Common Stock - Be Smart

Too many people are willing to buy a certain stock without regard to its position in the industry which it represents and, more often than not, without making any sort of comparison with others in the field. Such an analysis as here indicated cannot be made in a few minutes.

Some industries may be behind the general market action, but this does not necessarily indicate that they are reasonably priced; much depends upon the value which the current market attaches to possible future earnings; the catch here is to find some which have been ignored by the current market, and a certain amount of statistical digging will often make this apparent.

A general knowledge of all segments of the economy is part of the appraisal considered above, but coupled with this must go a certain sense of timing, since what to buy must always be accompanied by when to buy. Should present indications point toward a maintenance of present business conditions for some considerable period of time in the future, then careful investigation is required to make a satisfactory choice. In this connection the broker may be able to offer considerable assistance.

In picking out an appropriate industry for investment considerations, we must keep in mind the fact that each industry differs from the rest in certain particulars and that each involves certain factors which have a direct bearing upon the soundness of their securities. The features noted in the paragraphs which follow will make this clear.