Connecticut western news., 1922-11-23
STOCK MARKET DUE TO \
 GO TO HIGHER LEVELS
"Have Faith in America" Says Roger w.
 Babson
BEARIsH SENTIMENT
The Staestieian Believes the Present
 Stock Market Slump To Be Only Temporary

Many traders have decided that
 the stock market has turned definite ly downward and have sold their
 holdingsI Others are hanging on and hoping. The following state ment made today by Roger W. Bab- son would indicate that fundamental conditions substantiate the beliefs of those who are still optimistic.
 There is feeling in many quar- ters that the rise in the market ia over", says MT. Babson, "and that it is headed for a long panic. l am being asked on every hand for my opinion and want to go on record as taking the opposite position. The long swing upward movement which started in August, 1921, is not yet over. am not concerned withs the minor movements of the market. don't know anything about them and no one else does. The market may have further declines before it goes higher. Statistics show, however, the market is due to go to higher levels in 1928 or 1924 before 1t starts on another long downward swing such as we had in 1920.
 'I admit that when one looks at surface conditions today, there are many things that tend to confirm the ' current bearish sentiment, The principal bear argument that is being used, is the European situation. It Is difficult for most people to see how conditions in the United States can improve much without ah in- crease>in our foreign trade. In the European situation and in the Tariff Act they see little encouragement in this direction. Other hearish aEQu- ments being put forward are: the high commodity price level that still exists, the failure of wagesNto come down, the increasing tendency of costs, the small margin of profit in many lines, the poor outlook for cer- tain industries, and political condi- tions. br
 "But did anybody ever make money in the stock market by follow ing surface conditional ] never heard that they did. Did surface condi- tions look rosy back in December. 1920 and during 1921 when the market was at it's lowest levels? They certainly did not. There were just as many calamity howlers then over the European situation and domes- tic developments as there are today. Tn the face of all these things, the market has had a rise of over 60eo in the past fifteen months 1t may be argued that the market had no license to go up to this extent and that because 1t has gone up SO much it is in dangerous position. The stock market, however, never could have had any such. rise as 1t did if underlying conditions had not been sound. This position on the market is based on underlying conditions and not on surface conditions. The same fundamental statistics that told me to be bullish on stocks in 1921 indicates that the long 'swing movement is not yet over.
 "Of course, I don't mean to say that all classes of stocks are neces- sarily going higher, or that the market will turn higher right away. There are certain groups that may have already seen their top. Judging from the statistical position of the industry of commodity which they I should not be surprised if these did not do so muck on the balance of the present movement, or if they even sagged. Because of the very uneven readjustment that we have been thru, the various groups of stocks are not all in the same position. This is no time to buy stocks with one's eyes shut. There are still possibilities for profit, however, for the man who will use discrimination"
 General business has improved 29o over last week. The index of the Babsonchart now stands at 3pc below normal-the highest point in two years.