The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1928-07-10
STOCK VALUES
TAKE BIG
DROP
By RICHARD HATTON


Possibly, more. people are inter
ested in stocks as investment OF
speculation today than ever be
fore. The American public is an
Investing public and the stock
market has recently indicated that
the percentage of investors In
listed securities has increased
rapidly in recent months.
More than two billion. dollars de-
cline was registered in the market
value of 100 stocks during June,
according 10 the monthly tabula-
ton Of Frazier Jelke & Co.
Total value Of these issues June
50 was So, sss, 7s1. 900 compared
with $26 1885, 800 900 May 81. This
ii net decrease OF s.9 per cent
for the month.
The IL motors led the decline
with :. net loss Of $1,259, 915,OO0 in
market value or q per cent from
the high mark of $4,6S4,O40.000
reached at the end of May.
SIX utilities which had made
STEADY gains until the June decline,
fell off TT per cent. having drop.
ned from g. market value or $4,SUl, :
1000 May 81. to $A529 24'OOo
June so. 80
Fifteen industrials decreased 1913
per cent. four steels fell 81 per
cent. and oils dropped only "a per
cent during the month.
Slight Gain In Copper
4 slight gain was noted in cop
per shares, while additional losses
were made in rails, equipments, rub
Der and food products groups.
Now is a good time to go over
mes list OF stocks to determine
which should be held and which
should be sold. OF course, each
stock must be judged on its in.
iiyiduaI merits The United Busi-
ness Service Of Boston points out in
one OF its recent weekly reports
certain guiding principles that will
be found helpful, the most inn
portant OF which, they state, is the
rate OF earnings to the selling price
sf the stock.
For the highest class OF invest.
ment stocks, IL the stock is selling
at not more than IA times assured
earnings, the investor is justified in
holding. But for stocks in the oil
steel. motors and industrial groups
generally, we would say that tf the
stock is selling at more than 10
times the annual earnings, such
stock Is over-valned.
This conclusion should be modi-
fled. however, by the earnings trend
of individual companies. If the
earnings show a declining trend, the
stock may be over-valued even
though selling for less than 10
times its earnings. Ii, on the other
hand, the earnings have shown a
rising trend over the past two or
three years and the industry is
coming rather than going, a
higher selling price Is justified.
This Is especially true IL the nature
Of the business is one that promises
increasing earnings in spite of any
possible decline in general business.
Individual reasons must indeed be
determinative in every case, but we
strongly urge that any stock that
does not measure up TO the above
standards should be called in ques-
ton and its position and prospects
closely scrutinized before decision is
made to hold it. We can no longer
depend on general upswing to
carry good and bad alike to higher
levels.
Fleming HonOred
Announcement has been made OF
the election of President Robert ".
Fleming Of the Riggs National Bank
to the board Of directors Of Investors
of Washington, an investment trust
OF the management type which was
organized here same months ago.
Mr.. Fleming is also president of the
District OF Columbia Bankers As
sociation. Other officers and direc-
tors Of Investors Of Washington in
cIude: Newcombe Baker, direcaor,
secretary Investors Equity Corpora
ton. New York; Frederic A. Delano,
chairman of the board, former vice
governor Federal Reserve Board;
John r. Dryden, president and di-
rector, capitalist; j. S. Flannery,
counsel, McKenney & Flannery: r..
v. Fleming. director, president Riggs
National Bank; Edward P. Herman.
secretary. Childs, Jeffries & Co.,
Boston; Coleman Jennings, director,
Riggs National; Charles Carroll Nor
gan. vice president, treasurer and
director, manager bond department
Of q. Mp. Murphy & Co.; Grayson
Mp. Murphy, director, senior part
ner G. Mp. Murphy & Co.; B. w.
Thoron, auditor, G. Mp. Murphy &
Co; Winslow B. Van Devanter, vice
president and director, manager
washington office Guaranty Co, and
William H. White, jr., attorney
CuthelI, White. Hotchkiss & Mills
Thomas w, Brahany, OF Crane
Paris & Co., leaves Washington to-
day on vacation which will in
cluds an automobile and boat tour
The new home OF the Federal Sc.
curity and Mortgage CO., at 1b22 n
st. n. w. will be opened today Tor
public inspection from 10 a. m. until