The purchasers of speculative or even semi-investment securities are, with negligible exceptions, individuals. The term "semi-investment" in this connection is applied to such securities as high-grade preferred stocks and junior bonds, which are customarily regarded as reasonably safe but which are subject to a greater degree of fluctuation and uncertainty than the strictly high-grade investments. There is a fairly clear three-fold division of the immense number of purchasers and possible purchasers of speculative and semi-investment securities:

1. The buyers who have in view primarily the safety of their principal, in which they do not anticipate any great appreciation in value, but who desire a larger rate of return than can be obtained from strictly investment securities. These are the purchasers of junior bonds, preferred shares, and the like.

2. The purchasers who are looking primarily for an increase in the value of their principal, though they do not object, naturally, to a high percentage of yield. These are the purchasers of common shares, especially those which are not so thoroughly seasoned as to approach the semi-investment grade of securities. The members of this group are likely to be for the most part people who have some especial connection with, or interest in, the corporation, the shares of which they are purchasing; often they are minor officers or employees of the corporation.

3. The speculators on margin, who operate on the Wall Street and other stock exchanges. A large number of them are merely gambling; others have some special information as to a given corporation the shares of which are listed on the stock exchange, and are trying to make capital out of their information. Still others are observers of general market conditions, and buy and sell standard issues with little regard to their intrinsic value, but with a great deal of regard for the buying and selling movements on the exchange which they see in progress.

Some of the details in this rough outline sketch will be filled in later when studying methods of selling security issues.