The Ypsilanti daily press. (Ypsilanti, Mich.) 1928-1962, 1943-05-21
BY Roger w. 6abson

NoN loIk Olty, Way CIV ucu
In New York my mind naturally
concentrates on Wall Street where
I make my headquarters while in
this city. Today especially desire
TO write on the purchase OF stocks
in view of the letters that are COM
ing in to me from amateur inyes-
tors. Many who we're cleaned out
in 1929 or 1886 are again itching
for another trial. Many more who
have never before bought any
stocks are now beginning to nibble.
Therefore, let me this week explain
three chief methods OF buying
stocks.
Short Turns Dangerous
Unfortunately. large percentage
OF the buying OF stocks is for
short term. which may be called
the first method. This applies 100
per cent to the trading by men
and women who hang around brok-
erage Offices. Far too many people
who do not visit brokerage Offices
also look at the stock market as
place to gamble rather than to in
vest As they are used to win
ming or losing quickly at horse
races and elsewhere they expect
profits or losses in the stock mar
ket. In many cases they get in
and out the same day; perhaps
majority get in and out within a
week or a month at the latest;
while nothing exceeding three
months would be looked upon as a
short term" purchase.
Naturally, these people do not
bother with a broad line OF stocks.
They select some one or two which
some one picks for them as win
ners". There really is not any
other way to play this dangerous,
but most fascinating game. I, who
have been in Wall Street q good
part of the past 40 years. can give
no worthwhile advice on short-term
buying except that such should
be for cash only. Avoid margin
accounts or bank borrowing. Re-
member that debt kills more men
than germs do. Recognize that so
per cent of the deaths among In
vestors comes from heart disease.
II I knew how to make money In
short-term stock market operations,
I would not be bothering to write
this column today!
Buying for the Long-pulI
The second method Is TO buy
stocks when they are comparative
ly cheap as at present, be prepar-
ed to keep them for from one 10
two years and then sell them out at
q good profit. This sounds very
simple and would work perfectly
II. when selling out these stocks,
the investor would be content to
leave his money idle in the bank for
year or two until stocks again
fall to low prices; then re-invest
and do II over again. This Is the
way most great fortunes have been
created In the stock market. Furth-
ermors, such investors perform n
real service for their profits. They
purchase stocks when everyone Is
frightened or uncertain and hence
they prevent a complete collapse;
then they later sell out when every
one becomes bullish and thus pre-
vent q reckless boom. For thus
helping to steady business condi-
tons. they are fully entitled to
their profits.
When buying for the long-pull,
one should diversity and probably
employ some long-established in
vestment advisory service for max
ing selections. Purchases should
be based upon careful study and
research. 1t is very sad to see
men invest quickly and carelessly
money which they have been years
accommodating by hard work and |
careful thrift. The long-pull meth
cd is legitimate and fairly fool-proof |
provided one sticks to it and does
not temporarily wander over the |
fence into pastures that apDsAr |
greener at the moment.
Permanent Investing
The third method is used by the |
man who buys each year very d. |
versified list Of securities with the |
intention OF never selling unless he |
makes purchases and sales by an
approved automatic formula. He
Is content to rely on a six per cent |
return knowing that money doubles
itself every IL years under such
conditions. He further has a re-
ligious faith that the world is con-
stantly getting better; and he is
never disturbed by bad news, low
prices or even panics. He gives
much thought to studying financial
reports in making his selections
but, after once making a purchase,
seldom looks at current stock mar
ket prices. He does not borrow
money; he buys very broad list