（Original Chinese）

THERE is always the temptation in the stock market，after a period of success，to become careless or excessively ambitious.Then it requires sound common sense and clear thinking to keep what you have.But it is not necessary to lose your money，once you have acquired it，if you will hold fast to sound principles.

We know that prices move up and down.They always have and they always will.My theory is that behind these major movements is an irresistible force.That is all one needs to know.It is not well to be too curious about all the reasons behind price movements.You risk the danger of clouding your mind with non-essentials.Just recognize that the movement is there and take advantage of it by steering your speculative ship along with the tide.Do not argue with the condition，and most of all，do not try to combat it.

Remember too that it is dangerous to start spreading out all over the market.By this I mean，do not have an interest in too many stocks at one time.It is much easier to watch a few than many.I made that mistake years ago and it cost me money.

Another mistake I made was to permit myself to turn completely bearish or bullish on the whole market，because one stock in some particular group had plainly reversed its course from the general market trend.Before making a new commitment，I should have been patient and a waited the time，when some stock in another group had indicated to me that its decline or advance had ended.In time，other stocks would clearly give the same indication.Those are the cues I should have waited for.

But instead of doing so，I felt the costly urge of getting busy in the whole market.Thus I permitted the hankering for activity to replace common sense and judgment.Of course I made money on my trades in the first and second groups.But I chipped away a substantial part of it by entering other groups before the zero hour had arrived.

Back in the wild bull markets of the late twenties I saw clearly that the advance in the copper stocks had come to an end.A short time later the advance in the motor group reached its zenith.Because the bull market in those two groups had terminated，I soon arrived at the faulty conclusion that I could safely sell everything.I should hate to tell you the amount of money I lost by acting upon that premise.

While I was piling up huge paper profits on my copper and motor deals，I lost even more in the next six months trying to find the top of the utility group.Eventually this and other groups reached their peaks.By that time Anaconda was selling 50 points below its previous high and the motor stocks in about the same ratio.

What I wish to impress upon you is the fact that when you clearly see a move coming in a particular group，act upon it.But do not let yourself act in the same way in some other group，until you plainly sec signs that the second group is in a position to follow suit.Have patience and wait.In time you will get the same tip-off in other groups that you received in the first group.Just don't spread out over the market.

Confine your studies of movements to the prominent stocks of the day.If you cannot make money out of the leading active issues，you are not going to make money out of the stock market as a whole.

Just as styles in women's gowns and hats and costume jewelry are forever changing with time，the old leaders of the stock market are dropped and new ones rise up to take their places.Years ago the chief leaders were the railroads，American Sugar，and Tobacco.Then came the steels，and American Sugar and Tobacco were nudged into the background.Then came the motors，and so on up to the present time.Today we have only four groups in the position of dominating the market：steels，motors，aircraft stocks，and mail orders.As they go，so goes the whole market.In the course of time new leaders will come to the front；some of the old leaders will be dropped.It will always be that way as long as there is a stock market.

Definitely it is not safe to try to keep account of too many stocks at one time.You will become entangled and confused.Try to analyze comparatively few groups.You will find it is much easier to obtain a true picture that way than if you tried to dissect the whole market.If you analyze correctly the course of two stocks in the four prominent groups，you need not worry about what the rest are going to do.It becomes the old story of"follow the leader."Keep mentally flexible.Remember the leaders of today may not be the leaders two years from now.

Today，in my records I keep four individual groups.That does not mean I am trading in all of the groups at the same time.But I have a genuine purpose in mind.

When I first became interested in the movement of prices long，long ago，I decided to test my ability to anticipate correctly forthcoming movements.I recorded fictitious trades in a little book which was always with me.In the course of time，I made my first actual trade.I never will forget that trade.I had half-interest in a purchase of five shares of Chicago，Burlington&Quincy Railway Stock，bought with a friend of mine，and my share of the profit amounted to$3.12.From that time on I became a speculator on my own.

Under conditions as they currently exist，I do not believe that a speculator of the old type who traded in huge volume has much chance of success.When I say a speculator of the old type，I am thinking of the days when markets were very broad and liquid and when a speculator might take a position with 5，000 or 10，000 shares of a stock and move in and out without greatly influencing the price.

After taking his initial position，if the stock acted right，the speculator could safely add to his line from that time forward.In former times，if his judgment proved faulty，he could move out of his position easily without taking too serious a loss.But today，if his first position proved untenable，he would suffer a devastating loss in changing about because of the comparative narrowness of the market.

On the other hand，as I have implied previously，the speculator of today who has the patience and judgment to wait the proper time for acting has，in my opinion，a better chance of cashing in good profits eventually，because the current market does not lend itself to so many artificial movements，movements that far too frequently in the old days jarred all scientific calculations out of kilter.

It is obvious，therefore，that in light of conditions which exist today，no speculator who is intelligent will permit himself to operate on that scale which was more or less a commonplace some years ago.He will study a limited number of groups and of leaders in those groups.He will learn to look before he leaps.For a new age of markets has been ushered in——an age that offers safer opportunities for the reasonable，studious，competent investor and speculator. qnmqICSmIELfUJtOn02biF3QIVW7Te2/YmbWOiAjwtN4JSs6TKc4EU2uwwAxtAkS