Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1920-02-19
INVESTING FOR
N SAFETY AND PROFIT
Chapter I

man was as much interested in the
subject of the proper investment of
money, as the present.
Why is this? Because never be-
fore was money in the possession of
the mass of people as it is now. 1t
isn't so long ago that the expression
poor farmers" was the common way
of referring to the largest class of
the population, and poor farmer
meant poor other people as WELL
Now, all this is changed. The
farmer has prospered nightly and
with the prosperity that has come to
him, prosperity has come to all those
who serve him and do business with
him With the possession of this
money, there has swept over the
country vast wave of oyerspending
and wild speculation.It seems as If
any scheme, no matter how unsound
has been able to get the support of
millions of dollars, if II seemed to
promise an exhorbitant profit. A lot
of money has been lost and more
win be lost before the unwise owner
of money has finally learned his
lesson, and that is that Gambling is
Not Investing. / read in a recent
issue of the Saturday Evening Post,
that according to the Investigations
OF a New York concern which doess
confidential investigating IT, r,ore
had been incorporate 10
Oct --xnteh months prior to
-rseF, 1919, mere than five thous-
and, two hundred oil companies.
This concern had investigated them
n
centage were straight. The rest
were dealing in pale blue sky. The
average capital stock of such oil
companies is not less than 100000
each. II is easy to figure how much
the guillible investors of the country
stand to lose in all these frauds, If
the con men who promote them only
succeed in selling a small portion Of
their fake stocks to the public.
Understand, am not belittling in
vestment in ventures in oil. On the
contrary, / believe that investments
in the oil game is one of the most le-
Ultimate If the investor knows what
he is doing and knows that the men
with whom he puts his money are go
ing to handle 1t honestly and give
him the run to which he is entitled.
But after all II is not strictly speak
ing an Investment II is a Gam
BILE and for the present at least, ! am
not interested in Gambling.
Chapter H.
In my previous chapter on the sub
| ject of investing, / referred to the
speculation in oil that has swept the
country. referred to all this frau-
dulent promotion in oil stocks simply
because the oil business has offered
! the most fertile field to the ignorant
the careless. and the INSCRIPTIONS,
but there has been lot of money
| lost in other ventures for much the
same reason. In the first place,
the investor has not taken the time
to study the chances for success of
the proposition that he was asked to
invest his money in, and has usually
ben careless in his consideration of
the soundness of the business itself
and the efficiency and ability of the
men who were to manage it and to
whom he must look If he expects his
investment to prove profitable and
safe.
There never has been such de-
mand for organization as there is to-
day. Vast sums of money are need
ed for the development and expan-
sion of the country, and the wealth
of the country is in the hands of the
vast mass of the people. Individual
ly this money can do but little. It
can handle the small opportunities
that come within the horizon of the
average individual, but 1t must be
united and used collectively to ac-
complish the big tasks and make the
big profits that are the legitimate OPP
portunities of large aggregations OF
money
Take the average man. He may
be a very successful farmer or mer-
chant or mechanic of professional
man, and the very concentration on
his own line which has made him
successful. hasn't permitted the time
necessary for the study of the science
at that.
There are certain factors that ev-
cry investor should carefully con-
slider before he invests.
In my opinion the first and fore
most is the factor of safety. Profit
is secondary. Every one wants his
money to earn all it can but none
wants to lose money. Safety cannot
be overlooked AS / said before,
Gambling is NOT INVESTING, and
I say now that INVESTMENT CAN
BE MADE WITHOUT GAMBLING.
IN Chapter III.
Let us now consider this factor of
safety in investing to which / allud-
ed in the last chapter Of this discus
sion. In my opinion the good inten-
- Of NJ
poration are of the first importance.
If they are merely organizing q
company with which they have no
intention of being permanently as
ISOLATED; they are not on the proper
basis to solicit your investment; If
they are not investing their own
money in their own proposition they
certainly have no right to ask you to
invest yours How about their pro-
position? Is it a sound scheme? Is
there a demand for the product they
propose to make or offer? If there
isn't a demand, can one be created
without too much grief, long delay,
and heavy outlay of capital? Is
there a proper relation between cost
of production and return2 Is the
selling cost going TO be within reas-
on? How about he cost of the
plant necessary?
How about competition? The
investor wants to ask all these ques-
tions and many others. and receive
satisfactory proof that all these
questions have had the proper con-
before committing him
self.
Usually the enthusiastic organizer,
believeing emphatically in his own
idea, usually with the most honest
for, after all. most men
are honest, has overlooked the very
point of weakness which will bring
about disaster. Many promising