Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1937-01-01


lent state and thirty blue, or poor
states. Today this same map shows
twenty gold states and only two blue
states. During the past two years,
agricultural sections have been the
salesmanager' best bet. Although far
mers should continue to be good Gus
toners, the industrial centers, par
ticularly in the Northeast, Middle At
lantic, and Middle Western areas will
again come to the fore.
Remember, however, that the South
east, Southwest, Pacific and Noun
tain areas are our fastest growing
markets. The great opportunities for
future growth and expansion are
there! Keep this fact in mind when
you are making up your sales quotas
or when you are investing in stocks
and bonds.
Bonds At Ceiling.
Bond prices are the most amazing
factor in the security markets today
They are selling at the highest prices
in history. Since June, 1882, the yield
of the average bond has dropped from
7 1-2 per cent to 1-8 per cent. The
1887 outlook for bonds depends al
most entirely on the course of money
rates. My forecast is that the latter
will continue at current levels until
the government refunds all it's short
term debt into lOng-term issues at
about 2 IL per cent. After that rates
will depend more upon the commodity
prices and general business.
Hence, Il feel that present high bond
prices cannot continue indefinitely
Those buying bonds during the COM
ing twelve months must exercise ex-
traordinary care and judgment to
avoid getting burned! With higher
money rates a certainty sooner or
later, I feel that the general bond
market is today where the stock mar
ket was in 1928.
Bull Market Not Over.
The outlook for money rates is big
influence also on stock prices. Pitiful
returns on savings bank deposits,
bonds, mortgages, and high-grade pre-
ferreds will not coax money out of
good sound stocks. The tremendous
volume of money seeking investment
Ca billion dollars in December alone)
will prevent too big a stock sell-off.
1886 dividend increases and extras,
plus possibilities of still higher earn
ings over the next few years, give
well-chosen stocks added attraction
to those who want protection against
a rising cost of living.
In spite of the 80 per cent gain in
stock prices during the last twelve
months, I believe that many stocks
are not over-valued There may be pc
RODS of backing and filling, but the
basic trend is still upward. The bull
market which began on July 8, 1892
has not reached it's peak.
Good Selection Vital.
While the general pattern of the
stock market should be upward.
prices of individual groups will vary
greatly. Good selection will pay even
greater premiums this year than last.
Biggest gains percenttagewise will be
shown by the heavy industries, Ma
chinery, rail equipment building ma
terial electrical equipment, steels,
metals, and office supplies will be in
the vanguard.
Chemicals and oils will continue their
basic growth. Rails may be a feature
marketwise as the year progresses,
but airline issues offer better long
pull possibilities. Food, dairy, meat
packing, paper COAL textile, depart
ment store, and motor groups are all
due for moderate gains. Even the
chain stores and utilities should not
be overlooked They would probably
stand up best against quick sell-off
brought about by some major dis
aster such as the exploding of the
foreign bomb.
No War In 1887.
No one can deny that the overseas
situation is critical. Europe and Asia
today closely resemble the armed
camps Of 1924. A general war in
volving Fascism VS. Communism is
inevitable, but a general European
War will not come in 1887. There will
continue to be revolutions within ma
nations; but no formal conflict be-
tween nations.
European securities will remain I'M
attractive although world trade will
continue to increase slowly. The gain,
since 1888, now totals 80 per cent.
South America, France, Holland,
Switzerland, Belgian, Scandinavia,
Canada, and other British Common
wealths will be our best markets.
Japan and England will not be as
good as in recent years. Spain, Ger
many, and Italy will be our poorest.
Currency Outlook.
The most hopeful foreign develop
ment of 1896 was the Gold Bloc de-
valuation and three-cornered currency
agreement between France, England,
and ourselves. I do not expect, how
ever, that the dream of international
sterilization can become a reality dur
ing 1887. Improvement in business
conditions in Europe is the best
remedy for most of it's troubles.
Dictators, isms, war eagles and the