The sun., 1919-06-16
INVESTMENT VIEWS
AND THE OUTLOOK
Market Letters Show Wider
Difference Of Opinion on
the Future.
SOME EXPECT QUIET DAYS
Note of Caution Still Con-
tinues to Run Through Many
of the Forecasts.

More than at any other time since
me beginning Of the big bull market, |
y there evidence of a wide difference OF
opinion held in brokerage, houses as
TO the future course OF the market. For
time at the outset of the upward
movement a few months ago all were
advising caution in commitments, but
after the market had been we'll felt out
they turned almost unanimously to the
position that bull market was in
progress. That they were right was
evidenced by the continued rise.
Within few weeks some Of the more
conservative have shown signs Of a lack
OF confidence and their market letters
have reflected a somewhat pessimistic
attitude. 1t was then that the division
Of opinion became most apparent In
the weekly letters and from that time
the gap has been growing wider and
wider, the optimists urging purchases on
every single dip and the opposing group
advising sales Of almost everything. EN-
cerpts from the latest batch OF market
letters sent to the clients of various
stock exchange houses follow:
Lamborn & Co. say: I'VE should not
Witnessed In the market after so pro-
ionged q succession of million share
days, permitting 1t to get its second
wind, SO to speak. The peace treaty.
according to the general view, should
be signed soon. and the impetus OF this
good news will then have been spent. II
not already fully discounted. Advances
may run more to specialties, with the
general list temporarily neglected pend
ing new developments There is MOTH
Ing, however, to warrant the belief that
the bull market is over, and the reac-
tions which will occur more frequently
In the future are merely logical Incl
dents in the upward swing, which has
vet to reach its climax. The stock mar
ket In characteristic manner Is discount
ing record breaking prosperity, such as
the country has never witnessed, based
on large crops. big gold reserves and
our unique position as a creditor nation.
Our industries are rapidly recovering
from the transition period Of war to
peace, and labor is fully and profitably
employed as a rule. Even in such back
ward branches as copper and steel, there
is every evidence that the turn has come.
Copper metal Is now firmly held at over
1Sc., which explains the sharp advances
In leading shares the past week. We are
still of the opinion that this group of Sc
curities Offers comparatively safe pros
poets for combined speculation and in
vestment since a return of dividends to
former levels is only a question of time"
Forces behind Market.
Hayden. Stone & Co. say: The prin-
cfpal force behind this market has been
expansion and imitation. This applies
as much to market credit as to business
and commercial credit. Put any obstacle
IN the way OF obtaining this credit and
Immediately the market Is deprived OF
much Of its ammunition. This Is what
has been taking place the last few days
II means. In our opinion. the end OF
the spectacular. perpendicular advances
This Is not saving that the advance &c
date may not be justified. but compare
prices with those OF six months age
and 1t will be seen that the marlet ha.
discounted a good deal in the way oil
business Improvement. This improve.
ment Of course has already been large In
some lines. but rot in all. The state
ment of the Steel Corporations untitled
orders is evidence that business has ye
some way to go before fully justifyinl
the markets advance. 1t will not do q
bit of harm for the market to rest or
It's oars for few weeks and ever
months, and give business a chance t
catch up. Two things occur to US. espe
claSy INDUCING caution. The profits tina
the stock market has been anticipating
are largely based on the expectation o.
foreign demaSd. yet students OF condi
tons abroad pr->tty generally agree tina
Europe as yet is ~ no shape TO take 6
very large amount " our goods. Ger
tainiy we must preAare ourselves &
loan her the whereW'ithal before W,
can expect her to do so. Secondly, labo
Is becoming so unreasonable in many o
its demands that II Is likely to eat VI
much of the profit, and thus reduce thu
incentive to new enterprise"
Goodbody & Co. say: We ~hav,
changed our opinion since last week
We then looked for a two sided marke
working toward a higher level for mos
Industrial stocks. We now look for ;
two sided market working toward ;
lower level for nearly all classes o
stocks. There are numerous reasons 70
thinking that the present bull movement
has terminated for the time being I
not for a year or two. The Federal ant
local banks have decided that specula
tion in securities is reaching the DANCE
point and they have begun to rails
money rates and In other ways to max
the way of The Spectator hard and OH
present prosperity rests largely upol
Europa's buying power. This In turl
depends largely upon her credit or abil
ny to produce goods to exchange 70
our goods
J. S. Bache & Co say Striking move
ments of considerable duration in stoc
markets are supposed to forecast COMM
events, whether good or bad. and by a
Increase or decrease in the price level [
foretell something near what securitie
will be worth when the forecast event
are actually taking place. In April tn
market began to rise and has continue
to do so almost uninterruptedly unit
the present time. This was translate
as a forecast OF coming prosperity, @
recovery from the effects of suddenl
curtailed activities OF war. and rehabil
tatiOn and speeding up OF the peace ma
chine. While there existed great dout
at the time the rise began, that dout
has now been largely swept away an
the country is convinced that a goo
measure OF prosperity is ahead. Price
In the market have partly discounte
such Il state of affairs. The impetus {
the speculation has caused some stock
TO rise to prices beyond what their carr
ings may be expected to make theI
worth. The public has come into IL
market In great numbers and the volum
of loans is working to high level Eve
II the full measure Of prosperity has n,
yet been discounted the market techn
cally should have a period of rest an
reactions. even though general cond
tions throughout the country and II
strong position OF many companies ma
warrant ultimately higher prices"