The Washington times., 1931-02-24

To state that the current up
turn has been due to a belated
recognition by the country at
large that genuine recovery Of
Importance is just around the
corner is probably stretching the
matter quite a bit. For certainly
no dyed-in-the-wool investor ha;
been rushing pell-mell into the
market for the yield possibilities
of such non-dividend payers az
Worthington Pump, American ane
Foreign Power, United Aircraft
and others which have been boil
ing around of late.
The so-called outside public
which has been purported to
have been a heavy buyer Of
stocks is not the same as the
public of 1929. The current de
mand is largei of the "hit-and
miss" type, or what brokerage
houses are pleased to call short
term traders, and when the run
to get out starts, as it inevitably
must. the professionals will fine
that the public will not be hold
ing the bag in the manner eX'
pected.
Business Laggard
It is pointed out in conservative
quarters that the general run OF
business indices still show that
business is running at the sloWest
pace since 1921. 1t is no secret
that the most stubborn short in
terest is for the account of indl'
vidualS who are close observers OF
business conditions.
Their first hand knowledge OF
specific business situations has
caused them to hold tenaciously to
the short side. Thus the short in
terest actually keeps growing from
day to day, strengthening the
technical position and allowing
the stock market to virtually call
itself up by the boot straps.
In the opinion of one OF the
leading wire houses which was
formerly a bull on the market,
the elements in this situation as
mentioned above are not alto
gether sound, and even at the
risk of being wrong on short
swing movements, clients are ad'
vised to withhold any commit
ments at this time. The market
will face a large amount Of red
ink earnings statements for the
first quarter, and it is open to
question whether the list will
anticipate such unfavorable news
or wait for the actual appearance
of such reports before acting &C,
cordingly.
Revival in Tire Sales
Some reason for the recent
popularity of the tire group is
seen in the report of the Depart
ment Of Commerce showing a re-
vival in tire sales in the final
half of last year. Whereas the
third quarter of 1929 accounted
for 30.8 per cent of the total
years sales, the third quarter OF
last year accounted for 3l.5 per
cent. Fourth quarter 1880 sales
made up 1875 per cent Of total
sales against 1T per cent in the
final quarter of 1929.
A bullish analysis of Cater
pillar Tractor has been prepared
by a prominent brokerage house,
in which it is cited that this
company has built up an un
usually strong working capital
position, and has an unusual
product, viewed from the stand
point of the probable economic
trend.
Should the company do as
we'll in the balance of this year
as it promises to do in the cur
rent quarter, earnings are ex
pected to average between S6 and
81 per share, as compared with
dividend requirements of 81, in
cluding extras.
Among the stocks which are
listed by bullish quarters as in.
dicative of being in an upward
trend are American Telephone,
Borden Drug, Inc, Electric Power
and Light, Goodyear, McKees-
port Tin, National Dairy Pro
ducts, Radio, Pacific Lighting,
Shattuck, Woolworth, Diamond
Match, Best, Gold Dust, Johns
ManVille and LOeW'S.