I have chosen to entitle this book 'How to Speculate in Mines' rather than how to 'Invest' merely for the simple reason that there is far more speculation in such shares than legitimate investment. A mine share is looked upon as nothing more or less than a gambling counter, as a card to be played in a game of chance, where even the most skilful may find themselves severely handicapped if they have particularly bad cards to play with. On the other hand, there is undoubtedly a safeguard, for these counters, unlike playing cards, are not dealt out to us in quite so haphazard a fashion, so that we must make the best of what we can get, using them as skill, knowledge and circumstances direct, but they are laid out before us for our choice, and we are allowed to make our own selection. The real difficulty, therefore, is how to make a judicious selection, a difficulty which even the most experienced may fail to discern and avoid, and therefore one which is most seriously formidable to the novitiate and the least experienced.

And the difficulty is made all the greater not only because of the multiplicity of counsellors, but, if you look deeply enough, because there is a great difference between investment and speculation. It is evident to the merest casual observer that speculators greatly outnumber investors, and for the true reason of this we have need to look no further than into the inherent weaknesses of human nature itself. I call them weaknesses because they are powerful passions which, if they are allowed to have unrestrained sway over us, lead us into the most disastrous misfortunes; and it is these passions which it would be unwise of me or anyone else to ignore who would undertake the task of rightly directing them. For I would ask, How is it possible to give calm advice to a man who is labouring under great excitement, or who is in a fever of impatience, and whose mind and thoughts may have little inclination to listen to you, or, even if they have, may be so preoccupied or unrestful that they cannot grasp the full significance and weightiness of your counsel and knowledge?

In fact, it is these very passions that add enormously to the difficulties of such a task as mine, and may even render much of my labour futile. For I shall appeal largely throughout these pages to common-sense and reason, and how is it possible to appeal to any such attributes with effect if they are rendered impotent by such a fever as passion? To become a successful speculator on the Stock Exchange level-headedness and coolness are as essential as knowledge and experience, for the latter are of no use to any man if they are forgotten in a moment of excitement or impatience, whereas inexperience, if it be wise enough to listen to those who are able to advise it, will succeed where the former will fail.

And it is extraordinary and almost incomprehensible how the most experienced are utterly helpless when a momentary fear beclouds their sanity and judgment. To diagnose a weakness of this kind is not easy, and yet it is a weakness, an invariable and inevitable symptom from which the trained and far-seeing observer may vastly profit. There is no one phase of this symptom, but it reveals itself in multifarious signs and forms, and it is to the detection of them that the speculator must assiduously and scientifically train himself if he would make a sure success of the business he has chosen. To attempt to give a scientific exposition of it would, I fear, be impossible. There are no inelastic rules to be obeyed, departure from which would lead the student astray. There are no axioms to be laid down which are as rigid in their application and invariable truthfulness as laws of nature. Knowledge of human nature is one of the essentials. Trained observation and intuition are equally as necessary. These instruct our reason, and reason aids our judgments, and judgments that are based upon a calm and keen analysis, unperverted by bias and prejudice, are the least likely to err.

But there are not many, unfortunately, who trouble to train themselves in this manner, or, if they do, they fail to put it to good account when they need it most - that is to say, in alarming and critical circumstances. The number, however, is undoubtedly increasing, evidence of which is furnished us in the absence of panics of late years. The Stock Exchange, happily, has of late years escaped many disasters of this kind, although they have been averted on numerous occasions by almost miraculous events. For instance, to go no further back, there would have been more than one panic during the early part of the Boer War had not the news of the series of reverses to our arms come at a time when the Stock Exchange was closed, and when everybody had time calmly to think over the situation. Had it come suddenly and unexpectedly in the height of business, the consequences would undoubtedly have been of the gravest. Dealers would promptly have put down prices - in numerous cases by several points - in anticipation of everyone's eagerness to sell, and even though holders might have resisted the temptation, this alone would have been sufficient to alarm them and to compel them to get rid of their shares at any price. Now, a trained observer, one who had profited from past experiences, would have viewed the situation calmly. He would have admitted the seriousness of it, but he would have argued that the British Empire was the greatest in the world; that it had inexhaustible resources, vast wealth, a multitude of brave men ready to die for it; that the nation had made up its mind to see the thing through successfully; that those resources, that wealth, those men, and that determination, were sufficient to insure success; that the future, therefore, was secure, no matter how dark the present Looked; that though there were real elements of danger to face, yet the probabilities were greatly in favour of our facing them safely. Apart from experience, this would have been the common-sense way of looking at it, whereas to throw away one's wealth in a fit of fear would have been an act never to be recalled, a loss never to be regained. True, France was menacing, but it was not the Government, only the riff-raff of the populace, who pulled off their coats and insulted us merely for a certain stipulated remuneration. Withdraw that remuneration, and the menaces and insults would cease. France would not fight us without the help of Russia, and as Russia had quite enough on her hands in the Far East, and, moreover, knew that Japan was awaiting her opportunity, she was not likely to give that help, especially as she refused to give it at the time of the Fashoda crisis. Moreover, their own jealousies, their own economic conditions, their doubts of the issues of war, would have been enough to restrain any of the European nations from putting their menaces into execution, and the outlook, therefore, was all in favour of this country. True, it was possible that the Dutch in Cape Colony might rise, and thus add seriously to our difficulties in South Africa, but that would only have meant greater exertion on our part, a putting out of more strength, a prolongation of the war, perhaps, but the end of it would still have been victory.