New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-07-02

faculty that characterizes the consp;c-
uousiy and consistently successful
speculator. Perhaps the best known
trader IN the stock marNct at the pres
ent time has recognized the distinctive
fields of speculation and investment by
safeguarding himself against the haz-
ards Of the speculative market place
oy. purchasing an annuity-an ultra
safe form of investment-to assure
himself steady flow Of income in his
later years, irrespective of the vicis-
STUDIES of stock quotations. Another
master trader, who is no longer active
in the market, has placed the larger
share of his fortune in bonds and, de-
spite his popular reputation for un-
failing judgment, informs us that fire.
quently he made mistakes in the mar
ket that were extremely costly
Speculation appeals to those who are
ready and willing to take the risks of
business in the hope Of extra ordinary
profits. The other aspect of a specu-
lation is possibility of loss. An in
vestment involves safety of principal
and regularity of fixed income.
If you wanted an investment your
broker rendered you splendid service
in recommending General Electric
bonds, whicl, are in the highest grade
Of industrials. You do not say when
you bought the bonds, but return
of per cent on bonds bought in 1912
would amount in nine years to $5,4OO.
which you obtained without contribut-
ing the mental anguish and worry as
sociated with speculations in the pro-
motion stage. S. S. Kresge Company
stock. it is true, yielded handsome re-
turns to shareholders. Many specula-
tions are profitable to those with the
sary to see the proposition through
If you had bought the Kresge Com
pany stock in 1912 your original funds
would have been returned in dividends
by this time. Disregardng the change
in par value from 500 to $40 in 1916,
and from $40 to $500 share the fol-
lowing year. you will find that divi-
dends on 100 shares, costing $4,000,
would have amounted to s400 in 1913,
5000 in 1914, $500 in 1915, $500 in 1916,
assuming that the holder took advan-
tage of his option to purchase 20 per
cent Of his stock holdings at par, which
together with the 80 per cent stock
dividend would have doubled his stock
$500 in 1917, $1,000 in 1918, $1,000 in
1919, 1920 and 1921, making total Of
$1,000 in dividends received in nine
years from an investment of $4,000.
The stock dividend of 81 per cent last
year increased the number Of shares
from 200 to 308, and dividends this
year at per cent will yield $2,156, and
The market price of the stock has in
creased from the original purchase
price Of $500 to approximately SAL
272. very alluring enhancement.
roll
Inc, whose Glass A shares were re-
Gently listed on the New York Stock
Exchange, is distinctly less impress
sive. This company was incorporated
in Virginia in 1919 and its capitaliza
ton consists of 100000 shares of no
par value Glass A common and $4,000
shares of Glass common. The latter
class was transferred parent com
pany. the PigglyWiggly Corporation,
for territorial franchises in the United
States, and the parent company also
purchased some Of the Glass A shares,
SO that it now controls about one-third
of the total capitalization. The Class
A stock sold as low as $40 share
last year, when the cmpany was forced
to absorb heavy inventory deprecia
ton. An initial dividend of 81 share
was paid in August, 1920, but up to
y OHc l, 1JGA, WITCH NNAC *"
sumed at the rate of 81 annually no
additional distribution was made. On
June /, 1922, dividends accumulated and
unpaid on Glass A common stock
81 q share. On Glass B
stock no dividends had been paid up
to June l, 1922. AS result, of recent
financing and increased sales promo
ton the shares participating in the
general rise of security values have
risen to around s43 to $45 a share.
In spite of the improved outlook, how
ever, this stock must be regarded as
highly speculative.
These facts are cited merely to clear
up the situation in your mind. How
ever, let US assume, for the purpose
of argument, that both Of the specu-
lations which you had considered had
turned out extraordinarily profitable.
Would that give you sufficient reason
for purchasing substantial blocks of
promotion stocks at the present time?
In order to get the true picture you
must take into consideration the in
finite number of promotion shares
whichare offered to the public by stock
amid the fanfare of glowing
trumpets and rosy predictions, which
soon wither and fade, and are remem-