Alma record. (Alma, Mich.) 1878-1928, 1922-12-21
BONDS A BARGAIN
Says R. BABsON
HE BELIEVES BONDS HAVE NOT
YET REACHED TOP AND
ARE A GOOD BUY.

There has been much discussion Of
late as to whether bonds have reached
the top. Roger w. Babson evidently
thinks not. In discussing the situa-
ton today, he calls attention to the
long swing bond cycle and appears 10
have a hundred and fifty years Of fl
nancial history on his side.
"The cheapest thing | know of to-
day" says Mr.. Bsbson, sis the pro-
mise Of $50 for the next few years,
secured by 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 hoping for those old
prices to come back. And nothing is
mora likely than that they will come
back sometime during the next TWEEN
~ years.
Most of us, judging from our own
experience, think of 1920 commodity
prices as the "high-for- all' 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 compiled, there is data
enough to suggest 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
peal. in 1920. 1t is exactly in accord
with past experience that there should
be a short upward reaction, at this
time, from the first sharp decline of
las; year. Pa it would be against
our economic history if prices did not
show a long, slow trend towards a
level that more nearly equalizes the
buying power Of agriculture with
that of the manufacturing industry.
The fact that tAe mass Of people ex
pect lower prices, of course, fer the
other fellows goods-helps to bring
them about. Psychology as a price
factor may be more potent, under GER
tain 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 backwards.
Then everyone who holds contrast
agreeing TO pay him a stipulated
amount Of money every year, ike
rent, or the interest on a 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 long-term
bonds lost value because prices were
rising sharply.
81 have endeavored above" contin-
ued Mr. Babson, 'to state briefly and
UNDERSTANDABLE the influences tend
ing to cause what we know as the
Major Bond Cycle-a fundamental
movement no investor can afford TO
ignore.
This typical year-end market
provides 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 he 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
coed bonds Off the bargain counter"
e. s. -
Increasing stock market activity
and Xmas buying have worked to-
gether to bring business up to a nor
NAL level. The index Of the Babson
chart shows general activity exactly
Il. the normal line. This is the high
est point since September, 1919
1t is an encouraging sign according
to Mr. Babson who expects activity