Show it barsois A R S 0 NS AUTHENTIC SIA STATEMENT 4 to clr M clr BABSON DISCUSSES STOCK MARKET EXPLOSION BABSON PAUK MASS what cinq to our kl good friend Eken hower lan the math to set off allx h blikh h has broil been hir lue foi fol some one those of you who iivo follow Ilow td il tills weekly will wi number thai that I 1 have li often five sticks of dv immite which wert awaiting sunn some thine thing to sc vt l them thern off five rive reasons for lh the Col lapio I 1 buying by investment trusts trust pension penion funds fu nl and institutions the money lias has come into those these so foit fast that the funds managers felt they must invest it furthermore they naturally turned to the tile biggest companies 2 tremendous building ot of houses this exceeds that of previous years the money is well spent both to house the owner and help the twenty seven industries dus tries which benefit from the building of every house home purchasers however should have been made to put up more money of their own and not buy houses on shoestrings 3 greatly increased installment purchasing I 1 do not criticize the purchasing even on installments s stall tall ments of automobiles electric refrigerators washing machines modern kitchens and other things which improve the efficiency ot of the home but buying TV sets with hardly a down payment may be questionable 4 military expenditures a great factor to the extent these are paid tor for by taxes they are not too serious but they cannot be depended upon furthermore although necessary the expenditure is uneconomic 5 poor fields of stocks after payment of taxes except in the case of pension funds institutional investments and other nontaxable purchases low yield may be the greatest factor after most investors deduct the income tax from their dividends the yield is altogether too small to run the risk of buying stocks effect upon business and employment what the market will do from now on I 1 forecast that most major dips will go lower than the preceding dip yet each dip in n due time will be followed by on all upward reaction this latter will probably not reach as high ni as the preceding upward movements what will really happen to the stock market will depend upon general business which aich in turn determines employment employment determines retail sales which supply the factories with orders thus completing the economic cycle president Elsen Eisen howers health will be a great factor in determining the immediate future of business many argo undertakings have been held hold in abeyance depending a decision from president eisenhower Elsen hower as to whether ho he will run again this work will doubtless now be held up until it Is known who tho the presidential candidates will be perhaps this means that the contracts will not be signed until after the ele election cUon it if they are signed tor for some years to come what the president would liko like to do intimate friends of president eisenhower Elsen hower and liis his wife ha had haa a known that he does not like the details the public speaking and entertaining demanded by the presidency he enjoyed being general of the army where his work was largely confined to thinking and planning others carried out the details no one opposed him or ignored his orders we now know he will not run again but I 1 believe that be he would have liked to be secretary of defense or secretary of state or chairman of the security board his holding such a position would add greatly to the administration and give the country faith when manufacturers and merchants telephone me asking what they can now do to prevent a business depression I 1 reply spend more money on advertising ver As stated above future business and prosperity de 1 pend upon retail sales at the grassroots grass roots level to stimulate these sales two things are required more advertising and better employee relations I 1 hope that every businessman and will do his part along these lines during these critical weeks |