Idaho County free press. [volume] (Grangeville, Idaho Territory) 1886-current, 1922-11-30
BABSON SAYS
Have Faith in America

Wellesley Hills, Mass, Nov. 81
Many traders have decided that the
stock market has turned definitely
downward and have sold their hold
ings. Others are hanging on and hop
ing The following statement made
today by Roger W. Babson would
indicate that fundamental conditions
substantiate the beliefs of those who
are still optimistic.
"There is feeling n many quar-
ters that the rise in the market is
over" says Mr.. Babson, "and that it
is headed for a long panic. am be-
ing asked on every hand for my opin-
ion and want to go on record as TAX
ing the opposite position. The long
swing upward movement which start
ed in August, 1921, is not yet
over. 1 am not concerned with the
minor movements of the market. I
don't know anything about them
and no one else does. The market
may have further declines before it
goes higher. Statistics show, how
ever, the market is due to go to high
err levels in 1923 or 1924 before it
starts on anothre long downward
swing such as we had in 1920.
REASONS FOR BEARIsHNEsS
"I admit that when one looks at
surface conditions today, there are
many things that tend to confirm the
current bearish sentiment. The prin-
cipal 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 an increase in
our foreign trade. In the European
situation and in the tariff act, they
see little encouragement in this direc-
ton. Other bearish arguments being
put forward are the high commodity
price level that still exists, the fail
ure of wages to come down, the in
creasing tendency of costs, the small
margin of profit in many lines, the
poor outlook for certain industries,
and political conditions.
'But did anybody ever make mon.
ey in the stock market by following
surface conditions7 I never heard
that they did. Did surface conditions
look rosy back in December, 1920 and
during 1921 when the market was at
its lowest levels9 They certainly did
not. There were just as many calami-
ty howlers then over the European sit
uation and domestic developments as
there are today. In the face of all
these things, the market has had
rise of over go percent in the last fif-
teen months. It may be argued that
the market had no license to go up to
this extent and that because it has
gone UP so much it is in dangerous
position. The stock market, however,
never could have had such rise as it
did if underlying conditions had not
been sound. This position of the
market is based on underlying condi-
lions and not on surface conditions.
The same fundamental statistics that
told me to be bullish on stocks in 1921
indicates that the long swing move
ment is not yet over.
SOME READY TO TURN
"Of course, don't mean to say
that all classes of stocks are neces-
sarily going higher, or that the mar
ket will turn higher right away. There
are certain groups that may have
already seen their top. Judging from
the statistical position 6f the indus
try or commodity which thew repre-
sent, should not be surprised if
these did not do so much on the bal
ance of the present movement, or if
they even Nsagged Because of the
very uneven readjustment that we
have been through, the various groups
of stocks are not all in the same po-
sition. This is no time to buy stocks
with ones eyes shut. There are still
possibilities for profit, however, for
the man who will use discrimina-
ton"