THE “TIP” TO BUY OR SELL.
[Sidenote: A FRIENDLY “TIP.”]
[Sidenote: UNLOADING AT OTHER PEOPLE’S EXPENSE.]
A fool and his money are soon parted, is an old saw, and it is in a
high degree applicable to the inexperienced speculator who operates in
the markets on a friendly “tip.”[41] It is marvellous to think how many
persons daily and hourly are misled by the same snare and delusion.
If a man, who starts off in an excited state to instruct his broker
in consequence of having received the “tip” to buy a certain stock,
pauses for one moment to reflect, he can hardly fail to doubt the
disinterestedness of the communication. Take an example:—In the first
place a man who gives a “tip” to another to buy some of a certain stock,
must have some motive for so doing. No human being wanders about with,
what he makes out to be, valuable information to distribute gratis among
his friends. One might as well expect the girls who sell oranges, combs,
umbrella-rings, and collar-studs, in Lombard Street, to give them away
for nothing, as expect to obtain disinterested and genuine “tips” from
some wandering philanthropist. Such a person was never heard of, and
never will be. If a man gives the “tip” to buy a certain stock it is
because he wants to “unload” at other people’s expense,[42] and that is
not what is generally understood by philanthropy. The system of sending
round the “tip” to buy or sell, has become very general in all markets,
and it is certain that a vast deal of mischief is done by it. The common
practice is for a number of persons to band together, and put the price
of a certain article or stock up by buying a large quantity and making it
scarce. When the higher price has been maintained for some little time,
so that it meets the public eye in price currents, the process of putting
the public in is commenced. When this benevolent operation has been
sufficiently worked, and the “tip” has been administered to a number of
poor dupes, the price is let down. Those who have advised their friend to
buy, begin to sell and deliberately rob them, in return for the misplaced
confidence.
[Sidenote: THE QUALIFIED “TIP.”]
There is a distinction between the qualified and the unqualified “tip.”
One man is a shade more honest than another, and does not exactly wish
to charge his conscience with having deceived a friend with regard to a
certain event. He merely suggests on general grounds that such a stock is
going up. If he can get the person to whom the suggestion is made to act
on such general advice, he achieves his purpose without exposing himself
to be saddled with direct responsibility in case the result should be
unfavourable. There are numbers of such persons who daily administer
“tips,” not only to their friends, but to strangers who will not trouble
themselves to go farther to obtain any confirmation. Such an important
communication coming from credited quarters, is of course looked upon as
a valuable secret to be acted on silently and immediately.
[Sidenote: THE UNQUALIFIED “TIP.”]
The unqualified “tip” comes from the individual who intends from the
first to drive his horse full of armed men into the town, _vi et armis_,
without too much parleying at the gates. He assumes an optimism of
manner, and displays such a degree of confidence as shall override any
rising objection, gets a promise to act on his advice, and passes on
before the person to be made a tool of has time, or can summon courage,
absolutely to refuse.
[Sidenote: “TIPS” WORKED BY SYNDICATES.]
Then there are “tips,” worked by syndicates, which is a more elaborate
affair. The extent of the increased area over which it is intended
to operate depends upon the magnitude of the amount to be unloaded,
the quality of the security, and the necessity for reaching a certain
class of individuals. A vast deal of the rubbish that is shot away
from the great financing centres is carefully and eagerly laid hold
off by clergymen, and teachers male and female. As a rule, these good
people seldom pause to reflect that what is so studiously brought under
their notice in their rural retreats, is almost sure to lack a market
anywhere else. Is it at all likely that so much trouble would be taken
to recommend investments to people, by means of prospectuses delivered
by the postman, if the statements contained in such prospectuses
were really as true as they profess to be? In large cities there are
innumerable agents for all country districts always on the look out for
sound remunerative investments, and there is no need to recommend them
to people’s attention by thrusting them upon them at their own houses.
Such a process of advertising is obviously to net the unwary, who are
ignorant of what constitutes good security. The “tip” of a syndicate is
passed on, so to speak, for a consideration, in proportion to the amount
bought by the clients of the persons employed.
This branch of the subject can be almost indefinitely elaborated, but
it may be concluded by one remark, which contains the pith of the whole
thing, as applicable to speculation. Speculation as practised by the
multitude is no better, in any market, than pitch and toss, and it is
only by the aid of experience and more native skill, that some in the
long run will lose less than others. One golden rule with reference
to “tips,” no matter from whom they proceed, or by what alleged
incontrovertible facts they are supported, is this: when you are told to
buy go and sell.