The Holbrook news., 1922-07-07
Interesting Analysis Of Stocks By
 Roger w. BabsOn
Statstician Cassfes All Industrial Securities Under
 Three Heads

Statistican Casses All Industrial Securities Under
 Three Heads
 Manufacturing concerns are divided into three main groups says Mr. Babson according to the nature of what they produce. These groups are as follows:
 Group one includes those concerns making products that bought eventually by every person. but in small quantities. Collins simple illustration of this group For each of coffin will some day be bought This is known as the essential group
 Group two includes those concerns manufacturing products which only certain percentage of the people buy at all and which only few buy than once. There hosts of illustrations of this group Pianos automobiles yes, garden tools are in this group
 Group three includes those concerns who engaged in the manufacture of repeat merchandise The break fast food people illustration of such manufactur ers You get into the habit of using certain break fast food and you keep buying it. The soap people engaged in this repeat business. Such business is the most profitable both to the manufacturer and the n- vestor Industrial securities which are founded on the third group are generally recognized the most at- tractive.
 One might think that the essential groupis the best group in which to invest ones money, but study of the situation convinces that this is not Altho some is day to buy coffin for each one of us yet the coffin industry IS very easy industry to get overstocked. Surely the sale of coins be n creased very little by advertising salesmanship any other known to the most clever sales managers
 Take salt, continued Mir. Babson salt is the prime essential of food yet the ceverest advertising in the world could not increase the natural consumption of salt Atho off hand you might think it much safer to loan money to the salt industry than to the candy n dustrv, yet study of failure records show that the candy industry is safer than the salt industry Atho musical instruments not essential. the demand for them can be increased to almost unlimited extent Hence industries producing products of the second group are preferable to those of the first group
 The third proun icjudnC thnSe industries hased upon repeating purchases, is the most profitable of all The securities of the Gillette Razor" very good illustration The Gillette Company afford to sell at loss because of the blades they sell later
 Another illustration is the Eastman Kodak Company Eastman we'll afford to sell kodak at cost because of the great source of income in films and supplies Another illustration is the phonograph piano would go in group two, photograph would also go in group two but phonograph records would go in group three The Victor Company has made greater profits on the records than the photographs This fact very interesting when looking the stock market because you will that the most profitable stocks are those of companies like Gillette, Kodak, and Victor all of which come under this third group.
 Investors should not be frightened at the word "lndustrals'. Every class of securities has it's strong features and it's weak features No class of investments has monoply of all the good points, The wise invest or will diversity taking part governments and munich pals, part railroads, part ndustrals part public util CieS part othef cidSSeS' when, however, seeking dustra securities select those industries that are based upon repeat orders and where the more or unlimited.
 Some people bank on monopoly. They will buy only into industries which have monopies Temporarily they may win but the fact of the company's having monopoly usually tends to make the company inefficient and often ultimately brings disaster The investor who depends on monopoly is playing dangerous game. It is far better to buy into industry which has great undeveoped field and which relies on repeat orders
 certainly advise investors against putting their money into companies which manufacture products which do people harm Statistics show that the great est losses to investors in industrals have come thru companies such as brewery companies, for instance They have been operated purely for profit without re- gard to the welfare of the people, The primary feature to be sought when considering investment concluded Mr. Babson is to be certain that your money is to make people healthier, happier, and prosperous. When you invest your money if you will try to select such