The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1922-06-01
Babson on the Stock Market

Wellesley Hills, May 81, 1922.-In
view of the peculiar way that the stock
market has been acting the past few
days and the various reports that are
about regarding the great steel merg-
ers we have sought the opinion of
Roger w. BabsoD concerning the same
so far as the long swing goes" says
the statistician, everything looks
we'll both for the bond market and for
the stock market We are entering
into period of low money rates which
may extend over some years. If so.
the bond market will continue to climb
upward for a similar length OF time.
This does not mean that bonds will ad-
vance as much next year as they have
advanced this year, nor as much in
1924 as they will be in 1928. More
over reactions will occur now and
then. The general tendency, however,
should be for a strong bond market for
several years.
1.-THE stock market has not reached
its zenith Those who have bought
securities and have them in their boxes
should not worry about present market /
movements. or conflicting rumors. We |
have only started on a great broad |
movement in the security markets |
which will take both bonds and stocks !
to much higher prices. The United |
States of America has always been
great country; but today it is the cen
ter of the worlds production. distribu-
ton and financing. If it is two years
before we are back again in another
period of prosperity, it will be two
years before the stock market turns on
its great trip downward.
"The stock market. however, is like
the ocean. In addition to the great
tidal movements, there are squalls
storms and periods of calmness and of
The stock broker watches
/ certain barometer as does the marin
n at sea. This barometer strongly
suggests today that there may soon be ,
! storm in the stock market. 1t looks
ather cloudy and at points there is ,
PRESSURE which is not natural The ,
optimistic tone which has character
site of the market for many months ,
as temporarily gone. The rumor- +
longers and tipsters are again doing n
usiness. Insiders who have been ac- 3
for some months are known h
, have distributed their holdings.
hey are now waiting for q shake ;,
own and another chance to get :,
board before the next upward move -
rent. h
Regarding the reported steel merg- I,
r." continued Mr.. Babson. II will say A
nat there has been much talk about "
-, 50 much SO that it looks as If o
ertain parties were dstng it for win Il
ow dressing. The capitalization of p,
lie combiness'. eise,a .a..a,.,;;,.., b,
anna companies is aDOut SZUO.0OO, coo, II
he combined capitalization of Mid =;
ale with Republic. Youngstown. and q,
her companies proposed to merge is O.,
bout $3.50 100000 Thus if the entire 6,
installation goes through it would of
can a capitalization of about $780, III
$1,000 It is perposterous to claim Iai
at this is an equal revival of the 80
nited Steel corporation which has to- q,
y a clear investment of about one +,o
lion and a half dollars.
when the earnings are considered
similar condition will be found For
stance, for an average period of years
2 Bethlehem and Lackawanna show
oss earnings of about $780, 900 of
lille the Independents mentioned wo
owe show gross earnings of about If
O00OO0O Thus the total gross pre
'nings of the combined companies fax
uld not exceed $500. OOO, 600, including are
Bethlehem. Lackawanna, Midvale. pro
the rest For the same period Of gro