| Show Family Investment Talks By Roger W. W Babson Buying Stocks For Fir Profit I Babson Park Florida April 23 I i 1526 1126 Continuing his Famil Family In- In Talks Roger W. W Babson today dar discusses the purchasing nb of oft t I docks stocks and more especially common s. s He makes some rather father radii radal rad rad- I ii al suggestions but probably ho lie hoArs hoI I 1 rays BIS these things to to protect the i r pall ali Investor and is not nol giving genFI gen geu- FI nl 1 advice ice Of course someone rut ut bu buy stocks storks of oC new companies fr frit r it Il would be impossible to d develop KV tEl Industries Furthermore in iner order er to provide a market at all tines th there re must always he be a huger buyer lor or every seller However Mr ibson makes valuables some very vry valuable J s I It t I WHAT A ARE AHE HE STOCKS S In Is previous pre articles I have relo re- re to lo First Mortgages as as est est- tu TUIS including including First Mortgages l I houses public utilities and rail rall cads Mas Now v m to order i for any anyone anono ono lo To t I told lod od a first lust I mortgage someone wt sire She it and be he tho the P I I 1 13 U the oas cas else of a house honse this is 15 tine the thor Dicer ner r who holds l tho the equity Ito He f h the one who i h o must do o the worry worry- g 6 about the house collect the r attend to repairs and see t rl at al money is av available r for r Interest st is l d for tor the payment t. t ofa of oC Ul the fife inert inert- Ea Pie a e when beu due in the tho case caso of I loads dJ or Public i c Utility Corpora Corpora- a OSs the thoe th owners ere are known Imo as ers s and such ownership is cd b bI by y sh shares res of oC common commont I xv t These stockholders how how- tir r have hare the same samo worries and anti re- re q 61 o the tho as aim any Y borrower common stockholders stockholder n 9 s yet Jet gete the e earnings after afier taxes intermit inter- inter mit t and expense 5 are ale paid yet got these t I stockholders g gall get et nothing ess lust all these thebe other othor things thins ore Ire 81 p Paid al dof d. d or of o b u n course there thero must be ho comI corno com corn I stockholders In order that wo the I tr buy uy mortgage 6 a go bonds hut but ord- ord r k Ie fW stocks stock s are not s sult- sult t tit for I or r small investors tors except ut unItt un- un n- n cl which I will now low t Iu other words the cone comIl corn con e Itt ten s Il tock Block Q o of a cor corporation 1 should r tar Car f a as s Po JO lc he owned by en a Who 4 i ien 3 arc directly opel operating Ung tho the t ss rho sc ai are the lie men mell who j t bo arc are entitled led ledo jo o o rile Uio profits and anda Shout i iO 4 I O tit a d suffer BUrrer file tho t c losses Inno 1 rove I IC t C n o rs who have havo nothing to With Alth tithe ther o the business are arc aror P I to r eat to profits nor norlo 1 std Id I 1 me c made mado to lo o suffer tu u losses r o r j bf bul buli offs are aro justified titled In n ills ills- In 5 th lr i bonds and In lu the Tile or of I i PUblic U Utilities and certain 4 t 3 are aro Justified in k C the e Pre Preferred stocks clocks to tho time pub pub- I but ll tier a is considerable ques- ques i a r as to tho ho advisability of small ht r tC 4 ors ons 8 buying common stock i in n companies by which thc they aro are not employed or or ar are not In an any wa way connected WHEN lIEN TO BUY llUY STOCKS The capitalist can afford to buy common stocks blocks I su eu a l new compan company com corn parry pan is formed fanned or when additional treasury stock Is issued The Tho own owners owners ers ems of oC a and its friends are justified lu iu protecting tho the market market market mar mar- ket a at al t all times limes borrowing or selling selling sell sell- ing as their judgment dictates It Il however is very questionable I whether the small investor should I hu buy common stocks except during luring i depressions Time The majority of or new companies fail or are aro reorganized in mn which case tho the common ers are either wiped out or aro are ass as as- s Surely small Investors usually usually usually us us- make mistakes es in iu buying common common com corm mon moo stocks during durigg gOOd times limes when wages are ore high and and money is ful Tho time wh when n you have havo money money mon mon- ey to lo invest cst is la usually t he be very time when you should not invest cst in common stocks It Is usually unI unsafe un un- I safe saCe to buy common stocks during durins pl prosperous tim times B when the tho public is ia bullish It Is la always dangerous u U I to buy stocks when whim people ha have m made dc a lot of money from buying stocks The Mime very ery fact that your our friends have haye mn ido money buying common stocks s signifies that it is too late lato for Cor you to lo tr try thorn them For anyone to lo buy common stocks because because be he- cause causo hi his hia friends have bought them and have mado made money is is' is like o a farmer planting potatoes In the time fallI fall Call I because Cr have havo just t gathered of II and sold Bold at a profit a harvest ost potatoes Yet Y-ct when buying common commo stocks c. J of investors s buS buy thrum them they aro are at when whon at tho the wrong time their halt highest sl prices and sell Boll them at the wrong time when they are aro areat areat aroI at tr ir lowest prices I u n s locks The Tho tone time 10 to buy BUY uy common u Is during Buring a panic or when hen business is very vory bad and there thero Is a large amount of unemployment The Dhe time timeto to buy common stocks is when bearish and your Is everyone O friends are arc tolling of or the tho m money one y which lost In tho limo 8 stock ock which they y haw about times cone como market These rhe They are times In ter five rI years failing and when money big m is s ti tight banks anka ht and are ale it Is almost 1 imm im- im 1 It Is borrow to I for thorn Thom stocks buy huy common safe safo to perfectly it at such a z time as that first bc- bc soiling Belling thou then such stocks are c. c lust secondly second second- t r ro and real value below their investors the then 1 can cam perform per per- perform ly because by br buying such form a real leal service of or of mule mac way I stocks The Time only sure SUle I 1 the stock market Is 18 Isy in ing a profit in lu render pender II a aI aby buying when you can by y and soiling buying an I real service by hy render real service ico when you can li eight Continued on page I Buying Stoc Stocks s For FOI Profit Continued from page pase one ono b by 01 OI or course some 1 people for nothing noth sometimes got gel l noth-I noth ing but this lIlls Is 5 gan gambling and anil not Tl lI Truly Clu Christian people dont don't want to sot bet their money in is an any s suet ucK Such Va way to tho detriment of or people The investor vcr who stores up cash dUlin during a aIme Iline I line hue of prosperity such as wo we aro arom in m toda today and thEn freely invests mone money f during i panics IH per per- forms torIn a l real ical service to his fellow fellowmen fellowmen fellowmen men and is richly rewarded re there hero for or lIe He performs the samo Service lS ts' ts docs does the tho ico Ice man matt who stores upCo up UI upco co in Muter lutor when It Ii is s a n nuisance u n order Older that i my be bo available in tie e summer to make maim life liCo more moro com com- ort blo for Cor all ali of us WHAT CO COMMON STOCKS TO ro BUY nuy When tho the panic comes the tho tines quos ton lon naturally arises a as to what corn com cornmon 1 mon stocks to buy Brokers and lends will have havo many lions at sue such times e. It Il however leyer lever Is questionable as to how much at- at should be ire given to them Tips givon In Ina a panic aro are moro more trust or thy than the tho tips given during luring a oom but hut the they are aro still atm tips lils Moreover Nero More vet over at times tho the tendency isto is isto isto to buy huy stocks which need help holp the tho cast east rather rathor stocks which need the most As at such times jail all ll tocks s. s sell below their real roal value it itis itis itis is clangorous dangerous for tho the small inti estor 0 o do much picking or choosing un- un tess ress he lie Is well equipped with statistics statis statis- tics or os a subscriber to some sta- sta investment service sonico Unless it t is 15 a stock stuck in some local company compa uy with which ti ho he is well acquainted all investor should confine hi his hispanic panic manic purchases to stocks listed and actively traded in on tho Now New Yo York k Stock Exchange Moreover ho not confine his purchases purchased to only ono one or two stocks but should m y at least ton ten in order to diversi diversify fy his investments A simple rule is isto isto isto to take tho the ton feu which over a c r-I r lain tafu period havo have witnessed tho the trading Tho The daily dally papers give not only the quotations but also the number of shai shares es sold each Jay day Therefore an any investor can select elect the th-e ten stocks of which there live boon been the amount of jelling Selling These stocks aro are aro the ones which are suffering the time most and need iced tho Cho rust 1 JI lp Therefore au iMi investor can render tho the most service and secure the tho greatest profit b by buying these ton Even Evon Evenin in s of panics it il is dangerous to buy stocks on margin or Jr r on borrowed money When hen one bu buys s 's on borrowed money he is apt to lose his perspective and get sel rat lat This especially applies to people who bu buy on aD margin Both bankers and brokers are aro very pleas pleasant ant when money is easy and stocks are going up but they are aro compell compell- compelled ed to be entirely different when conditions change and panics reign Moreover this is no fault of theirs because they must be he hard boiled at such times timos Like a a. captain they must throw over the cargo in order to save the ship and crew A brokers broker's cargo consists of his hiS' mar mar- margut margin margin gin gut accounts I Therefore i if you Oll dont don't want to run the risk of or being thrown overboard for pay your OUI stocks in full carry them away any and put put- them in your safe dep deposit sit box There is only one thing timing more easily frightened than a broker and that thatis is a pair of brokers rime Tho same samo primeval laws apply to Lo Wall Vall Street as to the jungle It Is a. a case caso of the tho survival of the fittest and amid all ill are worrying lIa naturally t ur lIy about abou t the them themselves selves sel with little regard for theother the the- theother other fellow Therefore only those who know how to swIm should go Into deep In er words unless you aro are n a broker dont don't bu buy more than titan you can pa pay for x CONCLUSION This advice Ice is especially Im Import Important ort ort- ant to heed at a time like this Altho Al- Al tho there thero has been talk in the newspapers the months regard regard- tug lug ono one terrible break in tho the stock market yet the stock market l Is still vor very high The Tho break of March 1 based on the number of points was large averaging about ten points for Cor time the rails roils and fifteen points for forthe forthe forthe the industrials but there thero was a considerable con con- blo rebound Nol No ins ing recent fluctuations the market marlot marketis is still high However my real reason for not nol recommending the tho purchase of t Stocks toda today Is the tho conI condition con con- of or general business As I previously stated slated tho the time to lo buy huy stocks is during tho the garly part of of ofa a a period of depression when general business as registered by the tho Bab- Bab is well below tilie normal line Today loday the regis rogis teas tel'S business as 10 above normal Tills based on previous history suggests suggests suggests sug sug- that now mio i is h tho time date to sell common stocks stocks' than to bu buy them IL- IL I |
