Puslapio vaizdai
PDF
„ePub“

:

more to the advantage of the issuing corporation than to that of the investor who is expected to buy it. Banking houses are unavoidably in the position of having to satisfy first of all the source of their material, and hence the source of their profit.

For one illustration, investors are bombarded with offerings of long-term, lowrate bonds when money is cheap, and with short-term, high-rate bonds or high-rate, callable preferred stocks when money is high, whereas the investor's needs would be better satisfied by the reversal of these combinations. It is obvious that such reversal cannot and will not occur, but it does not logically follow that the investor must accept the situation blindly. At all times there exists a vast supply of previously distributed securities, suitable for nearly every conceivable need of the investor, which is neglected by banking houses for the simple and understandable reason that it does not produce for them a reasonable profit. The real profit comes from new issues.

The argument is not here advanced to ignore new issues, but rather to recognize their characteristics clearly and to supplement their purchase by a judicious selection of other material in furtherance of a purpose to invest efficiently by increasing capital.

The individual investor is under no legal restrictions in his buying, and he should formulate his own policy by independent thinking. Once he undertakes to do this, and makes it known among the salesmen who call upon him, he will find that these same salesmen are valuable allies. Perhaps the salesman whose activities are limited to bonds, for example, and who always commanded the bulk of the investor's business, will be given a lesser amount under a new efficient policy than under the old casual policy. This may be a cause for regret by the investor because he likes the salesman in question, yet it is a fair assumption that this very salesman, if his conception of his value as an advisor be not clouded by his desire for profit, will cheerfully recognize the merits of the case, and under the spur of competition become more valuable within his field than before. Put a salesman on his toes, and he reaches his peak of efficiency.

It is trite to state that bonds, by and large, will not produce an increase in capital. They are not intended to do so. In rising markets they should increase in value, and can be exchanged here and there at limited profits. It is a fallacy that their redemption at a premium produces a real profit, because the mere fact of redemption usually indicates a lower rate of return upon the succeeding bond as an offsetting disadvantage.

In any event, the average bond has a lifetime which is spread over several market cycles, and at maturity it is worth only its face value. Bonds should be the indispensable backlog of most investment portfolios, but it is to the common stock that the investor must look for his real appreciation. There is no good reason to disassociate investment quality from common stocks; and, while it may be true that many investors have fared infinitely better in their bond ventures than has been the case with their stocks, it is probably due to the exercise of substantially less prudence in stock buying than in bond buying. This article being suggestive rather than conclusive, no effort will be made here to lay down any extensive foundation for guidance in buying common stocks, but in lieu thereof the broad recommendation is made of certain types which are capable of sustained appreciation in value.

The stocks of well-managed banks and insurance companies are among those conservative investments which have had magnificent records of appreciation in value and growth in income. Banking and insurance are fundamental underlying businesses, capable of a growth which is measured in terms of the growth of the country itself. Common stocks of indispensable public utilities, enjoying virtual monopoly of operation in growing territories, seem certain to endure and to progress. Common stocks of genuine, internationally operating investment trusts are peculiarly susceptible of tremendous increase in value, in proportion as their operation is based upon sound banking and economic principles. Material such as this, judiciously selected, combined with standard investment bonds in the investor's portfolio, will have a distinct tendency to increase his capital, and thus render his investing more efficient.

ARTHUR W. JOYCE

[graphic]
[graphic]

Willard Storage Battery Company

Mr. J. A. House, President,
Guardian Trust Company,
Cleveland, Ohios

Dear Mr. House:

Some thirty years ago the Willard Storage Battery Company, a growing concern, moved their plant to the city of Cleveland as they felt that Cleveland then and in the future, offered them better manufacturing and distributing facilities than did their former location.

That their faith in Cleveland as a manufacturing and distributing city has been well justified is best illustrated by the fact that the plant investment has grown from an initial one of some $50,000.00 to one of something over $7,000,000.00 in 1928.

Our faith in the future of Cleveland as a manufacturing and distributing point is best exemplified by the fact that during the past year there has been added to our factory a unit 135' x 215' four stories high, at a cost of some $350,000.00, and that at the present time we are asking for bids on another unit which will cost well over $200,000.00.

The outstanding advantages of Cleveland as a manapufacturing and distributing center have played a large part in enabling us to increase our business to its present point proximately 12,000 batteries per day.

Yours very truly,

WILLARD STORAGE BATTERY COMPANY

[ocr errors][merged small]
[graphic]

President

SEAD-RUBBER

Willard

INSULATION

CLEVELAND has been chosen by many great corporations as an ideal location for the manufacture and sale of their goods. Continued growth and increasing prosperity confirm the wisdom of this choice. To all who do business in this section the Guardian offers an outstanding banking service.

GUARDIAN TRUST COMPANY

ESOURCES

CLEVELAND, OHIO

MORE THAN $150,000,000

[graphic]

NEW ENGLAND'S

TRUST COMPANY

The CHALLENGE Answered

CA

ANONICUS, war chief of two thousand savage Narragansetts, sent the handful of Plymouth Puritans a snake-skin filled with arrows - a warning and a threat. The same snake-skin, but stuffed with gunpowder and bullets, was Governor Bradford's answer - a bold reply to the challenge, in terms that were unmistakable.

Early New England

thus defined her attitude

towards disturbers of

the peace. Through the years New England has more than once clearly demonstrated the vitali

ty of this ideal... fear

less, uncompromising,

[graphic]

maintenance of law and order. brochure, "Convenient Banking"?

1928

17 COURT STREET, BOSTON, MASSACHUSETTS

[merged small][graphic][merged small]

setting; place it where wages are not inflated by big city living costs, where workers are not fatigued by congestion and long journeys between home and factory, where land is plentiful and cheap: this is the small community's invitation to industry.

How has the little town come to assume this new and important industrial role? The urgent necessity of doing something about the big city's oppressive congestion is one reason. Modern transportation-hard roads as well as fast railroad freight service is another. And quite an important element is the ample, economical electric power

which is assured the small community by the widespread electric systems which blanket the countryside. Subsidiaries of the Middle West Util

ities Company have brought electric service to more than three thousand small and medium-sized communities and their surrounding rural sections in the East, Middle West and Southwest. In so doing they have not only served the towns whose growth has thereby been encouraged; they have also served the industries which, by locating in small communities, have been enabled to operate under less expensive and more pleasant circumstances. Widely diffused power has helped give the small town its present significant position as industry's new frontier.

[blocks in formation]
[graphic]
[ocr errors]
« AnkstesnisTęsti »