New-York tribune., 1921-03-26
Buys His Bonds on Margin

Fvnancial Editor, The Tribune, lSk
Nassau Street, New York City.
Buys His Bonds OH Margin
Question: beg you to advise me in re
gard to my purchases a deferred pay
ment basis Greatly margin>. believing that
| bonds were cheap l bought the following
eleven bonds and paid 20 points Plus Oh OF
each, with full expectation OF being able &c
pay $400 monthly on the total until entire
ly paid for In selecting the bonds de
sired long term bonds, 80 that my family
could derive some income for great many
years without reinvesting. l was guided
by safety. price and marketabiity. In AT
am appealing to you. rcr expert advice
Kindly inform me which I should keep
and which ones should sell. also give a
short list of some grade a absolutely safe
bonds non-calable preferred stocks
substltutions or additions. II any. to
sstrengthen my holdings: $1,000 United
Atchison Is. iss5. 4; s.. 900 Pennsyivania tSI
Railroad 6s. 1858, 81; $4,000 Chicago. Rock
Island q Pacific 4s. 1888, 7s1s; $1,000 New
York. YorN Central ass. 2ols. y; $1,000 New
YORK Telephone general 41as, 1899. 7Si5
$1,000 American Smelling and Refining 5s
1897. 70: $1,000 Chesapeake & Ohio con
ver.ioio Os ls4s: Ssa $1,000 Wilson & Co
Texas e. Pacific 6s, 1885. IS. prefer to
BUY OF various companies rather than of
one one only. y ID, DO you consider Belgian. Nor
ones mentioned above? L know that
would feel easier If l had your unbiased
expert opnion.-G. I.
Answer-We think your list we'll
diversified and in general good. The
New Orleans, Texas & Pacific IS are
somewhat speculative. And you might
be able to get a bond of some other
road that would give you greater
safety although not so high yield
we consider Virginia Railway first 5s
due 1862, Southern Pacific Central
Pacific as due 1949 and selling around
II, to be high grade investments. and
among the preferred stocks. We think
American Locomotive Z per cent pre-
ferred, Republic Iron and Steel per
cent preferred and Montana Power 7
per cent preferred, good investments.
We believe the Belgian, Norwegian and
French IS are we'll enough secured
for you, especially the first two. Watch
the new offerings Of domestic issues.
Tyro Confused by Varying Advice
some information in regard to stocks and
bonds and tell me where [ could get some
reading matter in regard to same. have
hecn reading your letters daily. but dent
seem to get the point. l expect $4,000
shortly and would like to invest it in a
aons van u 70 te ms sry
work any more, so | would like to get the
best earnings possible on my investment
or stocks. l have some Liberty bonds
expect to hold. I have been told to keep
away from stocks and put my. money in
the savings bank at per cent, but ! don't
think that good advice from my point
OF view. I thought somewhat of real es
tate at per cent for three years. and
estate. so there l am. And then along
comes another friend that tells me there
gro lots OF good offerings that would give
ne ] 0 per cent on my investment. but not
sven that one can tell me how to go about
reader Of your paper Of asking your kind
advice. I notice in to-day's issue Tide
vat. water on Company tsn-year 81 per cent
cent. Would you kindly explain the above
to me? ?-R- e.
Answer-Get copy of the Prin-
ciples of Bond Investments, by Cham
bcrlain, published by Henry Holt &
Company, and Putnam's vestment
to you. If you are really a careful
reader of the investment column Of
The Tribune, you will know that you
can get safety of principal and of in
terest, together with marketability,
which means that you could sell your
bond at any time you needed, in invest
ment bonds which yield from to per
cent. Almost any investment which
gives you 10 per cent is speculation,
in our opinion. If you have $720, for
instance, you can buy Southern Pa
cifc-Central Pacific A per cent bond
which natures in 1949, and while you
actually receive only $40 year on
your investment of $720 you will get
$1,000 for the bond at maturity, so that
what you get at maturity over and
above what you paid for your bond, to-
gether with the $40 year that you re-
ceive on your coupons, gives you a
yield Of 500 per cent on the invest
ment. Another bond that we consider
safe, having little higher yield, is the
New York Central collateral trust Is,
due 1880, selling at 1o1, that is s1,o1o
will buy you bond Of which you get
$40 in interest each year until 1880.