This book is written for the purpose of giving our clients some ideas of the fundamental principles that guide us when we select stocks for them to buy, but these principles are valuable to every person who trades in listed stocks or in any other kind of speculative stocks.
WHAT STOCKS NOT TO BUY
A great deal more can be said about stocks you should not buy than about stocks you should buy, because the list is very much larger.
Stocks not listed on the New York Stock Exchange, as a rule, should not be bought by a careful speculator, but as stated in the previous chapter, there are exceptions to that rule. Billions of dollars have been lost in the past by buying stocks that have become worthless. A few years ago a list of defunct securities was compiled, and it took two large volumes in which to enumerate them. New ones have been added to them every year. Therefore, it is very important that you should give careful thought to the subject of what stocks +not+ to buy.
Nearly all promotion stocks (stocks in new companies) are a failure. An extremely small percentage of them are very successful, and the successful ones are referred to in the advertising of the new