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Show fc6 FEBRUARY 2, 1970 OIL & MINING JOURNAL 008 VDDi? OfflDDy RICHARD BLACKBURN Sib? U&KMBIISSS ILsa V(3p3 to GarnttomM lOpumfe cdB Dear Mr. Blackburn: I have only owned mutual funds but have acquired an interest in learning more about the stock market. Recently someone told me that more people were selling stocks than buying them. Does that mean during this current market or is it a long term trend. Is it a bad omen for investors in mutual funds? A brief reply would be appreciated. Frank Simmons. The Las Vegas Silver Co., at 200 Las Vegas Blvd South, Las Vegas, announced the sale of its controlling shares of stock together with its associated M & B Mining Corp shares to Continental Dynamics, Inc. Continental Dynamics, Inc, is publicly held Utah Corp. engaged in petroleum and gas operations in Texas and mining of base metals in Arizona. a Dear Mr. Simmons: The only way such a report could be prepared would be to take information from the registered stock exchanges. And if such a trend does exist, then it would seem to me that it would be based on New York Stock Exchange statistics. On that exchange volume has had a spectacular rise since 1960. But most of this has been actions of the big The combined operations of Las Vegas Silver Co. and Mining Corp are engaged in mining, smelting, refining and marketing of silver and other metals. institutions. As for the individual stock buyers, the trend is definitely towards liquidations. If fact, individuals continue to unload their holdings, as they have every year for the past 12 years. From 1960 to 1968, these sales exceeded purchases by $48.3 billion. In that same time, the assets of mutual funds, in which the money of individuals is reinvested in stocks, grew from $16.4 billion to $48.6 billion, according to the Investment Company Institute. From these statistics it would seem wise to start your own mutual fund! But to find the true story one must always look behind the reports. While New York Stock Exchange firms have been hit year after year of with rising costs and a smaller volume has portion of the volume the over-the-count- continued to er sky-rocke- t. There is no central record keeping for O.T.C. stocks hence no records. But there is no doubting that many of todays small companies are the giants of tomorrow and in recent years investors have recognized this and their money has been leaving the listed securities for the gorwing list of stocks. quality over-the-count- er Dear Mr. Blackburn: It was interesting to note in the story about the Catholic CArdinal of Los Angeles, Cardinal McIntyre, that he was a stockbroker when he decided to enter the priesthood. I wonder if he left the market during a recession? Name withheld on request. Dear Sir: Yes, I saw the same story. And it works both ways. 1 know of a very successful broker who was a divinity student previously. Malcolm -- 7. Dear Mr. Parker: Anybody who has ever borrowed money from a bank probably has at least a nodding familiarity with discounting. You borrow $100 for one year, you receive (for example) $94. The $6 difference represents the discount or, to put it another way, the $6 is the interest you pay in advance on your loan. Commercial banks, believe it or not, run into the same although for considerably different problem you do need it in a reasons. They may need money, some-time- s hurry, and usually for a short period of time. A principal source of cash for a bank which needs funds is one of the twelve Federal Reserve Banks which comprise the Federal Reserve System most of the larger commercial banks are members. Federal Reserve BAnks are chiefly banks for bankers; they do little business with the possibly your general public. But if a member bank bank the Federal $10 needs, say million, neighborhood Reserve is most likely to accommodate it. The price which the Federal Reserve charges for a loan to a member bank is called the discount rate. The borrowing Morrison, president of Continental Dynamics, stated that he was pleased with the acquisition of these companies because "This will be one of the few operations in the world where minerals are mined and processed and marketed by a single corporation without ever changing hands or ownership." The M & B Mining Corp, is engaged in the business of NOT A SNACK, IT'S SILVER Enid Hayward, wife of the & Oil Mountain of the Mining Journal, inspects tiny publisher Rocky ingot of silver produced by Las Vegas Silver Co., which has announced sale of control to Continental Dynamics, Inc. engineering and mining mineral deposits in the United States and CAnada. In addition, the M & B Mining Corp owns and operates a base metals and precious metals smelting and refining plant located in Colton, Calif. FPC warns of U.S. gas lack - WASHINGTON The supply of natural gas will dwindle 10 percent by the end of 1974 and 37 percent by 1980 if present treads of reserve additions and increased market demand continue, a Federal Power-Commissio- (FPC) report of gas in 1968 shows. supplies The FPC also announced it had granted the highest rate of return to natural firm Dear Mr. Blackburn : There has been so much talk about interest rates and the Federal Government control of bank rates, not to mention the fact that the Las Vegas School bonds did not find any Im learning from all buyers because the yield was only of the stories but am still a little confused when they mention the Discount Rate." Would you hlep clear this subject for me? John Parker. M & B ) 7 gas pipeline percent to n GAs Transmission Co., Bostion, based on a pattern since 1968 of granting increases based on constantly increasing cost factors. The supply report, based on figures supplied by 95 interstate natural gas pipeline companies accounting for 97 percent of natural gas produced in 1968, states that 1968 requirements " of a maximum of 13.3 trillion cubic feet could be delivered Algonquin bank is required to put up collateral, which is usually in the form of U.S. Government securities. The need for a bank to borrow money is related directly to its reserve requirements. This sounds a bit tough but its simply the amount of funds a bank is legally required to have in relation to its total deposits. A large and unexpected withdrawal of cash, or seasonal requirements for credit beyond a banks resources, could cut the banks reserves below the legal minimum. The discount rate is important because it is generally considered to be an expression of the Federal Reserve Systems appraisal of the economic situation. A change in the rate may have a great psychological impact. A higher rate, for instance, may be interpreted (but not always) as a sign that higher interest rates arc necessary to curb an unhealthy boom; a lower rate could be interpreted to mean that the economy needs a little prodding and that lower interest rates might do the trick. THOUGHT FOR THE WEEK: Sunshine is delicious, rain is refreshing, wind braces up, snow is exhilarating; there is no such thing as bad weather, only different kings of good weather. John Ruskins ITS YOUR MONEY Appears weekly in the Sunday edition of the Las Vegas SUN Financial Section. If you have a question, write Richard Blackburn, Las Vegas SUN, P. O. Box 4275, Las Vegas, Nevada 89106 until 1970; beyond that year ability to deliver would fall to 12.2 trillion in 1975 percent) and 8.4 trillion the off (10 in 1980." The year 1968 was the first year that additions to natural gas reserves amounted to less than the volumes of gas produced. The report shows a net decline of 3.4 trillion cublic feet from the 1967 reserve figure of 202.1 trillion cubic feet. The report points up the need for development of new gas supplies to meet the increasing market demand. Natural gas is used mainly for residential heating and cooking. In 1967 natural gas provided 31.2 percent of total U.S. energy consumption, ranking second to crude petroleum products. About 40 million customers are served with natural gas. "This report underscores the concern expressed by the pipeline companies as to the suppy of gas," said recently installed Bureau of Natural GAs chief Thomas Joyce. The report's somewhat dramatic projections are based on presently contracted gas reserves, he said, and should be understood in that light. Joyce said the Future Supply committee, an industry group, has predicted that total undeveloped gas reserves amount to 1,227 trillion cubic feet, although only 282 of these are "proved" by actual drilling. To meet increasing demand for natural gas, American pipeline compaines must either explore for and develop new natural gas reserves or import it from other countries. |