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Show course this didnt help From Wall Slroot To 1 Main Slroot jm ,,:ll " (part three) the last two weeks our financial wizzard, mythical Dr. R&lph G. Lawrence explained how he had inherited some money, sold some land, and won on two Irish Sweep-staktickets, so that he had $1,000,000 left after paying taxes. His first investment was m HiLow, He chose it on the basis of one of its minor toy products. When the value of the stock sank because the company lost a govei nrnent contract on its major product, a guidance system, Dr. Lawrence discovered one of the first rules of investing: Dont judge a company by one of its minor products. In es gyro-optic- Q al PILLAR 2ND OF WISDOM next lesson Dr. Lawrence learned was vvitliafish-'ln- g lure. He bought so many shares of a small company that he forced the price up, The and when he sold the shares, he forced the price further down. From this lie learned his second lesson in investing: Shares of companies which dont shares have many in the hands of the public can fluctuate wildly PILLAR 3RD o OF PILLAR 4TH OF WISDOM 8 His most recent pearl of Investment wisdom was: Options are a very good way to make or loose lots of money fast, especially the latter if you don't know what youre doing. stockholder. The npxt day I got a letter ifrom the management of Emerson offering to buy shares of Connie at $27 12, this was tender offering. The letter said that Emerson had been buying shares for about half a year, the time I had been buying, and had now 47.8 controling interest. All they needed was ti&te w shares to One day I heard of a wonderful investment idea. The first is called long-tercapital gains. Briefly, it means ffehat a gain from selling securities youve had for over Mx months is taxed at half kne usual rate of money you 'seam. For me this means that I make one and a half times as much on long-tetprofits. Im in the 50 bracket. Normally, any profit I make on my practice or anything else is taxed at 50pf. If I nold my securities for over six months, then Im taxed at only 25, a good way to earn half again as much isnt it? m Q m REAUTY ihis time' PAYS decided not to buy options, but to buy the stock ltgelf. I found a company which looked gooiand the stock looked (as my broker an attractive buy called it) situation over the near term. It was called Queen Connies Beauty Products, Inc. For my' $240,000 left "St oin my original I I bought 10,000 shares of Queen Connies Beauty Products. Tile price started to rise almost immediately, and soon I had a profit of $2 a share. Although the $1,000,000 0 price tfluctuated quite a bit, It rose steadily, and by the end of four months I had a $7 profit a share and a total paper profit of $70,000. If I had sold the Queen Connie, Td have to have paid half, or $35,000, to Uncle Sara in taxe. But If I had the gain over a of longer than six period months, then Id pay only $17, 500 In taxes. That $17,500 left over would be mighty useful. HOLD FOR A LONG TERM 1 decided to hold for the long-tergain. Even if the price did drop a little, I'd still have more In the long run by paying a lower tax on less of a profit. And the price might rise too, and Id be bet-.t- er off. One day, however, the stock propped 2 points to 29. That was an unusual movement for one day. The next day there was an article in the newspaper saying that the B. J. - Emerson Drug & Chenncal I m 9 til Then the new earnings came out. Up to $25 Now the P E ratio was down to 40 since the price was up to 80. I decided to wait, however. I had learned not to jump in unexpectedly aiKl to plav a waiting game with the market. The stock continued to rise. My friends kept on telling me hov. much money they were or how much they making, could have male if they had bought when they first heard about it. The price went to S100, 125, 150, 175. I asked my broker was an interesting situation for near - term traders. I wouldnt mind getting a little profit fast, so I did some further investigation and the went tip to $190 a share. price One day the president of Sinmex stated that the earnings for the next year were going to be up from the previous year. Well, at 100 times earnings the price earnings ratio was high, but the year before I had thought 130 times earnings was high. I decided to buy. Emerson had risen very fast during the previous year and was selling at 50 times its earnings of S2 a year. That was higher than most stocks, and higher than most chemicals. That was the last of March. A few weeks later a top government official made an uncomplimentary remark about businessmen. Although the maiket seemed higher and ready for a fall anyway, that seemed to touch off a string of things and the market as a whole started to ctumble. Everytime the DJIA went down 50 points everyone said that that was the bottom, but people didnt pay any attention to the experts, and the market kept going lower. ROAD ROYAL RICHES TO For 200 share got 500 shares. Ab Sinmex, ah dreams of glory! But something happened. No ong,,really knows what. According to the brokers and Investment services, " the bottom fell out , Sinmex had what was called a been glamour stock, one everyone was buying. Then when it started to fall, everyone got frightened, and sold. First, the stock went down to 185. At that point a lot of people who had bought much lower afraid., that It would sink more, so they took their profits. This the stock even depressed more. Then traders noticed that it was going lower, and to sell short. T,his decided pushed It down to 150, which frightened more people, etc. Emerson started to drop and went down faster than the other stock's. It had been one of the stocks that everybody was buying; now everybody was selling it. In practically no time my investment in Connie had fallen because of the drop in Emerson, which I now held. SINKING t at the price earning ratio of 35 it still was way above the market as a whole at 21, times earnings. To make a long story short, by the end of June, Emerson Drugs and Chemicals was selling at 20 times earnings of $2, and I sold out. I didnt get my longterm gain, and I leaned firsthand one of the first axioms of Wall Street; A stock transaction done only for tax reasons is a bad transaction. At any rate, I still had 2500 shares of Emerson at $40 a " share, and that gave me $100,000. a of money in oil, at? least since the end of the last century. I decided that that was for me. I saw an ad in one of the finanA FORTUNE cial jpapers, IN OIL - BUY OIL RIGHTS TO I was , Having Problems ' THIS TEXAS LAND AND W AIT FOR THE MONEY TO GUSH It sounded attractive, IN. to say the least. As I read further I found that the land was between two large oil fields, and I read how much the people who owned these lands had made. A small piece of property was worth potentially hundreds of thousandsin future oil production. I bough $12,000 worth of oil rights on the land and waited for the money to start gushing In. That still left me with $13,000 cash. . I got tired of wafting for some oil company to ask to drill on my property, so I sked around and found a company I could hire myself. They made a few test holes and a few dynamite seismagraphic tests and said that there certainly was oil In the area. Of .... ? REMODELING Salt Lake brokerage houses the following will supply material on request of Neigh- MERRILL LYNCH, PIERC.E, A SMITH has notes FENNER, on the following companies in its weekly market romment; Borg - arner, Cot nmg Glass Fibieboard t Paper Works, Products, Intel state Power, McLouth Steel, Motorola, Phillips Petroleum, and Thatcher Glass Manufacturing. Phone CR 7-5- 197 runnlngs----receiv- if paid for ( $1.50 In DEMPSEY brochure considers REGLER has on five stocks it - a for attractive in- are willing to nsk. The reasonable accppt stocks are American five Allans Depaitmeit Enka, Aurora Plastics, Stores, Pabst Brewing, and Talon vestors 4 277-18- who on ? KtrnUrgarten (278-333- tin. limited 3 hr. eniu.lme.it Sept. essions Numbers, reading readiness, language de elope-,ne:- .t art, music, ealth, mpement. .sc.ejice, sttcia! d latger with plenty of parking. Outsile of Cltv limits, in county. Call 326 2CC-58- 'Piano CK7 ,. cornice win liv. rm. drapes (rose), rink dining rm drapes, 6 paneled Hawaiian punt drapes, organa (piano with organ attachment), grey all wool shag rug 12 x!4, , clothing. Call HU Picture window Upi lght Piano . DU-!'- St Ssltr $150. i He iJ 484-9T.- l.H 4 '! t i a . I' ' 1, a , t G m v i 1 'i sci 'MIC1, v ' kkeej us, S il 3760 South, it ,t d t v W C pwk t ipanJ 'V, WU5 nTe re- - Murray, maculate el.e'-v- . 1833 err 466-258- has FOR RENT ie bdi m duplex $90 per mos. $80 on lease. 4 40 9 nut CR7 9487 or I1U 2 nr 4, 10 - Home, So. East owner moved. Im- Office or business space, new Bldgs. Air Conditioned, 2343 1 ast 3300 South Call tfc. 2 HU5-063- - Easter Smiths Drive-In- n Sunday only - Faster Special -5 coke FRFE with every 5 himburgers to go. Smiths $9995 AVAILABLE FOR A SHORT TERM LEASE AT AN EXTREMELY REASONABLE RATE, phone Phone: 298-35- 326 Phytographic name plates on aluminum, brass, zinc, Ridges Photo fngravmg Co 278-28C- 6. Bedroom im u.ViE TAX r urns $5 and Your huiiit or mine Qovtiily 'reports and book- 4207. 48 ,i; CR eeping Up. For Sale' 1958 Volkswagen Conv. $750, 1948 Dodge Pickup $200, 1955 Rambler Wagon tf &75. Call 278 - 9813. Home 293- - 6433 82 r studio beginning vocal, speech, and piano. Call Marge Duhuh tf New dinning rm. set $100 end tables & coffee table $30. 21m. GF Television $30. Misc. items Maple Maple EL HUC-951- eU sell No icr whirlpool, window mont, 220 volts, air conditioner. Call E 7 . n' ail al le at all times day t. Hilhu Service 255 j3rd So. HU4-171- 3. tfc I encing Materials, Portable dog tuns, cloths poles, licensed installer, 6274 Highland 'Dr. Ph. tf " 7 Membership to Crestwood Swimming Club. Call ' 416 the Long Distance most personal way to Jeep a distant . Sine Sewing Machine, Slant Good Condition like new. Call HUa-549- Enroll 278-307- 8. For nciSv indeeorativt? oil painting, beginners oil classes and beginners piano' classes afternoons evenyigs and Sat. Early American Paintings, Religious Painintings, - Holly Antiques - Art. Call For Sale -- 3 . v piece sectional rose colored sofa I(ent-- 2 Woman wants work, partiipe, can type, file, clerk. Have 4 years librarian experience. Will tend children your home, or mine. Will iron.'Best reft erences Ca'l CR $35. Sing- le Sofa $25 brown tweed. Corner table. A $25, Lawn mower $7, 2 gold wedding bands $5. Phone CR bdrm apt.unfurn. carpet, drapes, disposal, heat, hotwater, washing facilities, carport, 4347 Highland Drive. 326 32C 277-740- 262-015,- 9. (I) . v nr . con--jrrr- 484-458- 8. Keep in tduch with friends back home by STATES TELEPHONE - 1 car on arypublic your 3, 26 friendship going Its true Long Distance is the next best sell used cars or. and We buy 487-768- 4. New In Town? 6200 So. CR7-093- OFFICE HS Brick Fast 2832 Drive-In- n Call for his basic Army training. From there he will be stationed at Fort Leonard Wood, Mfssouri. Ellis has recently fulfilled an LDS mission In Denver, Colorado. 4. MISCu 8. left for Fort Polk, Louisiana 3 3 20 CR7-C3C- sup-erb- of Mr. -- Would like to tend year old girl in mv home wk dys. ic. 6200 Soutlr 2300 Fast. 2x5 and Mrs. E. Vern Bringhurst, vy i CR7-015- bdrm. rambler. 80 x 150 ft. fenced, landscaped, - full basement, plumbed, wired, 22 ft attached garage, large patio, flagstone floor, 20 x 14 ft living rm 1 12 central entry Hal . 19 ft kitchen. Large e bdrms, good floor plan, construction, T.V. aerial appliances, drapes, ww carpeting. See any time, Kenwood Dr. Ell is Rrinj;linrst Leaves For La. Basic Train in rit 4, 16 a hi 277-786- 5. Sale East ivate tutoring, childRemedial reading, arithmetic, spelling, andlin-guagBegins Juuel5. Cont ict M0 Jmlv Poll, Semi-p- Reid Wig. Platinum. Was $70 - Now $45. 1906 E. 7040 So. Phone 326 For 3180 1. e. n raishvde. i CR7-5C2- ren J ufr. Fred week Aina. 3, 2G Gordon Campbell, , tf , a Mower sharpening and hand or power mowers, pick up and delivery Call uy Bv Special covfe-- day lawn lepair En-gli- -i , c lu 1 Ilolladav CRB-032- CR Rose-Mar- Reg. House work s,(U". , Hama Schwinn Bikes - We sell the best and fix' the rest! Lawn Mowers sharpened, reasonable. Holladay Feed A Sports 4644 Holladay Blvd. CR 1U. 2626. 1co5. - Wednisilav, Call eekMV aftei urd vs, s.,t e1 i"i ,ti Hr. o. i puolic s, ciki 46 S t lm ir tutoring ' mat o ence ... t i 'ill , Olympus Hills - &2.700 all carpeted, fenced, landscaped brick home. Has 4 bedrooms, baths, all electric kitchen, formal dining room. Call owner CR TF H for fV h . O I .C now 4' " A . R i re el - Beautiful CARPET N I riolesMon.il 11 oiling by the peine Have two openings, pick up 4. delivery. Ilolladav A I ast n 4 l(i Millereek Area. - y S Enttu For Sale i Vi Slpei isc For Sale - Family membership to Crestwood swimming For information call club. after 5 pm CR Alder, head real for Zions First National Bank has received the Senior Real Estate Appraiser designation from the International Society' Real Estate Appraisers. This is the highest apgraisal designation award that Is bestowed in the real estate field. Only two such designations have been made in the state of Utah, one of which is Mr. Alder. There have only been 225 such bestowals made in the entire United States. Cl i ic 4C Guy D. and Organ lessons, Call J33. Mrs lennv Olson. furniture clc uiuig service i tv et mites Time tested , t .mint: i all tvpes of fine All , a ivi ,v film. w 'it mu! untt iwi Call EL5--- J SERVICES Yi estate appraiser ! 4 an Kb For Sale Call CR - CR8-81G- SALE FOR - Glas- Cental t I er.ses Early rm i mn an,! m i.nu hours by ippuit t mont. Dear ien Visual Cl. i.,. 1C b o Holladay Blvd. J,1one tfc. 3000 feet or B1 Ig. Appraisers Pick Zion's First Mail For Honor - 7000 South, LXMlNriONS EAF Street. Ellis Brlnghurst, son ! ses also has a J. Armstrong A. of Wall NEW Way 2C02 Susan Wav 7C80 Soull Accey 278-111- -t! Rubber and anew research and analysis of B. F. Goodrich. Also featuied this week is a report on Massey - Furgeson. Investors Primer is the title of a pamphlet qn the vocab- 2160 East ), Susan Will trade fur equitv - 3bdim brick lome.Bathl 2 full bsint Cornet lot 13th East 'uhSoutl 7 3 26 South. Call DEAN - WITTER report advance the fourth week free! e Reg. cleaning woman. 2 dys 'a wk no children, all convince, furn. Own trans. Cal! SCHWABACHER A CO. has a new report on Armstrong MOUNTAIN Co' lines for $2.00 64-6- 3. BASEMENT ROOMS Construction first three 4 bor readt rs: t Complete drawings with bids. 1964 WANTED Reports ROOMADDITIC&S BATHS - KITCHENS ADVERTISING RATES Pay for the Brokerage thing fo beingthere. Pick up your phone and go visiting tonight. SEE US FOR AASE CLASSIFIED SHIP At any rate, I learned not to jump on a sinking ship, but to get out while the going is good, and while the passages arent blocked by other people trying to get out too. My sale at $50 still left me with $25, 000, enough to start going again. MEXICO, LAND OF OPPORTUNITY Thurs., March 26, - DEADLINE TUESDAY 1p.m. 1 Theres always been lots 7 Page Im still waiting forthemonev to start gushing in. ulary FALLS talking about my several near misses at a real fortune with a couple of my friends and one of them, told me about a Mexican company that a friend of his was making a lot oi money 111. it was a drug company that had a wonderful new product that promised to take much of the worry out of living. The name of the company was Slnola Industries de Mexico, called for short, "Sinmex. Sinmex was listed on the American Stock Exchange and had a brilliant . future. It made pins that took away mtich of the cause of worrying. They were mescaline and would put people Finally, So now I have $500, and if you know any oil companies that want to start drilling, what he of It. He said that it though EMERSON DROPS days.-Bu- . EStffNINGS BETTER Queen Connie. I t went to 75 In a few the -- get control. That accounts for the rise in price at least partially, I thought. Emerson was alarge chemical company, and although a good oi e, not growing as fast as Queen Connie. Then a notice appealed in the paper saying that Emerson had complete control in Connie and was going to absorb it as a subsidiary. They were going to offer one share of Emerson lor four shares of Connie. By that lime Emerson was selling at $19u and Queen Connie at 27, so I lost on the exchange of stock, and had $2300 shares of Emerson at $100 a share. I was still over my original investment of $240,000 in PE tt most pleasant sleep The imaginable. earnings werent very good in relation to the price however. See how clever that last experience had made me? The stock was priced at 75, but the earnings were only 30 cents, 130 times earning - a little high wouldnt you say9 in had bought many Company shares in Queen Connie, and now Emerson was the major W'ISDOM After a temporarily successful attempt at pyramiding investments in a listed stock, General Utilities, the shrewd Dr. Lawrence neat iy lost .his house, car, and fumshing, but did relatively well by loosing only $10,000 on General Utilities. His third Lesson was Dont use margin more than you can afiord. Vfr THE NEIGHBOR Salt Lake County, Utah - J r How 1 Turned 81,000,000 In Stocks Into 8500 Cash In My Spare Time much since the land on two sides had oil. I told them to try a test hole, and I could hardly wait. Ahd I waited, and they drilled. And I waited some more, and they drilled some more. This kept on for quite a while, then I asked them how much the bill was so far. $12,500! Outrageous! But they said that a rig and manpower were very expensive, and 1 couldnt argue about that. I paid them. MEIEirS MKT. olladay Blvd. HoHaday CR 80061 4730 A i 4 |