Evening star., 1949-02-08
What everybody ought to kno'o.
About This Stock And Bond Business

desire for gain in even the most con.
servative investor so that he naturally
wants to buy as low as he can and sell
as high as he can. He doesn't want to
lose an unnecessary dollar by an ILL.,
timed purchase or sale. That's why
we are always urging stockholders to
make close and continuous study of the
markets. for it is only through such
study that one can reduce the risks in
deciding wben to buy OF sell.
That point is especially important
with respect to the sale of stock. If you
own a stock which has risen to such a
high price that you wouldn't consider
buying it, it is only good sense that
you at least consider selling it.
Too many people make the mistake
of buying stocks, then putting them
away and forgetting about them. That's
bad business. If you want to invest
successfully. you've got to pay atten-
ton to your securities and be always
alert to new investment opportunities.
What may have been a good buy last
year or even last month may not be
good buy next year or next month.
Like everything else in this world,
securities are perishable."
HO,U Are Stocks Traded?
There are thousands of different
stocks and bonds - they are both called
seeurities-but the ones that are bought
and sold most frequently are those that
are traded on the floor of the New
York. Stock Exchange. The securities
of more than LOO major companies
are listed" on that Exchange, which
means that they have been accepted for
trading there.
All buying and selling on the Ex.
change is done between the hours of
10 AM. and 3 PM. New York time,
Monday through Friday, and 10 AN.
to noon on Saturdays except in the
summer.
What is the New York Stock Ex-
change9 Physically. it is a large area,
about two-thirds the size of football
field, in the Stock Exchange building
at the corner of Wall and Broad Streets
in New York City. Funotionally, it is
an organization consisting of 1875
members who have bought member.
ships Commonly called "seats") on
the Exchange.
Many of these members represent
brokerage firms whose primary busi-
ness is carrying out the orders of other
people, the public generally. for the
purchase or sale of securities. They are
paid commissions for executing these
orders for their customers. To provide
service for investors throughout the
country, these firms maintain many
branch Offices. Ali told, there are 6O9
member firms of the Stock Exchange
, that operateF95 branch Offices in $40
cities. T6iJH firm Alone has os 'oficss in
0e6 'cities. "7"N"@N ------.> ,.'' sat
What Is the Stock Exchange?
The Exchange is voluntary associa.
tion, as it has been Since it was estab..
lshed 15z yeartI Ago, and it functions
as an open auction market.
Before the Exchange agrees to list
the securities of any company, it must
be assured that the company is sub.
stantial concern, that its securities are
legally issued. that those securities are
widely owned, and that the company
agrees to issue regularly adequate pub
lie statements of its financial health.
Only member brokers can execute
orders to buy or sell listed securities on =.
the Exchange. If you give an order to
someone who is not part of New
York Stock Exchange brokers' organi-
zation, he turns that order over to a
member broker. In such circumstance,
you may be charged small commits
sion OF service fee over and above the
commission to the member broker.
What About Unlisted Stocks?
The New York Stock Exchange or
Big Board" is the biggest formal mar
ket for stocks and bonds, but there are
thousands of security issues which
aren't traded on that Exchange Many
are traded on the "a other exchanges,
such as the New York Curb Exchange,
the Chicago Stock Exchange, or the
Los Angeles Stock Exchange.
Still other stocks and bonds aren't
listed on any exchange. These securities
are called unlisted or off board securi.
ties: they are traded in what is popu-
larly called the -the.counter mar
ket Government and municipal bonds
are mainly traded in that market. So
are the stocks of most banks and in
surance companies, as well as the Sc
curities of many big corporations such
as Time, Inc, Texas Eastern Transmits
sion Corp, and the Weyerhaeuser Tim
Der Co. BY and large, however, unlisted
securities are those of small companies
that are apt to be better known locally
than nationally.
They are bought and sold not only
by many brokers who are members of
the New York Stock Exchange but also
by thousands of local security dealers.
Suppose a man in New York owns