Alma record. (Alma, Mich.) 1878-1928, 1922-11-30
HAVE FAITH
!, IN AME RIGA
THAT IS THE ADVICE THAT is
GIVEN AMERICAN BUSINESS
BY ROGER BABSON.

Many traders have decided that
the stock market has turned difinite-
ly downward and have sold their
holdings. Others are hanging on
and hoping. The following statement
made today by Roger w. Babson
would indicate that fundamental con-
ditions substantiate the beliefs of
those who are still optimistic.
There is feeling in many quart
ers that the rise in the market is
over" says Mr.. Babson, land that it
is headed for long panic. am
being asked on every hand for my
opinion and | want to go on record
as taking the opposite position. The
long swing upward movement which
started in August, 1921, is not yet
over. | am not concerned with the
minor movements of the market. |
don't know anything about them and
no one else does. The market may
have further declines before it goes
higher. Statistics show, however, the
market is due to go to higher levels
in 1923 or 1924 before IL starts on
another long downward swing such
as we had in 1920.
81 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. 1t 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 di-
rection. Other bearish arguments be-
ing put forward are: the high COM
modify price level that still exists,
the failure of wages to come down,
the increasing tendency Of costs, the
small margin of profit in many lines,
the poor outlook for certain indus
tries, and political conditions.
"But did anybody ever make mon
ey in The stock market by following
surface conditions? | never heard
that they did. Did surface conditions
look rosy back in December, 1920
and during 1921 when the market
was at its lowest levels? They GER
tainly did not. There were just as
mary calamity howlers then over the
European situation and domestic de-
velopments as there are today. In
the face of all these things, the mar
ket has had a rise Of over 60f, in the
past fifteen months. It may be ar
gued that the market had no license
TO go up to this extent and that be-
cause it has gone up so much it is
in dangerous position. The stock
market, however, never could have
had any such rise. as it did il under
lying conditions had not been sound.
This position on the market is based
on underlying conditions and not en-
surface conditions. The same fun
damental statistics that told me to
be bullish on stocks in 1921 indicates
that the long swing movement is not
yet over.
"Of course, | dent 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 of the
industry Of commodity which they
represent, should not be surprised
if these did not do so much on the
balance of the present. movement, or
rf
very uneven reimbursement that we
have been thru, the various groups
Of stocks are rot all in the same
position This is no time to buy
stocks with one's eyes shut. There
are still possibilities for profit, how
ever, for the man who will use dis
elimination"