Milford chronicle., 1962-12-28
BABS0N'S BUSINESS AND FINANCIAL FORECAST FOR
1863 BUSINESS AND EMPLOYMENT

The business situation will vary
with different industries, and hence
with different cities. Some defense
centers will boom; steel cities will
still find the going tough but
/ better than year ago. Consider
ing the high level of the past ten
years it will not be surprising for
1868 to show a moderate decline
in business. If so it should come
in the second or third quarter,
J with recovery in the fourth quar-
| ter, followed by a good 1864.
Disposable personal income will
remain high. With increased saw
ings deposits and little change in
the cost of living, the public should
fcontinue to spend freely, especial
/ ly if merchants maintain their adj
vertising outlays.
| Inventories will remain about
the same during 1868. But gov
erment spending will increase
over SO billion largely on defense
and 81 billion on new roads.
| Whether manufacturers will h e
their expenditures for new mach
! inery in 1868 in view of the de-
probation tex credit, l would not
now forecast.
All this means that business and
employment for your city in 1868
will depend largely upon the at
titude of it's leading businessmen
| If they will be optimistic and spend
more on new plants, advertising,
and salesmanship, we should have
nothing to fear.
Stocks and Bonds
My father used to tell me, ''It
is okay, Roger, for you to make
forecasts but never put dates
on them!" forecast that the Dow
Jones Industrial Average will reg
lister lower sometime during 1868
and stocks will show an average
yield of about 49o. Either dividends
must be increased or prices o t
stocks must go lower. Both cam
not continue forever so poorly
| adjusted.
The above comment refers prim-
arily to industrial stocks. I fore
cast that both the gross and net
earnings of utility stocks will adj
vance during 1868 and for m G
years thereafter. The utility cum
ulative preferreds have reached a
point whereby they will closely
follow interest rates as determin-
ed by the Federal Reserve Banks
The utility common stocks should
slowly rise in price provided they
are not unjustly limited by leg
| islation or by state and federal
regulatory commissions.
AS for the railroad stocks, ]
generally feel bearish. A war with
Cuba or world nuclear wan
breaking out anywhere could cause
the stocks of all our transcontin-
entail railroads to go up sharply in
price, but down they would come
again. We are today in an cleo
tronic age and no longer in a rail-
road age Those who desire to in
vest in common stocks should stick
| to the oils, chemicals, and elec-
tronics. Even then keep in mind
Newton's Law of Action and Re
action which will always determine
the time to buy and sell common
stocks.
Regarding bonds / am not pes
simistic for 1868. Certainly, tn 9
non-taxable bonds will sell high
er during 1863 Also, a good short
term corporation and government
bonds will be safest to hold. Long
term corporation and government
bonds may sell for less sometime
during 1868 Long term bond prices
vary with interest rates and b G
probability of initiation.
Building and Real Estate
There may be some decline in
residential building in 1868;
shopping centers in many subur-
ban developments may remain at
standstill for while. However,
so much money is piling up in
savings banks which must be in
vested, it seems that by 1864 many
more new homes will be built. In
this connection, when purchasing a
house or business property, be
sure to study the land, which
usually improves in price while
the value of the building declines.
When constructing new fr m e
houses. build either single homes
or houses with only two apart
ments on the ground floor. There
will be considerable new building
of brick apartment houses, which
should keep filled so long as they
are well maintained. Old apart
ments and old houses will decline
in price during 1868.
The less attractive outlook or
| home building generally does not
| apply to government or public
buildings, or to all commercial
buildings. The real estate develop
ers, however, must spend more on
advertising in 1863 to meet t h e
growing competition.
Retail Trade
Naturally, there will be a. sea-
sonal letdown in retail trade after
Christmas and the markdowns
which follow January l. That will
be the time to look for bargains.
PULPIT BEFORE PUMPER