The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-01-14
THE STOCK MARKET

- 4
~HE time appears to have been
reached, in the. stock market,
when ordinary measures Of value
are to be discarded. Such a time al
ways comes when bull campaign is on.
Wall street gives way to hope of great
things to come and as the outsiders rush
inland buy stocks prices rise, and stories
of wonderful development come out. Or,
dinariAly a man who buys stocks, for in
vestment or speculation, is governed by
fundamentals. The. capitalization of
the company he is buying into, its earn
ing power, the probability Of continued
earnings, its dividend rate, its financial
and physical condition, and its manage
ment, are few Of the things taken
into account. No man ordinarily puts
his money into an investment unless he
expects to realize an immediate return
in the form Of dividends, or intends to
hold it for long time benefits that APP
pear assured. Neither does he speculate
on the bull side, at ordinary times, I'M
less there is something tangible upon
which to base expectations Of rise. #
In periods Of great prosperity our
country always goes in for speculative
excuses. Then it is that the old rules
for the measurement Of value become Of
least Importance, and men buy, and sell
stocks, not on what factor Of actual
worth may be found attached to them,
but upon the sentiment Of the day. The
purely gambling feature of the street
becomes more apparent.
I Today there is the indication Of a
greater bull market to come. The bears
exhausted themselves to break the mar
ket. There were influences on their side
that in an ordinary time would have
sent prices down quickly. A host OF
scandals filled the street, money condi
tions were against a rise, and an opera
tor given to sensationalism, but pos
sessed Of considerable influence never
theless, was openly in arms against the
Ibulls. The market weathered it all
The new year came in with everything
rosy and the campaign began. Wher
;. it will end no one can tell.
), 1t would probably be useless to soun'
any warning to the public. In tn
| great rise, known in stock marke
history as the Mckinley boom, becaus
it began after the election Of McKinle
to the presidency and the defeat 0
/ Organism, prices began to creep up 0
: legitimate influences, for it was clea
that the country was in for q perio
Of great prosperity. After time the
reached levels above their worth on an
old standard Of measurement. So hig
= were the selling figures that nothin
= could be bought to yield more tina
t about per cent, and SO the bulls mai
u tanned that the country had gone upc
3 per cent basis, that hereafter 8 p'
70 cent and not "A would be the rate of i
come upon which an ordinary stoe
g should sell at par. There were, ,stori
@ of new combinations every day, for
2 was during the craze for combinatit
is and consolidation. There were tales
. new industrials, profits made and ne
r.. ore found in mines, and great railro'
! earnings. These same stories are /
g. g, ginning to come out now. After til
rs the public came in and bought stoc
"a and the great boom was on. All &C
20 20 servatism was laughed at, caution W
y. thrown to the winds, everybody W
n getting rich, even the clerks and cho1
no. girls were making fortunes. The Nor
er ern Pacific panic brought the end.
Is, Today there is everything to indics
that the street is heading for anotl
excess. Prices are already high,
I of some cases absurdly high, yet there
be the general expectation that they Y
les go still higher. So far the whole p
- Of campaign has been to draw the P
ng lie into the street. So long as prof
&C SIGNALS dominate, there will be no hes
1 1Id unloading of stocks, but if the mar
aid can be worked into a frenzy, the
ma loading process will begin. When Il
' who know nothing about stocks,
~ buying stocks that they never heard
., before, at prices ridiculously high,
v no reason other than that they h
; 9eS heard that some one else got rich,
eo2 when all the country is hearing of
1913 wealth that is in Wall street for
''' picking up the crash will not be far
ea5 - --- -----
$50 The manager of leading mil
&c. company makes the statement tina
in requires only 270 pounds Of whea
in make barrel Of -four this year, aga
o1O ,,ono1e 1nct wear --"a 81.