New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-06-04
Faith Will Be Wasted if
We Have a Bull Market
(F'rom a market letter of 4. A. HouS-
man Dc co..

(From market letter of A. A. Hous-
man &c co..
To say that stocks should not be
sold as a gamble in civilizations
great misfortune is is not the same
thing as to say that they should be
bought as speculation in the fan
tastic and unreal profits of war. But
Wall Street, with its passion for al
ternatives, CONSTITUTES advice against
selling as a tip to buy, or, conversely,
an admonition against rash specula-
tive buying as a warning to sell.
Recently we said that in our opln-
ion stocks should not be sold by any
ono who could afford not to do so. Our
reason for saying this was given. True
values will survive success IN war.
Therefore, there is no reason for the
holder of stocks who believes IN his
country TO be uneasy about them.
On the other hand, if we should fail
at war, the profit man might make
by selling stocks short could not be
safely invested In anything-not even
in a safety deposit vault; wherefore,
to sell stocks on account of war, from
a distrust of what may happen, is not
a rational thing to do. We added
that for purely patriotic reasons the
holder of real stocks who could af-
ford to do so ought to retain them
instead of passing the loan to an
other.
Since then there has been a rise in
stocks, induced by an impulse to spec
ulatc in the profits Of war. Optimism
is an uncomfortable habit of the
American mind, but it is easily car
ried to excess, and from an excessive
or ill-considered optimism there is
bound to be reaction Of corresponding
intensity. We did not mean to say
that because people should not sell
stocks they should, on the other hand,
engage in a bull campaign to advance
prices for profit. We do not believe
in a bull market at the present time.
1t is rather a liability than an asset.
1t uses up bank credit under condi-
tions which may bring disagreeable
experiences. 1t distracts attention
from the main business of all of Us.
which is to win the war, and it leaves
us exposed to the hazards Of disillu-
sionments. We shall be very fortunate
TO be able to maintain values with
out trying to initiate them. We are
not richer, really, when Stock Ex-
change prices rise. We shall be alto
gether better off to avoid impulsiye
buying and selling and get the ex-
change Of securities down to basis
Of actual trade between those who
have money to invest and those who
have securities to sell. We need to
worry as little about the profits that
are unexpected as about the future Of
true values.
We urge those who can TO buy the
better securities with unlimited cort
fidence in the outcome of the great
adventure upon which we have
launched ourselves, but to buy them
for keeps, as a stake in the result,
rather than for a turn on which i'm
mediately TO sell out. Nobody knows
how far we may have to go with war
loans. Every country is now com
mitted to a policy Of unlimited La
bility on account Of the war. If two
billions be not enough it shall be five,
and if five be not enough we shall
have to make it more, up TO ten or
twenty, or to the last dollar we have.
We shall need at times all of the
faith we possess IN ourselves plus all
the optimism of the American tenn
permanent to believe that values will
survive this test. Let us now save a
little Of that faith and optimism
against the time inevitable when we
shall need perhaps more than we
easily can summon.