Tuesday, August 17, 2010


Secrets of Investing

Charles Dickens, Life and Adventures of Nicholas Nickleby, chapter 2 (Of Mr. Ralph Nickleby, and His Establishment, and His Undertakings. And of a Great Joint Stock Company of Vast National Importance):
"It seems to promise pretty well," said Mr. Ralph Nickleby, whose deliberate manner was strongly opposed to the vivacity of the other man of business.

"Pretty well!" echoed Mr. Bonney. "It's the finest idea that was ever started. 'United Metropolitan Improved Hot Muffin and Crumpet Baking and Punctual Delivery Company. Capital, five millions, in five hundred thousand shares of ten pounds each.' Why the very name will get the shares up to a premium in ten days."

"And when they are at a premium," said Mr. Ralph Nickleby, smiling.

"When they are, you know what to do with them as well as any man alive, and how to back quietly out at the right time," said Mr. Bonney, slapping the capitalist familiarly on the shoulder.

Caption below one of the engravings in Honoré Daumier, Mésaventures et Désappointement de M. Gogo (Mishaps and Disappointment of Mr. Gogo), my translation:
"What! Mr. Director, you have lost 99,271 francs, 35 centimes, of the 100,000 francs that my father, Jean-Boniface Gogo, deposited in your annuity plan 40 years ago! Your prospectus, however, says that the capital will multiply six times in six years by the accumulation of interest and interest on interest."

"True, but unfortunate circumstances, variations in the rate of return, risky speculations made by of all my predecessors...Besides, the future of this annuity plan is guaranteed from now on."

"Ah! Guaranteed? That's a different story! Well! Keep my 278 francs, 65 centimes, accumulate the interest, and try to recover the capital. Take care not to lose it! I'll come back later."

"Excellent, excellent! I'll keep my eye on your capital. I'll keep watch over it as if it were my own. Come back later... [sotto voce] much later."

William Gropper, The Stock Market

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