Connecticut western news., 1922-12-14
BONDS AT A BARGAIN .
 SAYS NOTED STATISTICTAN
Babson Sees Long Swing Toward Lower Commodity
 Prices
HISTORY REPEATING
Year-End Market Provides e Wonderful Opportunity for
 Investment


 Wonderful Opportunity for
 Investment @@
 There has been much discussion of late as to whether bonds have reach ed the top. Roger W. Babson\ levi dently thinks not. In discussing the situation today, he calls attention to the long swing bond cycle and ap- pears to have a hundred and fifty years of financial history on his side.
 "The cheapest thing I know of today'', says MT. Babson, ''is the promise of $50 a year for the next twenty years, secured by a mortgage bond. Just now this $50 will buy, perhaps, a suit of clothes. In 1920, it would have paid only for the coat and one armhole of the vest. We all can remember when it would have bought two suits, as good as the one it will buy now. Everybody is hop ing for those old prices to come back. And nothing is more likely than that they will come back sometime within the next twenty years.
 Most of us, judging from our own experience, think of 1920 com modity prices as the 'high-for-aip time. What we do not realize is that prices have been as high three times before, at intervals of about fifty years and that between the peaks, each time, they have touched levels as low as in 1896. While earlier statistics have not been com piled, there is data enough to suR- gest that this same swing from high prices to low prices and back again, over long periods, might be traced far back into history.
 "Prices turned at the same 'old peak in 1920. It is exactly in ac- cord with past experience that there should be short upward reaction, at this time/ from the first sharp de- cline of last year. But, it would be against our economic history if prices did not show long, slow trend towards a level that more nearly equalizes the buying power of agriculture with that of the manufacturing industry. The fact that the mass of people expect lower prices-of course, for the other fell lows goods--helps to bring them about, Psychology as price factor may be more potent, under certain conditions, than the. supply of gold.
 "As prices, of goods go down, the value of money goes up. That's only saying the same thing back wards. Then everyone who holds a contract agreeing to pay him a sti- pulated amount of money every year, like rent, or the interest on bond, has something that is worth more, year after year. This holds now just as the opposite was true from 1914 to 1920. Then these same long7ter bonds lost value because prices were rising sharply.
 "I< have endeavored above", con tinued MT. Babson, "to state briefly and understandably the infiuenses tending to cause what we know as the Major Bond Cycle--a fundamental movement which no investor can afford to ignore. .E
 "This typical year-end market pro- vides a wonderful opportunity for investors who have funds and faith in the United States. The lesson of the last few weeks again is, that no appraisal is accurate which neglects fundamentals. The same people who recognized the beginning of bear market last month are certain that things are going up today. But the fundamental situation has remained the same as three months ago. When everybody wishes to sell is the time that informed buyers carefully pick good bonds off the bargain counter-"
 Increasing stock market activity and Christmas buying have worked together to bring business up to normal level. The index of the Babsonchart shows general activity exactly at the normal line. This is the highest point since September, 1920. a t
 It is an encouraging sign accord ing to MT. Babson who expects ac- tivity to be slightly above normal fer the next four to six weeks. Things will then let down bit according to the Statistician and the foundation of fundamental conditions will be completed for the next period of prosperity.