The Washington herald., 1912-06-15
A LESSON FROM A
SCIENTIFIC INVESTOR

Copyright. 1872. by IN. Keys)
When a man has S90.OOO0O0 to invest,
and has spent his business life In the
task of building UP that fund from rela-
lively small proportions to its present
magnitude. and has gained In his trade
the reputation OF being one % the most
! successful investors of his class, II be-
comes worth while to make a record OF
what he owns and TO draw from this
record whatever lesson one may draw.
II Is not an uncommon saying in in
surance circles that the president or the
Continental Insurance Company Of New
York deserves the reputation he has
earned not so much from any extraordi-
nary ability in the fire insurance busi-
ness. but because OF very great ability
in handling. conserving, and increasing
the invested funds OF that institution.
He now has under his administration Sc
curities worth, according TO the report
lust published by the New York insur-
ance department. SIS. 4s7,26S.
OF this total S5,Z72 $50 is invested In
bonds and Sl4.224 4o8 is invested in stocks
The following list shows all the bonds
that are held in amounts Of 100000 or
upward:
nmC.ooo Atchison Convertible per cent.
S7I5,OOo Fire Companies Building Cor
poratIon 41-2 per cent
SSSsoOO Panama Canal ; per cent
x5Os.60 City OF New York stock.
S4OsOOO New York State Canal
S242JOO Northern PacIhc-Grest Northern
Joint I per cent
ls50o General Rubber Debenturs Ala
per cent.
s21s,25O Southern Pacific Convertible (
per cent.
154,5O0 Union Pacific Convertible per
cent
$4,000 Fort Worth and Denver City 6
per cent.
II will be noticed that this investor has
leaning toward convertible bonds In
a great many insurance companies al
most all the investments in securities
are in bonds and not in stocks, but the
Continental has always been known as
one Of the insurance companies that went
in for stocks very heavily and. on the
whole, very successfully. Therefore. even
in It's bond list II likes to have securities
that are convertible into stocks.
The principal outside investments In
stocks are as follows, at market values:
H,lO4,00O. D., L & W. Railroad.
H,25sOoO. Lake Shore Railroad.
81. .2O2 OOO Lehigh Valley Railroad.
SSss. 900. New York and Harlem Rail-
road.
New York.
S5s5,OOO. Southern Pacific Company.
S5Ss.OOO. Consolidated Gas Company.
$4,000. Louisville and Nashville Rail-
road.
The whole investment in stock con-
sists of forty-eight items Of an average
market value OF about S295.OOO 1t will be
observed that the largest single item in
the list. namely, the Lackawanna stock.
amounts to not quite 10 per cent OF the
total stock investment
Here is q first class example OF the
careful method practiced by q scientific
investor who is fully prepared to take
business risk in stocks, and who at the
same time uses a great deal Of inside and
expert knowledge in making his selection,
but who. nevertheless, cannot AFFORD and
will not undertake to put more than 10
curity.
II should be borne in mind that the
above list of securities was selected for
its adaptability to the security for the
reserve funds OF an insurance company.
The same mind would probably make
different assortment for the funds of an
Individual investor.
A great many valuable hints for the
carrying on Of an investment fund even
Of the smallest sire could be gained
from a detailed study OF this list. It will
be observed, for instance, that there are
in the list practically no unknown Sc
curities, that Is, securities that do not
have recognized market value. II might
also be noted that the securities chosen
represent almost every section Of the
country and every class OF railroad. so
that no collapse In one part Of the conn.,
try or in one class Of railroad trafic could
make any serious difference in the value
OF his general list.
After all these conclusions are drawn,
however. the one big fact that remains
as q lasting impression is that not even
the president OF the Continental, recog-
mixed as one Of the shrewdest and best
students Of stock market Investment val
ues, will back his Judgment Of any one
stock to the extent OF more than 10 per
cent Of the fund which he is handling
II one forgets everything else about
this fund and remembers this one fact
well enough to apply It, Of course with
common sense notifications, to his own
little fund and his own savings, this
story will be well worth while