Idaho County free press. [volume] (Grangeville, Idaho Territory) 1886-current, 1922-05-11
BABSON SAYS
Buy Mine Stocks
Carefully

Wellesley Hills, Mass, May 6. 1922
When asked for an opinion on GER
tain mining stocks, Roger w. BabsOn,
advisor to more than 10000 investors,
today pointed out three basic princi-
pies that should be borne clearly in
mind by any one contemplating the
purchase of this group of stocks.
"'The industries engaged in produc-
ton of raw Materials observed Mr..
Babson, "may be diveded roughly into
three groups, mineral, vegetable and
animal.
"The first group, mineral, Includes
all the various mining projects. Fun
damentally it is the weakest group
because the investors dividends from
mining stocks come largely from his
principal. A mining company is very
much like a barrel of apples, when
you take one apple from the barrel
there is one less apple in the barrel.
Every dividend one gets from the
stock of mining company represents
the return of a portion of the princi-
pal invested. This means that if you
have stock, for instance, in a GER
tain mine that has life of 80 l-3
wears, and you receive dividend OF
6 percent on that stock, you are really
receiving a dividend of only 3 pecent
on your investment, the other 3 per
cent is the return of your principal
MUST CREDIT PRINCIPAL
"You see mining stock, to compare
favorably with any other kind of
stock, should pay at least percent or
percent more to cover this return
of principal. The only proper way for
the investor TO keep his books is to
divide the dividends he receives on
mining stocks into two portions. One
portion is to be credited to principal,
and the other to interest.
"There, however, is another reason
whv mining stocks are different from
other stocks. When buying a mining
stock one bets on what is in the ground
Yet one never knows what there is IN
the ground until after he has spent
his money to get it out. An admission
fee must be paid before one knows
what there is inside to see. As % per
cent of the mining companies never
get ore on paying basis and per
cent are very profitable, this is gam
bling to the nth degree.
sHUN PoKER-BUY STOCKS
"Mining securities for these reasons
represent the most speculative class
of stocks, although most people do
not appreciate this fact. A Methodist
who does not believe in playing cards,
NAV buy mining stocks, and it is CON
sidered perfectly all right. He would,
however, get far better mental train
lug if he played poker and in many
instances his percentage Of loss would
be less.
"I do not mean to infer" continued
Mr.. Babson, "that mining stocks as
class should not be purchased, only
that they should not be bought on a
hit or miss basis. The copper indus
trv. for instance, is absolutely legiti-
mate. as farming, building, or operat-
ing a water power, it is here TO stay.
When you buy an interest in the cop
per industry, you are getting into a
legitimate business. in a legitimate
wav. The distinction between buying
into the industry instead of buying
stock in single company must how
ever be kept clearly in mind.
10 BIG PRODUCERS
NsThere are several thousand diff
ferent copper mining stocks on the
market TODAY and vet eighteen of these
companies produce so percent of the
copper. By buying the stocks of these
eighteen companies, you can have an
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