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Show i umpmmi r i. i'ACL ULAPEiSCIilMilBElCm III lEViTMLY m ROLLO ROLLINGSTONE Canine Calling ROELOROHINGSTONE London Lingo by Bruce Barr FOR PROSPERITY jS General Business Trend Now Seen to Be Definitely Upward Some Progress in This Regard Iready Indicated. Babson Park, Mass., Nov. 5 Business men, investors, wage workers, and the public at large should be much comforted in this period of black pessimism to know that there is one fundamental law which1 they can absolutely depend upon to being us out of business depression.1 That is the Law of Action and Reaction the most inclusive law in -the universe. As apjdied to business it is this: For every and inflation there must follow a period of but when compensating period of deflation and the depression period has paid up for the period of excesses, it in turn will be followed by another period of prosperity. We can just as surely depend upon the Law of Action and Reaction to bring us out of the present trouble, as to punish us for our transgressions. For some reason Wall Street always believes when the market is going up that it will continue do go up indefinitely. Also when the market is going down Wall Street seems to think it will always go down. That is true of the majority of the speculators, investors, brokers, and even some financial advisers. They forget that the Law of Action and Reaction applies to the stock market just as it applies to business, to the phvsical sciences, and to medicine. The accurate and unfailing working out of this law can be demonstrated by history. Investors should now be interested not in the fact that business is poor, which everyone admits, but in the question of to what extent this period of poor business has already compensated for the preceding period of inflation. To say that business is never going to revive, that stocks will never go up, and that commodity prices will always stav down, is just as unreasonable as the wild bullish psychology of 1928 and 1929. -- II r $ over-expansio- n What Authorities Think 1930 has not only been a bad year for business, but also a, bad year for many business forecasts. Those who ignored the time element in the Law of Action and Reaction made a great mistake. Students of economic conditions are now' rather generally agreed that the worst of the depression is with us and there is no way to look except upwards. Following are brief summaries" of the individual opinions of .six leading authorities: puriorql trend now seems to be definitely upward, but will be accomnanied by irregularity. No. 2: The worst of the business depression has been seen, and the next significant movement should be toward higher levels. No level of business activity as low as the present has ever continued for very long. Improvement will become apparent by soring, and business should be back to normal by the end of 1931, No. 3: General business seems to have started on an untrend, but it is still too earlv to place confidence that there will be no further reactions. No. 4: General business recovery has been delayed by the mental attitude created by various bad jiews reports. No. 5: There is nothing to justify the view that no upturn is in sight. In fact a downward movement as large as the present usually ends abruptly. No. 6: Improvement mav be gradual and irregular, but some pogress is now definitely indicated. These opinions are from unbiased authorities who are a not engaged in business boosting or in propaganda. It is also interesting to note what one authority, Colonel Leonard Ayres, has to say on the subject. Speaking of the length of previous depressions he savs : In the past forty years there have been seven major depressions in this country, including this one. The duration of the definite decline from the last real prosperity month to the bottom of the depression in the first of the seven wa3 12 months' In the second one it was also 12 months, and in the third it was 12 months. In the panic of 1907 the decline the lasted only 10 months. In the depression of 1913-19decline lasted 15 months. In the postnwar depression it lasted 12 months. This one has already lasted 14 months. When Will Business Be Normal While it is interesting to compare the length of the various depressions of the past with the present one, it is dangerous to draw conclusions from that alone. The length of past depressions is really no criterion. Also the length of the preceding period of prosperity is no criterion. The important fact is the length of the depression multiplied by its depth. That gives us the area of the depression. In the same way the length of a prosperity period multiplied by its height gives us the area of that period. History shows that areas of prosperity, above the line of normal growth, are always followed by areas of similar size below the line. Note, that I say similar size not similar length. The area below the line, representing the present 9 depression, is now equal to over 40 per cent of the prosperity area above the line. Hence, the more severe the present depression is the shorter time it will last. The worse business is now the sooner it will improve, because the area below the line will be more quickly filled out. Much water has already gone over the dam. Stock Market Position Ordinarily the stock market reaches its low point in the early part of the area of business depression. In this present depression, however, it has not done so much because its high point came so late in the period of prosperity. This naturally pushed the arrival of the low point in the stock market further along in the period of depression. However, we know that the business depression period has now gotten pretty well kIohgrb6cause"tt has beetrso intense and has: fallen to such abnormally low levels. We may or may not have seen the extreme low points in this market; but we do know that the recovery is nearer at hand than it would have been if this were a less severe and probably longer) drawn-cu- t business depression. Nevertheless, it, seems probable that the major upswing in stocks will come later in thi depi ession area than it usually does. In view vt this situation investors should plan to distribute their stock purchases over perhaps a years time, buying a portion now and the balance later. In this way they will get some stocks op. the scale downward, some at the very low, and some on the scale upward, instead of listening to the prophets of doom and the harbingers of utter economic ruin, let us tie our faith to the old Law of Action and Reaction, w'hich has never failed as in the past and never will fail us in the future. Business by the Babsonchart now registers 18 per cent below normal compared with 3 per bent above normal at this time a year ago. ROLLO ROLLINGSTONE by Bruce Barr Dumb Bell Detecting by Bruce Barr Fore And Aft by Bruce Barr -- No-ITha I I i Polly-Ann- well-kno- H 1924-192- M ? i - long-ter- m fnpj ripht, VWt' publishers Flnanoml Rnivnn) stir lw-- i itfti n ritriiiinrannii in rrifl ROLLO ROLLINGSTONE |