The Washington herald., 1914-02-07
THE MAN WHO
STOOD PAT

| (Copyrisht. lsii. by c VI. Keys. New York.
There was once an investor who in
herited quite a bit OF money. and
straightway made haste TO take good
counsel and put his money away where
nothing could happen TO II. He bought
the kind of bonds and stocks that We're
so sound and high priced that even his
banking advisor told him he was taking
unnecessary precaution- IL was more
than ten years ago. and prices at the
time were high. In fact. they have since
seemed 10 be rtdiculously high. There
is hardly a security in his list that could
be sold today within ten points OF the
price he paid for 1t.
About fve years ago he read an article
about the high cost OF living and the
price of securities. He began to feel that
he ought to get more for his money than
he was getting on his investment He
went to the same banker TO whom he
talked before and with whom he had done
business. He had had nothing to do with
his banker for nearly five years, because
he never changed the investment or paid
any attention to I. He laid his list be-
fore the banker and asked him what he
ought to do about the matter.
The banker belonged to an Old-fash-
ioned school that believed in standard
securities and nothing much else. He
looked the list over critically and dispas-
sionately. He took his pencil and figured
the amount of income and also very
roughly the amount for which the fund
could be liquidated.
He turned to his visitor. at the end
of his inveNory. and said:
THE income you are getting is 4b per
cent on the amount for which you could
sell these securities. 1t is only +l0 per
cent on what you paid for them. do
not know how you can do any better.
and have the same degree of security.
There is not a security in your list which
Is in any way dangerous or in the least
likely to give YOU any trouble. Some
time perhaps you will see some recovery
in prices: but that is incidental. The
real point is that you cannot sell this
list and buy anything else equally safe
TO give you a larger income. l advise
standing pat
The customer went to another advisor
and was broadly urged to sell out and
reinvest in securities that would yield
nearly a full l per cent higher he
came back TO his first banker and talked
II over. When he got through he went
away, took his securities with him.
locked them up in a safe deposit box and
forgot about them.
A year ago the banker wrote to this
customer saying that in his opinion con-
ditions pointed to a large decline in the
prices of all standard bonds and very
high grade stocks. and that it might be
profitable for the investor to exchange
out of his high grade bonds particularly.
into some short term obligations. running
for a year or so, which would naturally
preserve their prices better through a
period of decline. The investor wrote
back asking the simple question:
rs there any one of these securities |
you now think will give me any serious |
trouble II l continue to hold them:
The banker in his reply stated that |
there was not and that his suggestion |
was merely a suggestion in line with the |
former desire OF the investor. In his |
reply to this letter the investor said: |
1T will take your former advice and |
stand pat until you tell me there is some |
thing here that ought to be sold because |
Of tlack of safety. 1 can work along on |
my income as long as l know l am going |
10 get II, but IL you tell me at any time |
that there is the slightest doubt about |
my getting any part of it. you can have
OF my securities you want for
sale"
That is typical investment Of the solid, |
continuous and abiding sort. II falters |
1t nothing except the impairment Of
value. 1t seeks no profits from changes |
and adjustments and adapts itself to /
changing conditions only as necessity die
tates. 1t founds itself solidly on value |
and faith and upon nothing else. 1t /
stands when everything else falls, and /
survives with quiet ease the madness Of
, booming market. or the sadness Of a
depressed and panicky market. In fact,
I cares nothing for prices. but every
hing for values. 1t is the kind Of invest
nent that makes a nation great and the L
Individual investors Of that nation happy.