The Bridgeport times and evening farmer. (Bridgeport, Conn.) 1918-1924, 1918-02-26
WatsOn'S
Weekly
Letter
OBSERVATION-DISCLOSURES

Financial conditions have been IA
Vorable to a specially market, and
prices Of attractive Industrial issues
are higher than last week because Of
a recognition of their increased value.
Many domestic factors still support
conservative constructive action in tho
market. We refer to the pending
railroad legislation, evidence Of great
or coordination in Washington war
work, definite tendencies toward a
settlement of the American labor
problem, gradual removal of the
transportation congestion and the ad-
vent of mild weather. These features
have been operating for increasing OPP
tinism among investors. and outside
interest has moderately responded to
improving movements in the market
for securities, tTYithstanding the I'M
easiness which prevails with regard to
the possibilities involved in the much
advertised German drive against the
Allied western battlefront, and the ad-
verse conditions de- Hoped in the Rus
sian collapse.
The closer approach of the next
Liberty Loan issuance is an important
factor. Some investment readjust-
ment in the stock market would seen.
to be necessary under a rate of inter-
est higher than previous loans; but 1t
is considered beyond question that
4 IL per cent. would insure the sue
cess of the new issue, owing to the
fact that such a rata would put it on
a business basis.
-
Corporation Bill at Washington, prop
erly amended, would doubtless modify
the investment REIMBURSEMENT require
ments associated with the flotation of
the new war bond issue by providing
ways and means whereby war essen
tails might get needed working capital
without strain. This war finance pro
position may be regarded as official
recognition of that initiation to which
we have so often referred as certain
to develop in the United States before
the war was over, and which finds
bullish expression in stocks.
There is a strong impression that
the rise in the stock market has for
one of its underlying influences this
very initiation tendency, more so than
possibilities of early peace, which
would appear to be postponed now
that Germany Is able to avert immin-
ent economic collapse by drawing on
peaceful" Russia for new supplies.
The view is held in soma market chan
nels that while peace may not come
during the current year, the general
movement of the stock market, which
discounts great events far in advance,
may be to anticipate its coming dur
ing 1919.
There are two or three classes of Sc
curities which it would appear wise
to prefer in seeking buying oppor-
tunities during declines in the market.
The railway equipment stocks are I'M
deniably attractive both as war and
peace issues where the management is
good in the companies concerned, and
the margin of safety over dividend re-
quirements is substantial. There has
been investment recognition of this
outlook during the past two weeks.
The demand for ocean transportation
is looked upon as indicating a period
of large earnings for the shipping
companies, whose securities are re-
ported to be well taken. Consumption
Of copper metal is said to be steadily
expanding, and production has diff
Guilty to keep up with it. This is like
ly to be experienced for a long time
to come and we believe stocks of lead
ing producing companies should be
bought on recessions. Where steel in
stitutions have large margins of safe
ty in earnings over dividend needs
such as u. S. Steel, Republic Steel an6
Lackawanna, little risk would seem tt
be involved in making conservative
purchases of their stocks during set
backs. The undertone of the marke
is good, and in the absence of unex
pected news of an unsettling charac
ter we think it will continue so.