This is one way in which the ranks of those who speculate in mining shares are swollen at the times of new discoveries. They are swollen also by others who have been taught by previous experience, but Who hope to profit from that experience at the expense of the ignorant. On the last occasion of a similar boom they lost heavily, but that was merely because they didn't know better. They have gained a great deal of knowledge since then, and there is no reason why they should not profit from that knowledge now. They'll take care not to be taken in as they were before. They now know the ways of these promoters, and, knowing them, they will be able to avoid the mistakes they made in the past. So they subscribe to the shares of new companies, knowing well that they will be good gambling counters, for there will be any numbers of the ignorant and inexperienced who will buy them, and so they will be able to get back some of the money they lost years ago.

Others who subscribe are, of course, old stagers, who welcome booms of this kind because a prolonged experience of them has taught them how to take advantage of them. So for a time things go on merrily, and keep on attracting greater numbers of the ignorant, who load themselves with shares, and hold them until that time, predicted by the papers, when they will become very valuable.

This fashion, therefore, has a potent influence on the mining market. It narrows speculation down to one limited area. All other mining shares are neglected. There is no longer any demand for them, except on the part of wideawake investors, of whom, unfortunately, there are very few. Indeed, speculators sell out of their South African and other shares in order to obtain the resources wherewith to gamble in West Australians, and this may bring about a serious slump in South Africans and others. It will also affect other markets besides the mining, for the professionals will not stand idly by and see splendid opportunities escape them elsewhere. Jobbers, seeing business restricted in South Africans, and even in the railway and industrial markets, will migrate to the West Australian in order to extend their scope of action while the boom lasts. And the boom may last for a year or two, or even three years, before the collapse comes. And when it does come every department of the mining market is affected. The great public, having been loaded with scrip that is now worthless, will no longer buy a mining share. Every mining share possesses an equal value in their sight - worthlessness. They keenly resent the manner in which they have been defrauded. They see themselves to be the victims of rogues and scoundrels, and they resolve never to be victims again. And in this humour they will sulk for a long period of time - until, perhaps, there is another gold discovery and another boom. They then, in their turn, resolve to profit from their past experience, at the expense of others who have not been bitten as they have been. And so history repeats itself, and so may we all profit from these experiences if we will learn how.

It is indisputable that these fashions are frequently a godsend to experienced speculators, and those who know how to profit from them can easily make their fortunes, and never have further need of speculating again. I suppose I am writing this book for such people as well as for the ignorant, and therefore I advise them to learn to take the greatest advantage of any such temporary public excitement. It will have its usual effects, of course, and be not a little harmful to the mining market, and later on greatly restrict the opportunities of speculation. But, unlike the investor, the speculator looks to the present and not to the future. The future - I mean the distant future - must take care of itself, and so must the mining industry. He must make his pile now, and if he can do so, then he need have less anxiety about the future. The best kind of shares to speculate in are undoubtedly land and finance companies. They are generally the first to be formed, they take up a great area of country - a swamp or a marsh will do just as well as a fertile piece of land - and these will be sold to subsidiary companies for sums considerably in excess of what was originally paid for the land. These sums will represent profits, and enormous profits, too. These subsidiary companies are floated, and promotion profits are made on their flotation. Then the parent company speculates in the shares of its offspring, and thus makes huge speculative profits. Of course, it cannot be kept up for long. It is only the ignorant who think it can. They pay 50 and 100 per cent. dividends for a year or two, and the ignorant keep on buying the shares at inflated prices, which speculators sell to them. Let the experienced and inexperienced alike, therefore, keep their eyes on this class of shares. Let the latter not keep them there for long, however. But they must draw up their own calculations as to how long that time should be.

This boom is, as a rule, a very favourable time for the investor. He should have nothing whatever to do with the boom itself. He should not subscribe to any new companies. He will find far better opportunities elsewhere. The shares of well-developed and proved South African gold-mines will be sold, and he should promptly buy them. He may never have such another opportunity. When the boom is over attention will once more be paid to South African and other mining shares, and they will be bought by speculators and investors alike. Such shares cannot be neglected. Their value is far too assured. Prices will go up, and if the investor cares to sell out he may sell out at a profit. So these fashions and booms may be beneficial to some people. If they are disastrous to others, then others must largely blame their own folly for it.