Henderson daily dispatch., 1946-09-14
Holdings In
South And
West Urged
Concern Remover
From Large Cities
Favored BY Babson
BY ROGER W. BABSON,
Copyright 1916. Publish .rs
Financial Bureau I'm.

flnanc.a! EurCaI. in:.
Bab%on Park, Mass. Sept. Ia.
we near match aouui %;tcA marx ;.
averages especially the Dow
Jones industrial, Hv>rd: cS wn.c, ,,.,r
pretty mach lhS standard. This av
craEc was Sol curly IN 1919: II i.n
10 II III l"3:, Sin"' th'u :; In: .,,aI
tally crIwic hari ,,y Il, 4 t.c;,I a.
lHH90 I" ~. II Gi;:h. III A.aY. 10 3,
Since then ;h"tr has J..r a I.,,n.
80 that tn aIcra"2 t,a.g :. a',rut
| 1871.
The Dow thcOry.
addition la waichin. ih"sr az.
Ira2cS, many in.cstUrS are believer:
IN The Dow I hcOry' So-calicd. THIS
| Is That change i'll the cyclical trend
| OF the market is Indicated wncu
/ th"rc Is confirmation in III" Inli"i:l.
''''' 'N'''"' WV .,r'~.N'~ .-r CIV i.,.i,,-
trial group and the railroad group
"i :",">. -.,'... 1t >...tr. -
sad TO have taken place whom botr
/ rrntipS break through an Garlic:
( 'alriy recent top or bottom of the
groups averages.
Ny own opinion is that in the
/ years ahead. between now AMI World
/ war III, mucn less attention will %
"IvCn TO these or any other aver
, ages. They will mean much less in
the future than in the past. As fG:'
The Dow Theory. | believe this has
fulfilled its usefulness and we will
hear much less about il from now
ON.
Sclcctive Markets Ahead.
+ Nothing in sight suggests there
. " i'll hn lnSS ifl1n - -,
vest during the next few years even
[ though more securities are being is
sued. Therefore. the buying demand
should exceed the desire To sell: in
. fact. many of those vino sell will
ultimately rcinvcSt in something
else. People may change their IN
NcStmcntS from stocks To other forms
Of securities. or may put the money
INTO houses, automobiles or other
things. The money. however, will
continue To exist IN some ones pock-
ct OF bank account.
My OWL guess is that we arc fac
ln@ Il very ScIcCtivC market. AS the
international situation becomes more
intense, wise investors Will sell Sc
curIilcS of corporations which have
. mnSl Of their assets in large United
| States cities. which viii probably
/ be destroyed if World War III oc-
ours. Then they will seek out com
panleS which have their assets well
/ distributed throughout the country
/ mostly away from large cities.
Watch Investment IounScllors.
/ Investment councillors and in
veStment trusts are already busy
seeking out such corporations and
. SNt'tfplNfDd .hHir F,-nI.
This probably explains why stocks
like Greyhound. General Amcricar
Tank Car. Corn Products. Diamond
Match, ST. Joe Lead, United Frui.
and certain oils and SulphurS have
gone up above the averages: while
stocks like tho railroads have lag
Gcd. Surely. the stocks of certain
chain store companies with their
merchandise distributed among hun
drCdS of small communities through
out the Central West or South should
be safer investments than the stuc,I
Of a large department Slur in SOM
big coastal city.
AS these investment counsellor,
get under way in their studies. thci'
clients will create Il buying power
which may well cause much higher
prices in So-callcd war proof"
stocks, and much lower prices ~
''war-vulnerablc" stocks How thi.,
Will affect the averages. no one can
now tell. These investment counsel
lors will also again give much con-
| Sidcration to the effects of initiation
| upon securities. If World War III
comes. il cannot help being followed
by wild and uncontrolled initiation.
Selecting Industries Using
Little Labor.
There also is one other conSidcra-
/ ton which is already making this q
sclcCtivc market. | refer TO labor de-
. mandS. Wise investors are SclcCtin.
stocks which employ Il comparative
~ small amount of labor. Hence. In
ideal investment is one which would
fulfill these three requirements:
/ Cd y company with most of lis
assets outside of large vulncrabI"
cities.
ca y company which would not
suffer irCm severe initiation.
/ CD y company which has Il com.
/ parativCly small labor cost.
/ TO me. the merchandising chains.
| operating i'll the Middle West. bcS;
/ fulfill these three conditions and IN
such |, personally. have considerable
/ money