an enterprise. The fundamental difference between property and a plan is that property retains its value, no matter who owns it. While the value of the plan entirely depends on the decency and business qualities of the people implementing it. The smarter a person is, the more he can rely on plans. The harder he thinks, the more he has to deal with property. This is primitive advice, but it could save hundreds of people from failure. In the world of Finance, there is a time for caution and a time for courage. But the first commandment should always be: Study every detail of the plan, the property, yourself.

This advice is not addressed to the strong, the experienced. a self-confident financier who has been successfully doing business in the Financial Jungle for years. But even he occasionally gets caught up in plans that are empty talk. However, in most cases, he is able to stand up for himself. Quite often, he hits the projectors with their own weapons. This advice is intended mainly for a person who is not a financier - for a merchant, a merchant who does not have the opportunity to make large investments. No one should try to run before they can walk. It is worth investing in plans only if you have at least ten years of experience in dealing with property under your belt. A person who knows how to handle property is not so easily misled by talk and promises. A person who knows what houses, land, equipment are. not inclined to chase mirages.

The great truth to remember is that the plan is essentially nothing. This is only a quick way to waste money, unless, of course, there is a person behind the plan who has the experience, ability, honesty, sufficient to successfully carry out the plan.

Rule 4: Invest ONLY IN WHAT CAN BE RESELLED

Don't mess with anything that can't be sold, says the fourth Rule. If you want to know how important it is, ask any famous businessman. Every big businessman has repeatedly suffered losses by forgetting this Rule. For the same reason, thousands of people lost their small savings.

Until you become so rich that you can afford to lose money and not regret it, do not buy a single thing just because you like it. Almost everyone makes this mistake when starting out. He buys goods that satisfy only his taste, and then discovers that they are of no use to anyone but him. And the dead weight goods settle on its shelves. Thousands of people make this mistake when buying land or houses. They retire to some secluded place and build a house. Then, five years later, when they try to sell the house, they find that no one wants it, The house has no market value, and they are forced to either give it away for next to nothing, or wait for years until there is a fool who will buy it for decent money.

In almost every country one can see a strange, abandoned, hilltop house - "Smith's Stupidity Monument". It cost £10,000 to build and sold for £800. Smith forgot the fourth Rule. He built a house that cannot be resold.

A Bristol businessman bought a patent for a device. If the patent is not exploited by anyone else, if the device is cheap to manufacture, and if the public wants to buy it, only then will that businessman make a fortune. He didn't think of those three "ifs" when he bought the patent. Now he wants to sell it, but no one wants to buy it.

There are thousands of such cases. Almost every person with money makes this mistake from time to time - they buy something that they cannot sell later. When buying, you always need to remember! about the following:

1. You can change your attitude towards the subject of purchase. The house you buy today may not please you tomorrow or, more likely and much more seriously, your wife may not like it.

2. The selling price is determined by demand, not by cost or value. The price is what you can offer. Last month I saw an airfield sold for £380 and a postage stamp for £100,000;

3. You can not spend money to please your whims and at the same time think that you are making an investment. You can buy to please yourself, of course, but not before you can afford to throw money away.

4. The more unique and unusual the item, the less likely it is to find a buyer.

The more common and familiar the thing, the more buyers. Ordinary people want ordinary things, and nine-tenths of the people in the world need ordinary people. This is a great truth that so many people completely forget. The more peculiar, original and unique thing, the greater will be the loss in its sale. Surprisingly, sophisticated people fail to understand that everyone tends to make mistakes when they buy. In other words, you need to strive to ensure that, from a financial point of view, your goods are as close as possible to money. The great value of money is that Everyone Needs It. Money can always be exchanged for goods. The ability to sell is an integral part of the value. This truth helps you make money when you sell and save money when you buy. Directly related to the fourth Rule is such a huge factor in its significance as Trust. And the latter is based on Fame. In this regard, we can see how expensive the Unknown is: there is no demand for a thing that no one knows about. In our time, the fourth Rule is of tremendous importance for both large and small businessmen. In a time like ours, you can't freeze money on property that can't be sold quickly. It is necessary to keep the business in such a state that, if necessary, quickly and “without loss, turn it into money. This is an ideal that only a few can achieve. But the closer you are to him, the farther from bankruptcy.

Business as a process consists in exchanging goods for money and money for goods. Goods - Money - Goods - Money - this is a business if every operation makes a profit. If there is no profit. it's not a business. This is a failure. So when you buy something, think: “Can the price be increased, and are there other people who need it?”. If yes, you can buy with confidence. The value of a property depends in part on its ability to be sold. Unless you have money to lose, buy only what you can quickly resell without loss.

Rule 5. MAKE YOUR PROFIT

One often hears: “What a pity that I missed the opportunity to sell this: It may well be that you yourself have already said such words yourself yourself. Many have invariably bought, are buying and will buy just then. when prices are highest. They buy because everyone else is buying. And other people, who are also many, could, but stubbornly refuse to sell at high prices.

And here we come to the essence of what I want to say: in business, the main thing is Profit, and not the Process itself, whatever it may be.

This means that if a merchant can make more money from the sale of his shop than from the sale of his goods, he must sell the shop. If a shoemaker can make more profit from selling his factory than from selling shoes, he should sell the factory.

We are all too attached to our property. We are nailed to it. We treat it as something inalienable, not subject to sale. People Must Think: Nine out of ten people prefer to go with the flow, eking out a miserable existence, instead of Thinking and getting rich. But this book is for Thinkers. The production of money has its own technology, which I am just trying to explain. Very often, a person can make money by doing something outside the box rather than in the traditional way.

We all, at least most of us, could be rich if we lived, for example. a thousand years. From a financial point of view, the challenge is to make money as quickly as possible. We have only 20-30 years at our disposal in order to make a fortune. And that's the whole point. In order to quickly put together a sufficient amount of money, you need to go the shortest way. Not a single profitable opportunity should be missed. Let's take a specific example. A London merchant bought 1,000 shares of one company at £18. Six months later, their price rose to 23. He could sell them. But he didn't want to sell. He said, "No, I'll wait until they go up to 28. Then I'll get twice as much." Now his stock is down to 20. He missed his chance: No doubt it will rise to 28 in time, but he will have to wait a year or two. He would have acted wiser having profited immediately. If I buy a cow for 20 pounds and if a friend meets me on the way to my farm and says to me: "What a good cow, I'll give 30 pounds for it", I will answer: "She is yours." Then I will go home in a great mood, satisfied with such a good day. All too often, many people are overcome with suspicion when they are offered a high price for their goods. “If someone appreciates it so highly, it will be useful to me,” they think. But this is the wrong position. The bottom line is to take advantage of every opportunity to make a sure quick profit. The time factor must be taken into account. Better to make £100 a month than £200 a year.

Once you grasp this truth, you will be on your way to becoming a financier. You will learn to make money by being enterprising: by thinking, by planning, by taking advantage of the opportunities offered by price fluctuations. Small-minded people, like socialists, consider this exploitation. But it has nothing to do with exploitation. It is creative, creative energy. This is leadership. This is a legitimate way to make money, the most useful and least harmful of all used by mankind.

In order to make money, a person must act quickly. He must be able to adapt to different situations. He must devote himself entirely to achieving one goal, one way of life. He must move - act - make decisions - seize opportunities. And every time a profit appears before him, he must not miss it.

There is an old story about a foolish fisherman who caught a one foot long fish. He released her with the words: "I'd rather catch you next year." Better keep it. already caught. Often, striving for more, we lose what we already have. Is it not true that many people do not part with their property for 30 years, and then sell it for money that they could have received a long time ago. It is better to make a small profit right away than to make a big one later. "Later" is unacceptable to such transient and feeble beings as humans, whose active age is no more than forty short years.

Life is short. The future is always uncertain. Therefore, do not miss any of the opportunities that the Present gives.

Be quicker in making profit. Every little piece added to what you already have makes you richer. Get Your Profit.

Rule 6. LISTEN TO YOUR BANKER

There are no maps or roads in the Financial Jungle. Most of the time spent here, one feels like a traveler who has gone astray. But there are people who have spent their entire Life in this Jungle and who therefore know their laws and dangers. In this sense, you can rely most on bankers. The sixth Rule can save you from big losses.

The jungle is teeming with people who are willing to be your guides. They assure that they will find a way out of any situation, advise on any issue. Almost as soon as you step into the Jungle... with a stuffed wallet, you are bombarded with offers of various kinds of help. Hundreds of people who themselves are hopelessly lost in the Jungle offer to take you to the Pile of Gold. This is one of the most mysterious laws of the Jungle: mediocre losers offer to show you the way to prosperity, and rogue duds are eager to make you rich.

In the Jungle there are almost no disinterested services and advice, it is better to know and remember this before you enter the Jungle. As soon as your wallet starts to empty, guides and advisers disappear. And you are on your own. The fact is that when a person finally got lost in the Jungle. he usually becomes a conductor himself, or, in other words, a broker. What do you think, if the latter really knew the way to the Pile of Gold, would he show it to someone for a penny reward? Never.

If reliable advice is needed, the last person to go to is a broker. This truth has not yet been proclaimed in all frankness, but, as you will see for yourself, it is generally true. If there is any doubt about this, then you can ask anyone who has been buying and selling shares for twenty years.

This does not mean that brokers are dishonest people: but they have their own logic. With little enthusiasm for what Moses taught, they adhere to their own Ten Commandments. Their First Commandment; "The client is at risk." The broker never thinks about reliability. He thinks only of the Process itself. "Go ahead," he advises. It doesn't matter if it brings profit or loss: "Act." No broker wakes up at night thinking about former clients sent by them to workhouses. Otherwise, there is no doubt that all brokers would have died of insomnia.

An ordinary broker, like his clients, is guided by rumors, and not by any rules. He fusses. He rarely studies national trends. He has no plan, no map, no! compass. He simply follows his clients, whom he himself is called to lead. He is not a guide at all. He is a companion. If you learn this, then you can very well use the services of a broker. He is a quick doer of what he is told. He carries out orders, encourages, tells the news of the day. makes transactions. but does not act as a Conductor.

There is another kind of people in the Jungle. They do not pretend to be guides, but they know more than guides. These are the Bankers. The banker is the custodian. This is a person who protects money from losses. He is Reliability itself. If he does not know the paths in the Jungle, then at least he knows how to protect himself from the dangers that lie there. He spends his whole life studying their signs. Moreover, the banker, if he wants, can get out of trouble. In this he is far superior to the broker.

The sole purpose of a broker is to keep his clients constantly in a state of buying and selling. While the main desire of the banker is to protect clients from losses. The services of a broker are paid by a commission from the sale, and the banker receives a salary. It is an indisputable fact, which cannot be denied, that it is the position of the banker and no one else that most of all obliges him to give disinterested advice.

Very few depositors use their banker. I myself had a bank account for ten years when I was young before I asked for a loan, and I consulted my banker for the first time about investing money after fourteen years. In my younger years, I turned to a broker and a house salesman for advice. The first one made me lose £250 and the second I lost £120. Here's what I needed to learn is that you should never take advice from a commission.

Broker sets the Jungle in motion. And this, of course, is a very useful feature for the Jungle as a whole. However, I am not going to make general statements here. My goal is to tell the reader of this book how to save his money and make it work for him.

When you turn to a banker for advice, you win doubly: there is a chance to get wise advice; the banker's opinion of you improves and his confidence increases.

A banker is a kind of observer in the financial Jungle. He has no reason to deceive himself or his clients. He is busy researching the state of affairs and does not fit into other people's affairs. He can't tell you how to make a 12% profit, but he can tell you how to make 6. He can't tell you how to double your capital, but he can tell you how to securely keep what you have. He cannot show the way to the Pile of Gold. although he knows that every once in a while someone accidentally or knowingly finds her and becomes fabulously rich. He knows too much about the Jungle to call himself a guide.

A banker always conducts business reliably. Therefore, he is the best adviser for novice investors. There comes a time when a person is so firmly on his feet that his business no longer requires the advice of a banker, but this happens infrequently. Especially in our time, I would recommend that every businessman rely on his banker for everything. Today the banker is the central figure. He carries the whole world on his shoulders. Ultimately, all the international financial problems that politicians talk about so much are solved not by Parliaments and Congresses, but by bankers. The banker protects the people's money, and he must occupy an appropriate position in society. It is he who should determine the decisions made by politicians. He's not just an accountant. He is a Guardian. He is the Guardian. He is the Leader. Regardless of whether he wants it or not.

So our sixth Rule is: Listen to your Banker. Rely not on your own meager Experience, nor on the advice of those who can Profit from your Losses.

Rule 7. BUY DOWN AND SELL DURING UP

The rule is just a few words, but if you can put it into practice, you will do A fortune. It is easy to talk about it, but there is hardly one person in a thousand who has the courage and independence to do this.

Almost everything is bought and sold looking at the crowd. Even the stock exchange and the money market are subject to the Crowd. And even bankers and stock market dealers do not make independent decisions.

There are always two crowds in the investment market: a crowd of buyers and a crowd of sellers. And when a person enters this market, OR invariably joins the larger crowd. And this is one of the main causes of losses. We all, at least most of us, are subject to the herd instinct. We follow the crowd, the larger crowd, like animals. We do what others do because it's easier and more convenient. We do not want to be known as eccentrics or proud.

In a word, we go with the flow. In Finance, we act in the same way as in politics, religion, public affairs. We are passive. We allow neighbors, fellow citizens, the press to push us around.

Most of all - to the Press. It was the Press that made the crowd commonplace. Editors and reporters think with their heads not more, but less than others, but they sell their chatter. Whether or not they know what they are talking about, they have to say something every day. This incessant, obsessive chatter influences the crowd. Most people don't think. They only read and therefore it is easier for the Press to easily manipulate them.

A strange, and, however, not entirely reliable fact: most people throughout their life path - from the cradle to the grave - do not commit a single independent act. All their lives they follow the crowd. They had a generally accepted opinion in their heads that it was calmer that way. This is true in politics and communication, but not in Finance. In Finance, the Crowd Always Loses. This fact is known to few people, and those who know it keep this knowledge to themselves. Few win in finance. And they do it because they follow the prices, not the crowd. Finance is the exact opposite of Politics. How few businessmen realize this. Finance is of little concern to the opinion of the majority. Prices are not set by vote.

At the same time, it is true that public opinion causes price fluctuations. When ten people want to sell shares in a company and there are only five buyers, the stock price drops. And when twenty people buy, but only five sell, the price goes up. But the smart saver does not buy or sell with the Crowd. He watches from the sidelines and uses price fluctuations.

In Politics - join the majority and win. But in Finance one must be in the minority if one wants to learn the difficult art of Investing and Speculating. Never buy when there are more buyers than sellers, otherwise you will probably overpay. Never sell when there are more sellers than buyers. Otherwise, you will inevitably earn a penny. As a millionaire once told me, "Get Yourself a Straw Hat in Winter." Buy when it's fashionable to sell, and sell when shopping is fashionable.

Prices always fluctuate a lot;! There are always booms and busts. Every boom is followed by a depression, and every depression is followed by a boom. The crowd never, of course, looks ahead. The crowd always turns out to be fools. She only thinks about today. This is why most people buy high and sell low. They believe that existing in the market. the situation will go on forever.

Most are optimists during the boom and pessimists during the depression. Of course, this is the easiest. But the one who makes money is a pessimist during a boom and an optimist during a depression.

Always buy from Pessimists. Always sell to optimists.

This is the otherwise formulated seventh Rule. It means standing out of the crowd and taking advantage of the opportunities that price changes present. The few people who have the courage to do so will become rich and deservedly have everything they get. They are Market Stabilizers. They protect against those situations when the crowd gives in to panic and sweeps away everything in its path. This is how any crowd usually behaves. Eliminate independent businessmen from the exchange - and it will be closed in a year. Either in a boom or a depression it will be wiped off the face of the earth. Every crowd needs to be stabilized. This is what leadership is basically. The atoll on the stock exchange needs to be stabilized in much the same way as in politics. Just as the purpose of the Press is to excite the crowd, the purpose of the wise, strong, patriotic stock trader is to “make the crowd calmer and more sensible. And sometimes it happens that he gets good money for it. The mystery of human nature is that when prices are high, we think they are bound to go even higher. And when they are low, we think they will go even lower. The truth, of course, is the opposite. If the price of any commodity rises, this is a sign of its imminent depreciation. And if something becomes cheaper, then a price increase will follow. Prices move up and down all the time. They are affected by the events, hopes and fears of the whole vast world. Prices rise above and fall below value, but they rarely disappear altogether. Usually, both the hopes and the fears of the crowd are exaggerated. As soon as the hype subsides, prices return to the level of value. He makes 200% profit per day. How? Making your money and goods constantly in motion. He starts in the morning with 1 shilling. Buys 20 newspapers and sells them for 1 shilling and 8 pence. He does this three times a day. As a result, by the end of the day he has 3 shillings. He sold 60 newspapers and made 2 shillings in profit.

He is equally a capitalist and a worker. He does not have an employer, he finances himself and receives a reward based on the final result. He is not a financier, because he spends both money and his Labor. But he is not a depositor either, because he can get his money back for unsold newspapers. His work is the best illustration of how important. to keep money and goods in constant motion. He earns £30 a year by investing one shilling and working hard. That's £5 more than what he could probably get at a regular job; and he only works 3-4 hours a day.;

Let us compare him with a jeweler who has a capital of £5,000 in jewels and sells them in the course of a year. The newspaper boy turns over his money 600 times. while the jeweler barely does it once. That is why there is so much more glitz in the diamond business than there is profit. Until 1971 English shilling = 12 pence.

Thus, the eighth Rule brings us to the grasp of the great law of Finance: The movement of capital is of far greater importance than its magnitude. Does your capital turn over in a year, a quarter, a month or a week? There are two firms in Lancashire nearby. One has a capital of £8,000,000 and 18,000 employees. the other, a capital of £800,000 and 800 workers. Last year, both firms had the same profit. This happened because the smaller one was more productive and turned over its capital 26 times a year. A baker can do good business with ten times less capital. than a jeweler. He can do it. because very quickly he turns his flour into bread, and bread into money. He sells his entire inventory almost every day.

One of the common reasons why most firms make low profits is because they have too much money to hold. Too many items are on the far shelves. Too much unused equipment. Too much supply of raw materials. Too many buildings. All this means dormant capital. It's a kind of paralysis.

It often happens that two-thirds of the firm's capital is dead and the burden falls on the remaining third. There is no benefit in holding on to a commodity, except when prices rise. The value of a piece of equipment or a building depends on its use, not on THAT. HOW MUCH THEY COST

The world of business is filled with expensive, but not profitable things. It is better to have a functioning motor of one cat power than a non-working motor of mammoth power. It is better to take 200 pounds and put them into continuous circulation; than having 2,000 pounds of slow-moving goods. The essence of Business is Exchange. Money for goods - goods - for money, money again for goods! And you need to do it quickly. This is the secret of big dividends. The rate of return depends more on the speed of sales than on the height of prices. It is more profitable to make 5% per month than 30% per year. This is known to all usurers, but not to all merchants. That is why there are so many merchants who have a dead stock of goods and exceed their credit.

Money is like the human mind. It used to be thought that the more a person has a head, the smarter he is. But today we know that this is a delusion. A person may have a very large head, but if he is slow and lazy, he is a fool. The main thing is not the size of the head, but how it works. Many people with small heads run large companies. At the same time, many people with large heads serve as postmen, earning a living with their feet. Almost always, when I ask a businessman what he needs most, he answers: "More capital." Usually. this is a mistake: it is necessary to accelerate the use of the capital that is available. Any man can double his capital without borrowing a penny, by simply doubling the rate of turnover of commodities. It is better to learn how to sell than to pay interest on capital. It's cheaper to advertise your product than to incur overdraft costs.

The rule of a successful salesman should be: "Buy - sell, buy today - sell tomorrow." And this rule is useful for both financiers and traders. Don't buy or build too much. Always have more customers than goods, more business than offices. It is better to refuse a buyer than to overstock. The store is a transit point, not a military arsenal. How few merchants understand this!

Always keep money in circulation. Each shilling is a small, working one. It is necessary to make sure that he works, and does not sleep, finds a use for himself and returns after a few weeks, leading a new small coin.

Rule 9. TAKE WHAT YOU CAN INVEST IN THE BUSINESS

Muster up the courage to take out a loan is the advice most needed by thousands of businessmen.

Many businessmen are terrified of debt. They do business using only what they have. They are reinsured. They go out into the open ocean of trade and commerce on a small ship, the name of which is "Cash", trying to stay close to the shore. They are so close to the coast that they run into the rocks, and that's it. Later they learn "that there are more rocks near the coast than in the open sea, and in depth it is much safer than in coastal shallow waters.

Since I speak the truth, I must say to those who want to do business “safely and avoid risk, and this is available only to born financiers. By avoiding risk, you may keep the money your father made, but you will never make your own great fortune. To a financier to conduct only non-risk business is the same as a lion hunter not to go on a dangerous hunt and a steeplejack not to endanger himself. The financial world is full of risk, and neither I nor anyone else can tell you how to avoid it. An experienced lion hunter can give valuable advice to a young one, but all hunters have scars on their bodies; one should not have any illusions about this. Ultimately, the most profitable thing in business is taking smart risks. You can ask any insurance company about it.

One must have sufficient courage. He must have a sports interest. Taking risks, he should enjoy. A person who, having borrowed money, does not sleep at night, it is better not to try to become a financier. He should remain an employee, quietly working on a fixed salary. But once he has tested himself and is convinced that he can successfully manage other people's money, you need to go and borrow as much as you can invest in the business. Andrew Carnegie, a man who made a £70,000,000 fortune in the steel business, once told me that when he started, he borrowed as much as he could find. “I was the richest debtor in Pennsylvania,” he said. - One of my companions was specially engaged in the fact that he went to banks and took loans wherever possible.

Almost every rich man will say that he owes his success to the money he borrowed for a reasonable purpose. Some firms finance themselves from their own income. But this is not a financial activity, but something completely different. This is Commerce. I recently met a businessman on a train who told me that in 27 years he had not borrowed a single penny. He told me this with pride. He has a small factory with 50 employees. His net income does not exceed £1,500. That's good enough, but the bottom line is that it took him 27 years to get his business up to the £1,500 mark. If he had borrowed £5,000 to begin with, he would have reached that level in at least a quarter of the time. He did not take into account the time factor. He spent a lifetime doing what could have been done in 5 years.

Nothing is cheaper than money. Hiring Labor brings very little profit. After all, hired labor as a whole does not pay off its wages. Profit gives Equipment, Selling skills, Advertising, Personal Management. Money and Brains - that's what makes money in every branch of business.

Hiring a worker is profitable only if he is attached to a car bought for money. She will pay for herself. It will pay for the worker and still bring a small income. With money you can provide Machinery, Equipment, Advertising, Mass Production. With money, you can launch into business all the profit-producing factors, except for Mind. Therefore, if a person is sure that he has Brains, his next step should be to get Money.

If he can get them without borrowing, that is best. But if not, then he should take them. Who? Of course, not the moneylenders. No one will come close to them, except when there are no friends or the situation is really desperate. Money taken from a usurer can never bring any profit for the simple reason that 10% must be paid for it every month. Moreover, the moneylender's office is most often a trap, with the help of which everything that is possible is squeezed out of the victims.

No, you need to get money in the cheapest way possible. You don't have to pay 7% if you can get enough for 6. The difference is £100 a year for every £10,000. If possible, take money from the bank. The business of banking is precisely to lend money. The bank will offer better terms and be (more merciful in times of need than any friend or relative. Banks are somehow thought to be cruel and heartless. In fact, they are not. The last thing a banker can want is the ruin of one of his clients. If it is not possible to borrow money from a bank, this should be taken as evidence that it is not worth borrowing at all. A banker is a sophisticated specialist in lending money. He knows when to give and when to refuse.

Of course, every person should to have some funds of your own before you dare to ask others for money. But once you are convinced that you can handle money efficiently, it is better to borrow more than you can earn in a lifetime. If you want to make more money faster, follow the eighth Rule, and Borrow as much as you can put into the business

Rule 10 you, because they did not attach importance to this Rule. They did not distinguish Development from boasting. Growth means growth in the actual size of the business, while bragging means embellishing it. Growth is about growing the size and capability of a business when it needs to be sold. Bragging is about getting attention and making an impression.

If a printer owner finds that he is losing £4,000 in orders every year because of a lack of fresh press, he should take out a loan and start new newspapers. If a jeweler sees that he could sell more jewelry if he had a larger stock, he should take out a loan and buy more diamonds.

There is such a thing as growth compulsion. A growing business is like a growing child. He cannot remain in the cradle all the time. It should have more space. In contrast, boasting only creates appearances. It embellishes reality. This is what we would like to have, not what we really need. Buying an umbrella is a must. and giving money for a cane with a gold head is a bluff.

You should never borrow money until you are sure that spending it will not only pay for itself, but also bring a good profit. If you borrow £10,000 at 6%, you must make at least 16% profit on this money.. You are right when you borrow to buy shoes, and you are wrong when you borrow to buy socks.

Quite often I have visited small, overworking factories and shops, sparsely equipped with machines and other equipment, whose owners, meanwhile, drove me to dinner in luxury cars. How often have I wanted to say: "Sell the car and buy a couple of new machines." Often I met people who lived in beautiful houses, their cupboards shone with silverware, and their offices did not even have normal heating and lighting. If I were the owner of one of these factories, teetering on the brink of collapse, I would sell the house, sleep on the boards in the office, putting a simple bag under my head instead of a pillow and covering myself with a raincoat instead of a blanket. I would cook my own food on a kerosene stove, save £75 every year and invest in the business. Then, when I had accumulated enough property, I would take the maximum loan and invest everything up to a penny directly into the business. Only in this way can a proper start be made to a business - to create a viable stable business that will not collapse at the first test.

There are too many people who enrich themselves and impoverish their businesses. Their wives and friends gradually push them into more and more expenses, until at last the exhausted business lets out its dying groan and expires. Every big businessman, starting his own business, thought first about him, and then about himself. Sometimes, in their younger years, industrialists sleep in workshops, merchants under the counters of their stores, farmers spend the night wherever they can - in shacks, in the field. Just as a general thinks about his soldiers first, so a businessman takes care of his business first. When a business needs money, you can't take a penny out of it. It is better not to receive a dividend than to damage the business. In a word, you need to be a Spartan in a certain sense of the word in order to start from scratch and make a fortune in a short time. There is no easy road here, except for those cases when luck smiles at the businessman.

And one should avoid showing off as in business. as well as in personal relationships. The main thing in business is not what impression it makes, but what profit it brings. It is better to have a prosperous business on a skating rink or in a stable than a loss-making one in a building of glass and concrete. Doubling the sign does not double the business. In fact, it only increases business by 30-40%.

New buildings! That's what dozens of firms go bust on. Undoubtedly, business must be done with a good roof over your head, but the truth is that the building matters much less than we give it. For example, a firm with an attractive building in the center did not turn a profit last year, while the old shabby house that houses the Bank of England continues to be the center of world finance.

Ask any seasoned businessman if every new building brings anything but frustration./There aren't many businesses that have failed because they squandered a lot of money on new buildings. I know at least three merchants who are willing to give a year of their lives to move out of new buildings and find themselves back in the old place;

When your daughter marries a young ambitious architect, be careful. Soon you will be overcome by building mania, and this is a dangerous and costly disease.

As for me personally, I do not remember more than two cases when I recommended the purchase of new premises. Almost always, I found that the firm did not use the full potential of the building it had. Why then, in fact, to build a new one? Of course, a new building may be needed for expansion. If so, then you can build. But you need to be sure that this is really the case. One of the most common mistakes in the United States is to fill a business with bluff. Often an American firm erects a new building, only to discover later that it is a mausoleum for a lost business. Many American railroad companies built stately marble buildings for train stations, only to find that it didn't add a penny to their income. Why all these conspicuous stations and train stations? They are not built for buses and trams, which, by the way, carry more passengers than any railway. There is also such a thing as throwing money away for a fancy office and a bloated management apparatus. All this is an add-on that increases costs, not profits.

Every business, as it expands, is in danger of becoming decorative at its peak. Every business accumulates extra people and machines. But you can not borrow a penny to pay the costs of their maintenance. All borrowed money should be used productively. If this does not happen, then this money does more harm than good, developing the habit of indulging one's own quirks.

Business is encouraged by Her Majesty Profit and Her Majesty Pride. If you take a loan for Profit, everything is in order. But if you borrow for Pride, your business is in danger. Borrowed money either lifts you up or brings you down, depending on how you use it. This is why you should borrow for Growth and not for Boasting.

Rule 11. NEVER LEND

In this Rule, at the risk of being called heartless, I'm going to talk about the dangers of lending to friends. If any writer had shared these thoughts with me 30 years ago, it would have helped me save a substantial sum and half a dozen friends.

The fact is that as soon as it becomes known that you have money, you begin to face a number of difficulties. Parasites appear. An entire Encyclopedia could be written about these Parasites, and they come in all sorts of forms and ranks, from complaining half-drunk street vagabonds to magnificently robed ‘bishops’. They are relatives, friends and strangers. They are men and women. They are honest and unscrupulous. They deserve and do not deserve indulgence.

All of them are united by the goal - to take your money. No doubt about it. They are all parasites! Women with the faces of saints! Dignified gentlemen with refined manners! Nephews, nieces, uncles and aunts! All with outstretched hands and fixed eyes on your pocket.

The Parasite cannot be identified until the moment of revelation comes and he offers you to move some amount from yours into his pocket. There is no known way to avoid both respectable and wretched beggars. It was a shock to many businessmen to discover that their only Son had the makings of a Beggar.

In this world there is an ongoing war between the Creators and the Beggars. This is a war to the bitter end. The beggars have already ruined the Roman Empire, and their power is so great in the British that no one can tell at the moment. what will be the outcome of this war. Every Creator businessman is surrounded on all sides by Beggars, like a lion in the Jungle, accompanied by jackals, who wait for an opportune moment to steal a piece of his prey.

Happy is the Creator who marries a woman who is also a Creator by nature. He can be sure that his successes will not be crushed. And as for the Creator who marries the Beggar, then, God, be merciful to him! Despite his intelligence and energy, in the end he will be broken.

The Creators must protect themselves from the Beggars - this is the meaning of the Eleventh Rule. Once you've opened a bank account, you don't have to get callous; but you must learn to say no. Keeping money is as hard as getting it. Every wealthy businessman knows this. That is why rich people are so unsociable. They have to always be on their guard. They are compared to hedgehogs curled up in a ball. And this is not surprising! Regardless of the size of his fortune, a person will immediately lose it if he loses his vigilance. I once knew a man who found an iron mine and sold it for 500,000 pounds. Then he went to New York and lost everything in 6 weeks. There are no limits to the gluttony of Parasites. The more they get, the more they demand. They are insatiable. If a wealthy person wants to keep his wealth, he must keep his capital intact. Whatever he gives or lends reduces his income. He should not accept anyone's pleading notes, no matter who they come from. Under no circumstances should you sign any blank checks. He should not have a joint bank account with anyone, even with his wife. One must keep aloof from all disputed Money matters. For nothing reveals the evil side of human nature so much as litigation over money. Leave the bankers and usurers to lend money. They know how it's done, but you don't. They know how to defend themselves, but you don't. It should be noted that professional loan sharks usually charge 10% per month. It is quite possible that they are forced to do this in order to compensate for their large losses and high expenses.

To lend money means to do something that is not clear. To lend is neither to give nor to invest. It brings you no thanks, no chance of profit. This is worse than betting, because when you lend, you are not interested in sports and you cannot be lucky. If your friend is trying to borrow money from you, ask him why he didn't go to the banker, and if he admits that he "had a loan," don't give him the money. Or better yet, buy a small stake in his business, just enough to get him out of debt.

It is always better to invest than to lend.. If you become a co-owner, you get the right to make offers, participate in income. If your friend's business goes well, you will receive a share of the profits, and not just your 6% debt. If it fails, you will at least get some of your money back. As a rule, people who borrow money from their friends are generally reliable. A self-confident, independent person will never let Friends know that he needs Money If the person who applies for money most likely does not deserve to be given a loan. And the one who deserves - does not apply. In all cities there is a certain type of human - people without conscience. In relation to their debts. They are shellfish. They live carefree; everything that is needed in life is given to them easily, without difficulty. They may have a good education, attractive appearance, etc., but they are all, in essence, beggars. They beg for fives, and cigarettes, and invitations to weekends. They are just dressed up tramps, and they cannot be trusted by self-respecting people. Such Parasites lack the courage to become thieves. They stay within the law. But they deprive people of more money than thieves. Surprisingly, it is a fact that lending money to a decent person most often spoils his relationship. When you lend, you always lose a friend; it usually happens that way. No one has yet written a book on the psychology of ingratitude, yet it is a very interesting subject that deserves attention. The lender is never liked. And it's very strange. Once you "loan" a friend, you stop being "your boyfriend" and become a ruthless pawnbroker. Debts always oppress a person, and he accuses you of putting this burden on his shoulders. Although this is stupid and illogical, but this is what happens in the minds of most debtors in most cases. Friendship is based on equality and reciprocity, but is destroyed by philanthropy. If I invite my friend to a restaurant twice and pay for him twice, then our friendship is threatened. There can be no friendship between superiors and subordinates. This is a law of human communication that cannot be ignored. From a moral point of view, you do harm to a person by lending him a loan just because he asks you about it. You weaken his self-confidence and his self-respect. He asks for money, but in the end he doesn't need money at all. Don't be deceived about this.

The truth is that we lend too much and too rarely just give. Very few of us do the latter sufficiently. We need to give more often, we need to give to those who do their best for themselves.

Rule 12. BET ON A WHOLE INDUSTRY AND FOLLOW PRICE VARIATIONS

This Rule will mean a lot to those who can understand and use it. For a number of years, I have considered this Rule as a retirement and a very exciting activity.

This is my own Rule, which I have not yet made public. This is the System. Not only will it make money for anyone who dares to use it, but it will also benefit society by preventing too much boom and bust in production.

The meaning of this Rule is as follows. There is always an industry that is in decline. It can be the production of either cotton, silt and rubber, or iron, or oil, or wood, or jute. And there is always at least one firm in this industry. which is known. that she is reliable. promising and well-funded, a company with a large reserve. This firm must have common stock. It is more profitable to buy common stocks because they rise higher and fall lower than other securities.

During a downturn, the firm, along with the rest of the industry, goes downhill. Its common stock is reaching its nadir. No industry is constantly in decline. All industries have their ups and downs. And when your industry goes up, first of all your stocks will go up. So if you buy the common stock of the best firm in the worst industry, you can be as sure of a profit as you can be of anything in this world of risk. And note that you're betting on an entire Industry, not a firm.

Of course, this Rule is for the few who have the money and the nerve to gamble. I'm not worried about the fact that now many people will use it. If the lion hunter tells the secret of how to kill them, there will still be no pandemonium in the Jungle. Pure knowledge alone means little. The results are given by Active Knowledge. And there are few people of action. People are usually inert.

In a daily newspaper, I would write: "Keep your savings in the bank and be content with your 4%." But this book is completely different. I write for the Worthy Few, my regular readers and personal friends. And my goal is to equip them with the skills to make more, faster, easier and more enjoyable money. Usually, when I am asked for advice on how to play the stock market, I answer: “If you want Reliability, buy Government Bonds, if your goal is to Make Money, take Preferred Stocks, for Sports, Common Stocks are suitable. This twelfth Rule is more than advice. It points to a certain sensible way to make money by taking advantage of stock market fluctuations. The stock exchange is one of the most useful and amazing phenomena in the world. This is the highest achievement of financial civilization. Fools do not like her, and weaklings are afraid. Both of them have good reasons for this. And it is not intended for fools and weaklings.

Stupid writers write about the stock exchange, that wolves eat sheep there, that it is a jungle in which traps, traps, and dangers lie in wait at every step. “Stay away from the stock market,” these people say. “This is a place where they rob.” You might as well say, “Stay away from the Hyde Park area. This is the place where they kill: last year, nine people were hit by a car here.” Yes, the stock exchange, like the Hyde Park area, has its dangers and accidents. To avoid them, you need to be careful and be careful.

There are such places. which are intended only for the Strong, and it is better for the Weak to bypass them. The stock exchange is one such place. The Stock Exchange is nothing but the Market. This is a place where you can immediately buy and sell securities. There are over 6,000 different securities listed on the London Stock Exchange that can either be bought or sold.

The stock exchange is as necessary as the railroads and shipyards. If you destroy one today, another will appear tomorrow. The exchange is even bigger than the market. It is a barometer of trade and commerce. Every businessman should study it and subscribe to one of the daily financial newspapers for this.

The Stock Exchange represents public opinion. It gives information about signs of the times. It gives you a glimpse into the future. She is the first to receive all the latest news. She is always moving forward.

Exchange prices do not reflect value. They reflect existing trends and perspectives. They express the hopes and fears of the smartest people in the Financial World. No individual can be smarter than the Stock Exchange. And none is stronger. No one can artificially form prices, as they write about it. Sometimes some clever businessman tries to pull a trick with prices, but the market nullifies his efforts. | Prices are always in motion. They are influenced by all events and ideas in the world. Harvests, weather, strikes, wars, bank rates. the budget is what pushes prices up and down. Prices are driven by facts and fiction, fears and rumors, desires and worries.

In 1922, the price of common industrial shares rose on the London Stock Exchange from £278,423,377 to £388,286,961. The increase was over £109,000,000. All this profit went to those who were smart enough to keep faith in our industrial system. Those few. who had the audacity to take the risk of buying common industrial shares in 1921 instead of war bonds and government bonds, made £109,000,000 in one year, not counting dividends.

Thus, to make money is to notice the difference between the Existing Price and the Real Value. The most successful are those who are indifferent to what they say and are more interested in the real value.