Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-10-12
Common Stocks
Investment List
Changes Rapidly
Financier Declares Securi-
ties Need Much Watching
Every Year-Cites Changes
,ecial Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, October 1.-THE aver
age life1o high-grade common stock
investment is between and 10 years.
There must be a gradual flow of stocks
through the strong box as economic
conditions change, If deterioration Is to
be forestalled. These are the observa-
tons of Edward B. Twombley, chair
man of Insuranshares Corporation Of
New York.
"Out of 20 common stocks which
were high-grade investment ISSUES in
the total, had so deteriorated by 1925
that they could not meet the original
requirements by which they were Sc
lected," Mr.. Twombley states, adding:
Selections were made on the basis Of
earnings and dividend records, rate of
growth, investment standing, market
activity and future prospects.
Sweeping Changes Noted.
I'm tracing the life histories of COM
mon stock investments selected at va
rious times between 1900 and 1925 one
striking fact stood out. The deteriora-
ton of investment portfolios, even
though selected under the most rigid
requirements, was progressive. The
older portfolios suffered far more than
the newer ones and the amount OF de-
terioration showed an impressive direct
proportion to the age of the portfolio.
Even in the group OF 20 stocks selected
as Of 1925, there were 4 issues which
would most certainly not be selected at
the present time.
Changing economic conditions were
almost entirely responsible for the de-
probation of the originally high-grade
investment, which the investigation re-
vealed. These changes could not be
originally foreseen, but could be recog-
nized when they appeared. A prompt
substitution Of investments would have
produced eventual gains instead of
losses.
Factors Causing Declines.
Some Of the changes which de-
throned prime investments may readily
be recalled The opening of the Pan
anna Canal injured several Western
railroads; postwar commissions in lard
and cotton crippled American cotton
broke the dividend record of American
Sugar. The automobile and the de-
Ginning potency Of the nickel robbed
Manhattan Elevated and many other
fractions of their prosperity. Chang
ing styles, invention of substitutes and
a frenzied cattle market contributed to
the decline of Central Leather. The
migration of the New England cotton
industry to gain the cheap labor and
power of the South ruined mills with
almost a century of stable earnings be-
hind them. The radio and high-priced
housing ruined the piano business A
change of public taste from cigars to
cigarettes seriously affected several to-
bacco stocks.
Financial Curiosity.
1.-THE first portfolio chosen in our in
vestigation as of 1900 would be f1nan-
cial curiosity now. 1t contained no oils,
no chemicals, no electric equipments,
no chain stores and no motors. Ten
railroad issues comprised one-half of
the stocks selected.
1.-THE portfolio chosen as of 1925 con-
tanned representatives of all of the in
dustries named above, but reflects
sharply the effects of Government reg
ulation on railroad stocks during the
intervening years, for it includes but
three of these issues"