Let us take the case of buying on a falling...

Let us take the case of buying on a falling market. That a man should abstain from all buying transactions while the market is falling is an absurd proposition. But it is none the less true in the main that such a course is a mistaken one. The machinery of his industry must, of course, be kept in motion, or it will rust and cease to be able to move in better times. But it is unwise to embark on new enterprises and commitments when commerce, finance, and industry are all stagnant. And very frequently buying on a falling market means just this.

It is like sowing in the depths of winter seeds which would mature just as well if they were sown in March. No; it is when the tide has definitely turned that new enterprises should be undertaken. The iron frost is then broken, and the sower may go out to scatter in the spring-time seeds which will bring in their harvest. To buy before the turn is to incur the cost of carrying stocks for many unnecessary months.

The converse of the proposition is to sell on a rising market. Certainly. Sell on a rising market, but do not stop selling because the market ceases to rise. A great part of the art of business is the selling capacity and the organisation of sales, but to carry out a preordained system of selling on an abstract theory is mere folly. To cease selling just because the market is not rising at a given moment, and to wait for a better day--which may not dawn--is to burden a firm unduly with the carrying of stocks and commodities.

There is a saying in Canada, "Go, while the going is good." The phrase--an invitation to sell--finds its origin in the state of the roads. When the winter is making, the roads are hard and smooth for sleighing, and are kept so by the continual fresh falls of snow, and you can speed swiftly over the firm surface. But when the winter is breaking, the falls of snow cease, and the sleigh leaps with a crash and a bump over great gullies, tossing the traveller from side to side and dashing his head against the dashboard. These depressions are called "thank you marms," because that is the ejaculation with which the victim informs his companions that he has recovered his equanimity. The man who will never sell on a falling market is the man who will not face the "thank you marms." He will "go while the going is good," but he will not accept the corollary to the dictum, "But don't stop because going is bad." He has not the nerve to face the bump and come up smiling. Don't be afraid to sell on a falling market, or you will be afraid to sell at all until you are forced to sell at far lower prices because of the weight of stocks or commitments which must be liquidated at any cost. It is precisely in time of depression that the men of business ought to press their selling and organise their sales organisation to the utmost limit. If finance, commerce, and industry could only be persuaded to take this course in the slack times, then every action in this direction would cure the evil by lessening the duration of the bad times. Not till the surplus stocks have been unloaded will the winter pass and the summer come again in the enterprise of the world. Selling is the final cure for depression.

<<<BACK :::: NEXT >>>

White Dove Books