Show I Babson's Authentic I I Statement By Roger W. W Babson I I I have spent the day reading a remarkable book The Pictorial Pictorial Pictorial Pic Pic- History of Wall Street pages size 12 x 9 This history shows clearly that the fundamental facts underlying investing during the past decades decades dec dec- ades ales apply appl equally today This is an anniversary of the New York Stock Exchange founded just years ears ago Let me describe ten facts 1 SAFETY AND income come from careful selection and supervision of your in vestments Profits come usually usually usually ally from gambling although although although al al- though your yom total investment will rise and decline in value along with ith the Jones Dow-Jones Av Av- But big profits come from buying into new ideas new discoveries and scientific ic developments de To make big mone money read scientific journals journals journals journ journ- als rather than ordinary fi financial financial financial fi- fi news 2 Newtons Newton's Law of Equal and Opposite Reaction can be depended upon when the AREAS involved are properly considered This was first noticeable noticeable noticeable no no- noI I when African slaves and gold were the only com corn I traded on Wall Wal WallStreet WallStreet Street years ears ago I believe that we will vill continue to have periods of decline and depression depression depression depres depres- sion during the next few years ears Congress can legislate only to temporarily postpone declines but cannot change the AREAS involved 3 A STUDY OF Wall WallStreet WallStreet Street history during the past years ears shows that dips inthe inthe in inthe the stock market have always always always al al- ways come unexpectedly with without without without out warning This was true truc when slaves gold or stocks were selling abnormally high as at present Such bear markets markets markets mar mar- have alwa always s 's followed great wars from Napoleonic Days Das through world war I. I No such bear market has yet ct occurred occurred occurred oc oc- oc- oc following world war II The J D-J Industrial Average Average Average Aver Aver- age was around in 1942 and has climbed climb d fairly steadily upward standing around today 4 Special groups of stocks have acted differently during the past years cars The demand demand demand de de- de- de mand for slaves and land declined declined declined de de- from 65 1860 while the demand for gold and railroad stocks was vcr very active Then being popularized over-popularized as the electronics and space stocks are toda today they had a terrible slump with ith most of the companies companies companies com com- going into receivership Most of the stocks in the same group suffer more or less together together together to to- gether but different groups can act very differently 5 BONDS other othel than governments gov gov- were almost nonexistent nonexistent nonexistent until 75 years ears ago when corporation bonds began to be issued A study of quotations shows that the bond market is usually going down when the stock market is going up Careful investors will hold I both stocks and bonds in a proportion varying according to conditions For instance good corporation bonds can now be bought to yield 4 4 percent while the stocks of oC the same corporations will yield today 3 percent or less i Hence the switching of stocks into bonds has now begun on Wall Street and it will continue contin contin- ue until the stock yield equals the bond yield 6 Naturally everyone who I knows Wall Street will advise ise diversification of all kinds I Dont Don't put all your mone money in stocks or bonds Real estate can be bought in the Central West and Southwest at 75 per acre acie One must pay more to get land in an oil or mineral terrain There never will be beany beany beany any more moie land If you can cangel get gel through through- rent for pasture rights lights to pay taxes bu buy such land When buying land be willing to pay for adjoining fresh water Someday fresh freshwater freshwater freshwater water in quantity will almost be liquid gold I BELIEVE in African gold stocks also good Mutu a 1 I Funds and especially insured savings to pa pay 4 4 percent I once asked Thomas A. A Edison who was the greatest inventor He replied The man who invented invented in invented in- in vented compound interest The lower Manhattan Island with Wall Street later its center center center cen cen- ter was bought from the Indians Indians Indians In In- for a few trinkets valued valued valued val val- val val- at 24 If the Indians had taken the cash and invested it at 6 percent interest compounded compounded compounded com com- pounded quarterly this 24 would today amount to around 16 billion dollars So dont don't forget forget forget for for- get the great power of or compound compound compound com com- pound interest even if the bonds yield you only 6 4 percent per per- cent 7 Seek Seck the professional opinion opinion opinion ion of investment advisers who have been in business over 50 years and have made money for their clients Tell your adviser that you want to diversify f according to the basic basic bas has ic is fundamentals but that you are willing to do some sonic gambling garbling gam gar bling by buying now into companies which may have a abig abig abig big future |