THAT women should not deal in speculative offerings is the unanimous decision of many leaders in the world of finance. From time immemorial women have been acquiring the art of spending money, but they have not been trained as thoroughly in the ways of finance. Speak to any woman who has worked in a broker’s office for a number of years or to a broker’s wife or to any girl who has been connected with companies interested in the promotion of stocks, or the sale of speculative shares. The answer in every ease will bear out the decision. She will tell you emphatically to keep out of the stock market and will advise you to purchase nothing but “gilt-edged” securities and will head the list with Government, Municipal and provincial bonds.
Would she gamble? Would she take a chance on buying oil shares when told of the numerous fortunes made by prominent citizens? What about ihe spirit of the gambler and the old adage “Opportunity knocks on everybody’s door once?” But she is firm in her convictions because her experience has taught her that while a few speculators “clean up” a small fortune, to every success there are approximately 500,000 failure^. Her advice is sincere and comes straight from the shoulder and strikes at the root of the trouble of the increasing number of vanished bank accounts.
Consider the questions from the girl’s point of view—that is the girl who has been acquainted with the leaders themselves. With her many years of experience her daily contact with the ever changing quotations and her store of knowledge of the various companies, it will readily be seen that if any woman should make money it is the girl who has studied the market and worked in the business and in the confidence of the leaders themselves. Relatives of the broker and friends of the Kiri who has helped to promote companies should also be very wealthy if there was money to be made, but according to statistics it is more common that these people will warn you and will themselves invest in safe and sound securities.
Of course, speaking of gambling in the stock market in a general way, no person knows how the market is going to act. This is an absolute fact, and if any person knew he or she could make their fortune overnight the spirit of the gambler would at once be eliminated and the stock market would cease to exist. There are occasions when directors of companies are aware of certain announcements that will affect the markets, and this is one of the unfair advantages in the game. It is a common practice that directors and their friends are “tipped off,” that a certain announcement, probably the passing of the dividend, will be made at the next meeting. The intention is to »ell before the market is affected and in order to gain a few points a report is circulated that there will be an extra bonus or some other evidence of excellent financial standing. The stock advances as the result and those “in the know” sell. The meeting is held and the news affecting the stock announced, with the result that the stock takes a drop. When the directors and their intimate friends consider that the stock has dropped sufficiently low they will buy back their holdings and will have benefited by the rise and the
This is only one of the many phases of the situation that influences the market, but in a general way no person can tell truthfully which way the market is going to act. Many can predict and judge the action by the business conditions generally, but their opinion can never be taken as positive.
It is impossib'e for any woman, or man in that sense, to make a permanent success of speculation on the basis of “tips,” or “ inside information” or even on the advice of others no matter how well posted the particular poster may be.
In the first place, tips are illogical. They are given out only for the purpose of enthusing the credulous gambling public. Tips frequently prove correct—if this was not the case they would have no potency at all. Also the recipients of tips often make them good by their own operations. In the speculative “War stock” excitement of 1915 tips were frequently given out broadcast and the excited public pushed prices up by their own competitive bidding.
Inside information is also illogical when it is given out broadcast. If the manipulators or promotors of price movements were to take the public into their confidence they would ruin their own campaign. The inside information comes only when the real insiders are ready to dispose of their holdings to outsiders.
Will Gamble Whether or No
DUT the fact remains that with inside information given and tips and advice handed out broadcast women will gamble, and there is hardly a day passes but editors of newspapers and magazines throughout the country are literally “snowed under” with enquiries regarding certain stocks or shares and the distressing fact is that they all arrive after the stocks have been bought. Many of the readers have purchased stocks in new companies and in this case it should be remembered that out of every hundred new concerns incorporated 95 are hopeless failures, three continue for a five-year period and then go into liquidation, while two are successful. It is much better to wrait and be assured of a small dividend when the company is established as a success, than to invest too hurriedly on the basis of the promises of fortunes when the company is being formed. Even in the case of the successes it has generally been found that
the stock could be purchased much cheaper two years after the company was organized than at the start of the concern.
There are two types of women who play the market. There is the guileless type—the women who has been left or who has managed to save up a small sum of money and regards the stock market as a sort of benevolent goose that lays golden eggs for the widowed and fatherless. Then a person of this calibre sees an advertisement offering 200 per cent, on money invested with “absolutely no risk —quick returns—money back if not satisfied—the opportunity of a life time.” She immediately sends for the-prospectus and invests everything she possesses and emerges from the experience with no dividends except a belated understanding of some of the devious ways of the world of finance.
The other type is the sporting type— the flashily dressed, hard-featured young woman who haunts brokerage offices of the less reputable type. The conversation of this woman is generally as sophisticated as her appearance but she is in reality as innocent of finance as her guileless sister.
A typical case is that of a woman who carried on business with one of those companies for whom the Blue Sky law was inaugurated. She decided to negotiate with another firm that was well established and reliable and was about to give an order for some investments when she suddenly changed her mind and returned to the first firm. Questioned later why she had changed her mind when in the middle of a transaction, she said: “The salesman at the other broker’s office had such a nice, kind face and I thought he would be angry if he knew that I had taken my business elsewhere.” Unhappily the face belied the firm and the lady was left to regret her indiscretion. It is not a sound policy to trust one’s competence to a young salesman who prophesies smooth things just because he happens to appear as a possible candidate for a movie star.
“Do any of your stenographers invest in the market?” was the question put to one of the leading brokers in Toronto recently.
“They certainly do not, and if they follow our advice they would not gamble or speculate in any manner. But they never ask our opinion because they have been convinced that unless a person can afford to lose they should never speculate even in a ‘so called sure thing.’ A few months of business training and most women will readily' see that the best investment they can make is Victory or Municipal bonds.”
Practically any of the larger brokerage houses or financial men will give advice to women or others seeking information on the markets or investments, and many men render good service by giving straight forward and unbiased opinions. But not all of the persons enquiring desire to buy stock. A few weeks ago a Toronto bond house received a letter from a farmer’s wife seeking information regarding a bond issue in a western town. The bond house was out for business and sent a salesman post haste to interview the lady. After a long train trip and a journey of ten miles over a rough road in a Ford taxi, he finally reached the enquirer and found her engaged at the washtub. She greeted him gladly but told him that she did not wish to buy any of the bonds but was interested in the town because she had a daughter there and wanted to read all about the street she lived on.
Of the various callings followed by women, school teachers are the most wary and very fewr ever take a “flier” in the stock market. They usually place their savings in real estate. According to statistics, widows and doctors are the most gullible and make up the largest number of “victims.”
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